by Michael Snyder, The Economic Collapse Blog:
It is so important to know when you are holding a losing hand. Canadian Prime Minister Justin Trudeau initially insisted that he would never back down, but Donald Trump had most of the leverage in this situation. Canada’s economy is very heavily dependent on foreign trade, and the U.S. is Canada’s number one trading partner. If Trudeau ultimately decided to dig in for a fight, Canada’s economy would have collapsed. Thankfully, he has agreed to negotiate a deal with Trump. To the south, we must give Mexican President Claudia Sheinbaum a lot of credit for realizing that she simply was not going to win this particular battle. So she has agreed to send 10,000 Mexican troops to help secure the border, and Trump has agreed to pause the tariffs on Mexico for a month as negotiations continue…
TRUTH LIVES on at https://sgtreport.tv/
President Trump announced he is pausing U.S. tariffs targeting imports from Mexico for a month after the country’s president agreed to send 10,000 troops to the U.S.-Mexico border to combat the flow of fentanyl and migrants.
Mr. Trump wrote on Truth Social on Monday that he and Mexican President Claudia Sheinbaum “agreed to immediately pause the anticipated tariffs for a one month period.” The pause, he said, will allow “negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico.”
Trade accounts for 73 percent of Mexico’s GDP, and the U.S. is Mexico’s number one trading partner.
In fact, approximately 80 percent of Mexico’s exports go to the United States.
Without the United States, Mexico basically doesn’t have an economy, and so Sheinbaum correctly recognized that she was forced to make a deal.
Following his conversation with Sheinbaum, the following is what Trump posted on Truth Social…
In this particular case, Trump’s ultra-aggressive negotiating approach worked.
The Mexicans were forced to fold, and Vice-President JD Vance was very excited about this…
For three days a lot of the far left has actively rooted against America and argued we’d get nothing out of President Trunp’s demands that Mexico secure its country.
Well, how do you like them apples?
Just like Mexico, the Canadian economy is also highly dependent on trade with the United States.
In fact, over three-fourths of Canada’s total exports go to our country…
In 2023, Canada exported close to C$550 billion worth of goods and services to the U.S., or more than three-fourths of its total exports. Energy accounted for 30% and manufacturing contributed around 15% to exports south of the border.
Exports to the U.S. accounts for roughly 17.8% of Canadian gross domestic product and more than 2.4 million jobs in Canada.
At first, Trudeau was pledging that he would match Trump’s tariffs with high tariffs of his own…
Canada will retaliate against President Donald Trump’s new tariffs with 25% levies on a raft of U.S. imports, Prime Minister Justin Trudeau said on Saturday, warning Americans that Trump’s actions would have real consequences for them.
As relations between the long-time allies who share the world’s longest land border reach a new low, Trudeau told a news conference he was slapping tariffs on C$155 billion ($107 billion) of U.S. goods. Those on C$30 billion will take effect on Tuesday, the same day as Trump’s tariffs, and duties on the remaining C$125 billion in 21 days, he said.
But then his advisers probably got him to understand that a trade war with the U.S. could potentially collapse the Canadian economy.
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