The Nature of Populist Policies
Populist policies, by their very nature, are inherently unjust. They stem from the abuse of power without proper checks and balances, a reality well understood by Mexico’s government as they observe the actions of the U.S. President.
Trump’s Tariff Tactics
The recent tariffs imposed by President Trump transcend the rules of a nation that once prided itself on clear guidelines. This is a common trait among many regimes worldwide.
Trump’s tariffs are being implemented for reasons as irrational and non-commercial as his taxes on Brazil to support Jair Bolsonaro. On the other side, Luiz Inácio da Silva has also engaged in this costly dispute.
Economic Impact
These actions will affect his own economy. For instance, U.S. commercial aviation operates with 620 Brazilian Embraer E175 aircraft, along with hundreds of E170, E190, and E195 models, primarily covering regional routes within the U.S.
Canada and the European Union are also targeted, with threats of increased tariffs. Mexico, though currently silent, is also facing an escalation in tariff penalties, albeit still on paper.
Prolonged Tariff Threats
Since April 2, when Trump declared it “Liberation Day,” he has extended deadlines and exemptions that are starting to create uncertainty in the market, much like the tale of “Peter and the Wolf.”
Mexico City’s mayor, Claudia Sheinbaum, has even acknowledged her experience with such matters.
Concessions and Pressure
Despite the pressure-and-release tactics, Trump has secured some concessions from the Mexican government. Seeing the effectiveness of this approach, he continues to escalate his demands.
Canada currently faces a rougher treatment, with 35% tariffs to the north and 30% to the south. However, Canadian Prime Minister Mark Carney is more resolute against Trump’s measures.
Economic Interdependence
The economic interdependence between the U.S. and Canada is significant, with states like Montana, North Dakota, Manitoba, and Vermont heavily reliant on Canadian imports. Montana alone depends 91.8% on Canadian imports.
Aggressive Stance Towards the EU
Trump’s aggressive stance towards the European Union stems from its capacity to effectively retaliate, despite its limited power.
Trump’s swift concession to China demonstrates that the issue is not about trade balances, but the power each adversary can wield.
Current Trade Tensions with Mexico
We are currently in a period of significant uncertainty, with trade matters taking a backseat to other objectives of the U.S. White House. In Mexico’s case, rules, structures, and trade balances seem to hold less importance than the power to unilaterally impose decisions.
Key Questions and Answers
- Q: What makes Trump’s tariffs unjust? A: They stem from the abuse of power without proper checks and balances, affecting trade relationships unfairly.
- Q: How are Canada and the EU affected? A: Both face increased tariffs, impacting their respective aviation and trade sectors significantly.
- Q: Why is Mexico’s response crucial? A: Given the economic interdependence between the U.S., Canada, and Mexico, Mexico’s response can influence the stability of the entire region.
- Q: What is the significance of Trump’s swift concessions to China? A: It highlights that the issue is about wielded power rather than trade balances.
