Thursday, July 31, 2025

What did Donald Trump do today?

He caved on Canadian tariffs again (again), with a twist.

Tomorrow is August 1, which was supposedly the last and final deadline for major tariffs to go into effect on goods from America's largest trading partners. Trump has been (accurately) accused of "chickening out" many times before this, and for good reason: the hyper-extreme rates he has been bluffing with would amount to an enormous tax increase on American consumers, and would cripple the U.S. economy if they actually went into full effect.

But Trump, who has been extremely emotionally sensitive to the "chicken" talk, was still rattling his saber as of yesterday: "The August first deadline is the August first deadline — it stands strong, and will not be extended," he wrote on his private microblogging site.

Today, of course, it's a different story: Trump extended the deadline that "will not be extended" on Mexico (the United States' single largest trade partner) for another 90 days—or, at least, that's his story for the next 90 days. 

And for Canada, the country that does the second-most business with the U.S., he set the rate at 35%—but exempted goods covered by the existing USMCA trade agreement, which is virtually all of them.

In other words, Trump is retreating once again to avoid imposing massive taxes on American consumers for the goods they actually need from major trading partners, while inviting huge and much more targeted penalties from foreign countries against vulnerable American export industries.

Trump did offer an interesting variant on his bluff this morning, shortly before he folded: that it would be "very hard" to achieve a trade deal with Canada if its government went through with a plan to formally recognize the state of Palestine.

The two things aren't at all related: it's not like Canada ships lumber to America through the West Bank to avoid tariffs. But the vast majority of the world's countries either already recognize Palestine, or plan to, and "the vast majority of countries" is a pretty good description of who Trump is finding it "very hard" to wage his trade war against.

Map showing effectively the entire world minus the US, Australia, and certain European countries as recognizing Palestine. 

Trump's supposed ability to impose tariffs on a whim, for political reasons or no reasons at all, may not survive a court challenge. Other nations' punitive reciprocal tariffs and the damage done to businesses in the meantime, however, can't be overturned by a court ruling.

Why does this matter?

  • The United States literally cannot afford this level of incompetence. 
  • Economic security and prosperity for American consumers and businesses is much more important than Donald Trump's ego.