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      Trump’s Tariffs Against Canada Can’t Be About Trade

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      I’ll admit that I was sympathetic to Donald Trump’s heresy on trade, during his first term. His tariffs on China and his bid to renegotiate NAFTA prompted much pearl clutching from economists and pundits, but I knew from my reporting how many people in factory towns across America wanted him to do those things. The renegotiation of NAFTA was, ultimately, a bipartisan success story. It passed overwhelmingly. By the end of his first term, many people — including Democrats — acknowledged quietly that tariffs on China and updating NAFTA were necessary. President Joe Biden didn’t reverse them. He built on them. But now Trump seems to have lost the plot.He is tearing up that deal that he himself created by imposing 25 percent tariffs on Mexico and Canada, our largest trading partners. What gives?In the case of Mexico, there have been legitimate concerns that China is getting around U.S. tariffs by building or taking over factories in Mexico. That’s one of a few reasons the U.S. trade deficit with China has declined — to $295 billion last year from $418 billion in 2018 — at the same time the trade deficit with Mexico ballooned to $172 billion last year from roughly $78 billion in 2018, according to Census Bureau data.If you worry about chronic trade deficits, as Trump does, that’s a problem. But Trump’s ire at Canada is a mystery. The U.S. trade deficit with Canada is one of the smallest that we have — it was about $19 billion in 2018 and $63 billion last year. Virtually all of it can be explained by U.S. purchases of oil, gas and electricity, a reminder that Canada is critical to U.S. energy security.Without energy, the United States actually runs a trade surplus with Canada. Canada is the top export market for 34 states — or at least it was.Trump’s targeting of Canada has bewildered even his own political allies on trade. “On Canada, he’s just wrong,” one told me. I can’t pretend to understand what goes on in Trump’s brain. But this much is clear: It ain’t about trade.If you listen to his words, Trump is declaring economic war on Canada, our loyal and peaceful neighbor, because he wants to bring it to its knees and take it over as a 51st state. He’s wielding tariffs as a weapon, not to defend American workers, but to execute a hostile takeover of a country. It is a move so bizarre and shocking that nobody can quite believe it is happening.I was in Indiana this week, which is full of factory towns that supported Trump. Canada is the state’s largest trading partner by far. I didn’t met a soul who thinks beating up on Canada is a good idea. More

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      Why the Fed’s Job May Get a Lot More Difficult

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      President Trump’s plans risk stoking inflation and denting growth, an undesirable combination that economists warn could lead to much tougher trade-offs for the central bank.When inflation was too high and the economy was resilient in the aftermath of the pandemic, the Federal Reserve’s decision to sharply raise interest rates beginning in 2022 seemed like a no-brainer. The same was true just over two years later when inflation had fallen sharply from its recent peak and the labor market had started to cool off. That paved the way for the central bank to lower borrowing costs by a percentage point in 2024.What made those decisions relatively straightforward was the fact that the Fed’s goals of achieving low and stable inflation and a healthy labor market were not in conflict with each other. Officials did not have to choose between safeguarding the economy by lowering rates and staving off price increases by either keeping rates high or raising them further.Economists worry that could soon change. President Trump’s economic agenda of tariffs, spending cuts and mass deportations risks stoking inflation while simultaneously denting growth, an undesirable combination that could lead to much tougher trade-offs for the Fed.“We’re getting to a harder decision point for the Fed,” said Nela Richardson, chief economist at ADP, the payroll processing company.Jerome H. Powell, the Fed chair, indicated little concern about this dilemma on Wednesday after the Fed’s decision to keep interest rates unchanged for a second-straight meeting in light of a highly “uncertain” economic outlook.Mr. Powell did warn that “further progress may be delayed” on getting inflation back to the central bank’s 2 percent target because of tariffs. A combination of rising inflation and weaker growth would be “a very challenging situation for any central bank,” he conceded, but it was not one the Fed currently found itself in.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump’s Tariffs Have Sown Uncertainty. That Might Be the Point.

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      Since taking office, President Trump and his advisers have explained the president’s aggressive economic approach to tariffs with a litany of conflicting ideas. Other countries are “ripping off” America and need to be stopped. The United States is fighting a drug war with Canada, Mexico and China. Tariffs will help pay down the nation’s $36 trillion debt load.The messaging hodgepodge comes as the U.S. economy shows signs of strain in response to Mr. Trump’s steep tariffs on Canada, Mexico and China and as he prepares to enact “reciprocal” tariffs on imports from around the world on April 2.The tariffs have sowed uncertainty and dampened business investment and consumer sentiment while sending markets gyrating daily. They are also likely to prevent the Federal Reserve from cutting rates as policymakers wait to see exactly what measures Mr. Trump follows through with and how they affect the economy.But rather than trying to provide more coherence about their economic strategy, Mr. Trump and his advisers seem to be embracing the uncertainty of his approach as a feature, not a bug.“Absolutely, between now and April 2, there’ll be some uncertainty,” Kevin Hassett, the director of the White House’s National Economic Council, said on CNBC this week amid questions about what investors are to make of Mr. Trump’s trade agenda.Mr. Trump, when asked whether he would give the business community more clarity about his overall approach, largely dismissed concerns that corporations needed predictability.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump’s Tariffs Could Deal a Blow to Boeing and the Aerospace Industry

