Donald Trump insists his global trade war will be 'worth the pain' to create a 'golden age of America' as backlash grows from countries targeted by his tariffs
President Donald Trump has insisted that the economic ‘pain’ from his global trade war is ‘worth the price’ to create a ‘golden age of America’.
Trump signed an executive order Saturday to impose stiff 25 per cent tariffs on imports from Mexico and Canada – despite the neighbors sharing a free trade pact – and hit China with a 10 per cent tariff in addition to already enacted levies.
The president had vowed since before his inauguration to take such action, claiming the countries were not doing enough to halt illegal immigration and the trafficking of the deadly opioid fentanyl into the US.
The trade penalties that Trump signed Saturday at his Florida resort caused a mix of panic, anger and uncertainty, and threatened to rupture a decades-old partnership on trade in North America while further straining relations with China.
But by following through on a campaign pledge, Trump may have simultaneously broken his promise to voters in last year’s election that his administration could quickly reduce inflation.
‘Will there be some pain? Yes, maybe (and maybe not!)’ Trump wrote Sunday morning in all-caps on his Truth Social media platform, defending his executive order.
‘But we will Make America Great Again, and it will all be worth the price that must be paid.’
His administration has not said how high that price could be or what improvements would need to be seen in stopping illegal immigration and the smuggling of fentanyl to merit the removal of the tariffs that Trump imposed under the legal justification of an economic emergency. The tariffs are set to launch Tuesday.
President Donald Trump has insisted that the economic ‘pain’ from his global trade war is ‘worth the price’ to create a ‘golden age of America’
Trump signed an executive order Saturday to impose stiff 25 per cent tariffs on imports from Mexico and Canada. The move threatens to derail the $1.6 trillion trade between the US and its neighboring countries. Pictured: Avocado producers in western Mexico amid plans to open new export markets in Asia and South America to cope with an eventual drop in sales to the US
Apparently seeking to limit a spike in fuel and electricity prices, Trump put the levy on energy imports from Canada at only 10 per cent. Pictured: Electric poles and wires stretching along Edmonton’s Anthony Henday Drive, in Edmonton, Alberta, Canada, on February 1, 2025
In his Truth Social post, Trump took particular aim at Canada, which responded with retaliatory measures.
Trump has placed a 25 per cent tariff on Canadian goods, with a 10 per cent tax on oil, natural gas and electricity. Canada is imposing 25 per cent tariffs on more than $155billion on US products, including alcohol and fruit.
Trump railed against Canada’s trade surplus with the US: ‘We don’t need anything they have. We have unlimited Energy, should make our own Cars, and have more Lumber than we can ever use.’
Despite Trump’s claim that the US does not need Canada, one-quarter of the oil that the America consumes per day is from its ally to the north.
The president and his advisors had previously resisted acknowledging that tariffs could raise US consumer prices, after frustration over rising costs was seen as a major factor in his November election victory over Democrat Kamala Harris.
In a separate social media post, Trump called again for America’s northern neighbor to become a US state, heightening tensions further with one of his country’s closest allies.
While claiming the United States pays ‘hundreds of billions of dollars to SUBSIDIZE Canada,’ Trump added, ‘Without this massive subsidy, Canada ceases to exist as a viable Country.’
‘Therefore, Canada should become our Cherished 51st State,’ he wrote on Truth Social, claiming the move would bring ‘much lower taxes, and far better military protection for the people of Canada – AND NO TARIFFS!‘
The US Census Bureau listed the country’s 2024 trade deficit in goods with Canada as $55billion.
In his Truth Social post defending the tariffs, Trump took particular aim at Canada, which responded with retaliatory measures
In a separate social media post, Trump called again for America’s northern neighbor to become a US state, heightening tensions further with one of his country’s closest allies
In imposing the tariffs, Trump invoked the International Emergency Economic Powers Act. The move provoked immediate vows of retaliation from all three countries, while analysts warned that the ensuing trade war would likely slow US growth and raise consumer prices over the short term.
Canadian Prime Minister Justin Trudeau vowed Saturday that his country would hit back with 25 per cent levies of its own on select American goods, with a first round on Tuesday followed by a second one in three weeks.
Leaders of several Canadian provinces have already announced retaliatory actions as well, such as the immediate halt of US liquor purchases.
Mexican President Claudia Sheinbaum meanwhile said she had directed her economy minister to ‘implement Plan B,’ which includes yet-unspecified ‘tariff and non-tariff measures.’
On Friday, the right-leaning editorial board of the Wall Street Journal newspaper blasted Trump’s tariffs in a piece titled ‘The Dumbest Trade War in History,’ saying, ‘American consumers will feel the bite of higher costs for some goods.’
‘The “Tariff Lobby,” headed by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA,’ Trump wrote Sunday morning on Truth Social.
He has long decried US trade deficits as a sign of other countries taking advantage of Americans.
‘THOSE DAYS ARE OVER!’ said Trump, who began his Sunday with a visit to one of his golf courses in Florida.
He has also repeatedly threatened trade actions against the European Union. A spokesperson for the bloc vowed Sunday that it would ‘respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs.’
Canada’s Prime Minister Justin Trudeau slammed US President Donald Trump for betraying Canada as he announced Saturday night that his country would put matching 25 per cent tariffs on up to $155billion in US imports, including alcohol and fruit
Before he was sworn in, President Donald Trump promised sweeping tariffs on China, Mexico and Canada. he is pictured signing an executive order in the Oval Office of the White House on Friday, January 31, 2025
The Chinese government said it would take steps to defend its economic interests and intends to file a lawsuit with the World Trade Organization.
