25% Tariffs Set to Hit Mexicans And Canadians

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Morning! Just in case you’re tempted, don’t peek at your 401(k) today, because tariffs on Mexico and Canada went into effect this morning, sending the U.S. stock market down 2% yesterday and global markets down today on fears of a global trade war.

Today’s lead story by Ana Swanson, Danielle Kaye, Jack Ewing and Rebecca Elliott rounds up Monday’s moves to impose tariffs. Today the paper’s website is lit up like a Christmas tree with moment-by-moment updates which I’m sure will all be easy to summarize tomorrow in one or two words. Clusterf**k. Actually seriously: Is that one, or two words? Anyway…

So, that’s that, then. The way he talked about it was as if he’d just changed the tires on his dad’s car, or something. Not that I expect he ever did that in his life, but still.

Mr. Trump had previously said he would give Canada and Mexico a month’s grace before imposing the levies “after both countries promised measures like Mexico’s sending more troops to the border and Canada’s appointing a ‘fentanyl czar’.” ON Monday, Mr. Trump’s billionaire commerce secretary, Howard Lutnick, “said in an interview on CNN that Mexicans and Canadians had ‘done a nice job on the border’ but that fentanyl deaths had not fallen by enough,” the story reports.

Markets fell and the Vix volatility index, known as Wall Street’s fear gauge, rose sharply in response. The rest of the story focuses on the consequences of the tariffs, with company executives and foreign officials “scrambling” to avert the consequences to the tariffs, which will “significantly increase the cost of bringing goods in from America’s three largest trading partners.”

I played squash last night with a business owner who brings their products through Canada. Many of the products originate from Europe and have escaped tariffs for now but they’re braced for them to go into effect any minute. The impact will be potentially catastrophic for their business, they said. I tried to square that with the idea of a president who is supposedly “good for the economy,” and struggled. Their landlord is also in trouble on his properties—a hangover from delinquencies during Covid—and so there’s a possibility that their supplier relationships, revenue and premises will take a hit over the coming months. One would hardly describe the mood here as one of great commercial optimism.

Although I did recently find out that Donald Trump played squash when he was at Fordham University. While he was on the team, I gather, they had a losing record. More from the SquashWord blog, authored by my friend James Zug:

He sounds surprisingly fun to be around. And here’s a photo of “Don Trump”, second from right, which James scanned from the Fordham yearbook:

Anyway. Back to the matter at hand, which is that I wish Don had stuck to pranks in college instead of deciding to run for president and then igniting a global trade war.

You know what else is going back to the 1940s? Cars…

Mr. Bown, the economist, describes the tariffs as “much more disruptive to those now highly integrated North American supply chains than anything President Trump did in his first term.”

It is indeed all “disruptive,” but not in the way that tech bros mean when they suggest taking over an old-fashioned industry and returning all the profits to their investors. I mean it’s “disruptive” in the way of a wrecking ball or, say, a blowout in your child’s diaper. Don’t you think?

Please talk to your friends and family about the news and thanks for reading!

Matt Davis lives in Manhattan with his wife and kid.