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      Aerospace companies are big exporters but also very reliant on a global supply chain, making them vulnerable.Boeing is the kind of manufacturer — one that exports billions of dollars of goods — that President Trump says he wants to protect and nurture.But his tariffs could have the opposite effect on the company’s suppliers.Mr. Trump has imposed a few tariffs so far, but he says more are coming in just a few weeks. That threat has unnerved the aerospace industry, of which Boeing is one of the largest companies. Duties on aluminum and steel, two of the most important raw materials used in aircraft, are expected to raise manufacturing costs. But the industry is far more concerned by tariffs that take effect on goods from Canada and Mexico next month, which could disrupt the highly integrated North American supply chain.“These tariffs are particularly fraught for an industry like aerospace that has been duty-free for decades,” said Bruce Hirsch, a trade policy expert at Capitol Counsel, a lobbying firm in Washington, which has aerospace clients. “Parts are coming from everywhere.”Aerospace experts say the industry is an example of U.S. manufacturing prowess. It offers well-paying jobs and has produced one of the largest trade surpluses of any industry for years. Aerospace is expected to export about $125 billion this year, according to IBISWorld, second only to oil and gas.But the industry is operating under a cloud of uncertainty. Many companies have been able to avoid costly cross-border tariffs under a short-term reprieve for products covered by a North American trade agreement that Mr. Trump negotiated in his first term. But that deal expires in April.In a letter to administration officials last week, groups representing airlines, plane repair stations, suppliers and manufacturers asked for an exception to the tariffs, arguing that it was needed to keep the industry competitive on the global market.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump Tariffs Leave No Country Room for Exemptions, U.S. Tells Canada

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      In talks aimed at finding common ground on tariffs, Canadian officials were told April 2 will be a crucial day in setting the Trump tariff doctrine, and any relief could come later.Top U.S. representatives told a Canadian delegation on Thursday that there was no way Canada, or any other country in President Trump’s cross hairs, could avoid a new round of sweeping tariffs on April 2, according to two people with direct knowledge of their conversation.Any negotiations to remove some tariffs or even strike a more comprehensive trade deal would come after that date, American officials told their Canadian counterparts at a meeting in Washington, D.C. Mr. Trump, through an executive order, has ordered an in-depth examination of trade between the United States and several partners, including Canada, and the imposition of “reciprocal” tariffs beginning on April 2, to match surcharges other countries impose on U.S. goods.The United States was represented in the meeting by Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. Canada was represented by Finance Minister Dominic LeBlanc, Industry Minister François-Philippe Champagne, Ontario Premier Doug Ford and Canada’s ambassador to the United States, Kirsten Hillman.The Canadian officials left the meeting, which lasted more than an hour, with a clearer — but not necessarily more optimistic — sense of what lies ahead, according to two of them with direct knowledge of what transpired, who requested anonymity because they were not authorized to brief the press about it.While the Trump officials made clear their pledge on reciprocal tariffs, Mr. Trump has shown a repeated penchant for vowing to press ahead with tariffs only to decide at the last minute to back down or grant a reprieve.The meeting was a an effort to inject a calmer approach to the relationship between the two countries, even as Mr. Trump on Thursday continued to level threats against Canada’s sovereignty.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump apuesta a que EE. UU. tolerará una recesión a fin de revivir la industria manufacturera