For Trump, the open question is whether inflation could be a political pressure point that would cause him to back down.
As a candidate, Trump repeatedly hammered Democrats over the inflation under President Joe Biden that resulted from supply chain issues during the coronavirus pandemic, the Biden administration’s own spending to spur the recovery and Russia’s invasion of Ukraine.
Trump said his previous four years as president had low inflation, so the public should expect the same if he came back to the White House.
But he also said specifically that higher inflation would stagger the US as a nation, a position from which he now appears to be retreating with the tariffs.
‘Inflation is a disaster,’ he said at a Philadelphia campaign rally. ‘It’s a country-buster. It’s a total country-buster.’
Outside analyses make clear that Trump’s tariffs would hurt the voters that he intended to help, meaning that he might ultimately need to find a resolution.
An analysis by the Budget Lab at Yale shows, if the tariffs were to continue, an average US household would lose roughly $1,245 in income this year, in what would be the overall equivalent of a more than $1.4trillion tax increase over the next 10 years.
Goldman Sachs, in a Sunday analyst note, stressed that the tariffs go into effect on Tuesday, which means they’re likely to proceed ‘though a last-minute compromise cannot be completely ruled out.’
The investment bank concluded that because of the possible economic damage and possible conditions for removal that ‘we think it is more likely that the tariffs will be temporary but the outlook is unclear.’
Trump has repeatedly said the US does not need imports from Canada, which sends cars manufactured by US automakers south along with lumber and agricultural products
Canada and the US are the only two countries in the world that produce maple syrup on a commercial level with 60 percent of Canada’s production exported to the US
Similarly, the Wall Street Journal Editorial Board branded Trump’s sweeping retaliatory tariffs against America’s top three trading partners as the start of the ‘dumbest trade war in history’.
The Journal, known for its conservative slant and in-depth reporting on the economy, said Trump’s levies on Mexico, Canada and China make ‘no sense.’
Two days after the damning piece, Trump showed he was rocked by the criticism and hit back, calling the newspaper ‘always wrong’ and part of the ‘Tariff Lobby.’
His stated rationale has long been to punish these countries for not doing enough to stop fentanyl and other deadly opioids from coming into the US.
He also wants to pressure Canada and Mexico into reducing illegal immigration.
The Journal, owned by billionaire media mogul Rupert Murdoch, a prominent face at Trump’s inauguration, zeroed in more on Trump’s decision to tariff Canada and Mexico, countries that have traditionally been allies and reliable trade partners.
‘Leaving China aside, Mr. Trump’s justification for this economic assault on the neighbors makes no sense,’ the WSJ board wrote.
‘Drugs have flowed into the US for decades, and will continue to do so as long as Americans keep using them. Neither country can stop it.’
The newspaper’s editorial board said Trump is set to start the ‘dumbest trade war in history’
Rupert Murdoch, who owns The Wall Street Journal as well as other conservative outlets like Fox News, was at Trump’s inauguration on January 20
The Journal also slammed Trump for suggesting that the US doesn’t need goods like oil and lumber from Canada and Mexico because there is a big enough supply domestically.
Last month, Trump said of Canada specifically: ‘We allow them to take lumber. We don’t need their cars. We don’t need their lumber. We don’t need their food products because we make the same products right on the other side of the border. It’s sort of crazy.’
The WSJ board wrote: ‘Mr. Trump sometimes sounds as if the US shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home. This is called autarky, and it isn’t the world we live in, or one that we should want to live in, as Mr. Trump may soon find out.’
It pointed to the US auto industry, where last year alone Canada supplied 13 percent of auto parts imports, while Mexico contributed nearly 42 percent.
It claimed that without this trade, American car manufacturers would ‘be much less competitive.’
‘Thousands of good-paying auto jobs in Texas, Ohio, Illinois and Michigan owe their competitiveness to this ecosystem, relying heavily on suppliers in Mexico and Canada,’ The Journal wrote.
More broadly, the American auto industry added more than $809 billion to the US economy in 2023 and supported ‘9.7 million direct and indirect US jobs,’ according to the office of the US Trade Representative.
The Journal also warned Trump that retaliation from all three countries he’s targeting is essentially guaranteed.
The newspaper suggested he should be aware of this consequence because when Trump placed tariffs on aluminum and steel in his first term, Mexico responded by putting tariffs of their own on American steel, pork products, fresh cheese and bourbon.
In his initial announcement of the tariffs on Saturday, Trump suggested that Mexico and Canada need to do more to stem illegal immigration in the US (Pictured: Migrants march across Tapachula, Mexico, on January 26, 2025)
Trump also wants Mexico step up its efforts to stop fentanyl and other deadly opioids from flowing into the US (Pictured: Seized fentanyl pills by Mexican authorities are shown on December 25, 2024)
The Journal pointed out that Trump’s tariffs will lead to Americans paying more for goods, since companies pass along the additional tax to the consumer.
Cars, auto parts and gasoline will be particularly vulnerable to price increases since all of these products have integrated supply chains across North America.
The Journal also argued that Trump’s actions go against the US-Mexico-Canada trade agreement he once touted and will make future free trade deals harder to strike in the future.
‘The US willingness to ignore its treaty obligations, even with friends, won’t make other countries eager to do deals.
‘Maybe Mr. Trump will claim victory and pull back if he wins some token concessions. But if a North American trade war persists, it will qualify as one of the dumbest in history.’