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How to deal with Donald Trump’s tariff threats

Canada, Mexico and China have options to avoid a trade war

For Donald Trump to announce tariffs and extort trading partners weeks before entering office is true to form. His choice of victim was always going to have a random element.

Canada was hit despite aligning with US trade over the years, including putting tariffs on Chinese electric vehicles. Mexico has had a more fractious relationship with the US but the trilateral US-Mexico-Canada trade deal has held together. China may be the known adversary but local stock markets shrugged off Trump’s late-night social media post; investors had expected a higher tariff rise than the 10 per cent Beijing was threatened with.

But given that Trump’s tariff policy is trying to hit several entirely contradictory goals, immigration and the drugs trade were, frankly, as likely a target as any other. For the US president-elect, tariffs aren’t just trade policy as such. They are also a form of geopolitical leverage.

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