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      El presidente ofrece razones para imponer aranceles, como los ingresos, la influencia sobre los competidores y la creación de empleo. Pero el pasado sugiere una historia más compleja.Las guerras comerciales simultáneas del presidente Donald Trump con Canadá, México, China y la Unión Europea equivalen a una enorme apuesta económica y política: que los estadounidenses soporten meses o años de penuria económica a cambio de la lejana esperanza de reindustrializar el corazón de Estados Unidos.Es enormemente arriesgado. En los últimos días, Trump ha reconocido, a pesar de todas sus seguras predicciones de campaña de que “vamos a tener un auge como nunca antes hemos tenido”, que Estados Unidos puede dirigirse hacia una recesión, impulsada por su programa económico. Pero, en público y en privado, ha estado argumentando que “una ligera perturbación” en la economía y los mercados es un pequeño precio a pagar por traer de vuelta a Estados Unidos los puestos de trabajo en la industria manufacturera.Sus socios políticos más cercanos están redoblando la estrategia. “La política económica del presidente Trump es sencilla”, escribió el vicepresidente JD Vance en las redes sociales el lunes. “Si inviertes y creas empleo en Estados Unidos, serás recompensado. Reduciremos las normativas y los impuestos. Pero si construyes fuera de Estados Unidos, estarás solo”.La última vez que Trump intentó algo así, durante su primer mandato, fue un fracaso. En 2018 impuso aranceles del 25 por ciento al acero y del 10 por ciento al aluminio, sosteniendo que estaba protegiendo la seguridad nacional de Estados Unidos y que, en última instancia, los aranceles crearían más puestos de trabajo en Estados Unidos. Los precios subieron y se produjo un aumento temporal de unos 5000 puestos de trabajo en todo el país. Durante la pandemia, se levantaron algunos de los aranceles, y hoy la industria emplea aproximadamente al mismo número de estadounidenses que entonces.Sin embargo, lo más preocupante fue la serie de estudios posteriores que demostraron que el país perdió decenas de miles de puestos de trabajo —más de 75.000, según un estudio— en las industrias que dependían de las importaciones de acero y aluminio. La producción por hora de los fabricantes de acero estadounidenses también había descendido, mientras que la productividad de la industria manufacturera en general en Estados Unidos aumentó.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Takeaways From the Irish Leader Micheál Martin’s Visit With Trump

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      In a meeting with Ireland’s prime minister, President Trump gave no hint of backing down from actions that have caused fissures in the trans-Atlantic alliance.President Trump hosted Micheál Martin, the prime minister of Ireland, at the White House on Wednesday, with an escalating trade dispute with Europe hovering over the usual pomp and circumstance.Official Washington, dappled in green, feted Mr. Martin at the traditional visit ahead of St. Patrick’s Day. But Mr. Trump gave no hint of backing down from actions that have caused fissures in the trans-Atlantic alliance.In the Oval Office, Mr. Trump, seated next to Mr. Martin, railed against the European Union’s trade policies and regulation of American companies.“The European Union treats us very badly, and they have for years,” he said.Mr. Martin largely took a back seat during the meeting, seeking to avoid the fireworks that erupted at the White House two weeks ago when Mr. Trump rebuked President Volodymyr Zelensky of Ukraine, casting him as ungrateful for U.S. aid.Here are three takeaways from Mr. Martin’s visit.The president showed no signs of changing course on tariffs.The stock market has declined. Top business leaders are privately complaining. And even some Republicans are voicing concern. But Mr. Trump said on Wednesday that he had no plans to change his strategy on sweeping tariffs.In fact, Mr. Trump suggested that he might institute steeper levies after the European Union announced billions of dollars in retaliatory tariffs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump’s Call to Scrap ‘Horrible’ Chip Program Spreads Panic

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      The president’s attack on the key tenet of the Biden administration’s industrial policy has set off concerns that he may claw back its funding.As President Trump addressed Congress last week, he veered off script to attack a sensitive topic, the CHIPS Act, a bipartisan law aimed at making the United States less reliant on Asia for semiconductors.Republican lawmakers had sought and received reassurances over the past few months that the Trump administration would support the program Congress created. But halfway through Mr. Trump’s remarks, he called the law a “horrible, horrible thing.”“You should get rid of the CHIP Act,” he told Speaker Mike Johnson as some lawmakers applauded.The CHIPS program was one of the few things to unite much of Washington in recent years, as lawmakers on both sides of the aisle worked with private companies to draft a bill that would funnel $50 billion to rebuild the U.S. semiconductor industry, which makes the foundational technology used to power cars, computers and coffee makers. After President Joseph R. Biden, Jr. signed it into law in 2022, companies found sites in Arizona, New York and Ohio to construct new factories. The Commerce Department vetted those plans and began to dole out billions of dollars in grants.Now, Mr. Trump is threatening to upend years of work. Chip company executives, worried that funding could be clawed back, are calling lawyers to ask what wiggle room the administration has to terminate signed contracts, said eight people familiar with the requests.After the speech, Senator Todd Young, the Indiana Republican who championed CHIPS, said he reached out to the White House to seek clarity about Mr. Trump’s attack because the criticism was “in tension” with the administration’s previous support.Senator Todd Young, the Indiana Republican who championed CHIPS, said he reached out to the White House to seek clarity about Mr. Trump’s attack, which he said was “in tension” with the administration’s previous support.Eric Lee/The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More