by Ben Whedon
Major stock indices closed down on Monday as the market reacted to the evolving situation. Nonetheless, they rebounded quickly from downward opens, defying Sunday evening predictions that a trade war would crash the stock market.
President Donald Trump’s recent threats to impose 25% tariffs on Mexican and Canadian goods have led to both nations pledging thousands of troops to patrol the border for drug traffickers and illegal immigrants and seen markets largely ignore what critics had warned would be a tumultuous development.
Trump on Monday confirmed he had a “friendly conversation” with Mexican President Claudia Sheinbaum and that she had “agreed to immediately supply 10,000 Mexican Soldiers on the Border separating Mexico and the United States.”
“These soldiers will be specifically designated to stop the flow of fentanyl, and illegal migrants into our Country,” he added. “We further agreed to immediately pause the anticipated tariffs for a one month period during which we will have 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.”
Trump further expressed optimism that the United States would secure a favorable agreement with Sheinbaum’s government for the long term. The same day, Trump spoke with Canadian Prime Minister Justin Trudeau and signalled he would make similar demands of Ottawa to postpone the implementation of tariffs.
“Canada doesn’t even allow U.S. Banks to open or do business there. What’s that all about? Many such things, but it’s also a DRUG WAR, and hundreds of thousands of people have died in the U.S. from drugs pouring through the Borders of Mexico and Canada,” Trump posted.
Speaking on the “John Solomon Reports” podcast on Monday, former National Security Council chief of staff Fred Fleitz opined that the Mexicans had left Trudeau “twisting in the wind, and it's only a matter of hours before the Canadians capitulate too.”
“We're seeing what happens when you have a strong and decisive president who's going to not stick to the norms of the foreign policy establishment, and we see a president with experience in foreign policy,” Fleitz declared.
“These nations want to quickly make a deal. They're afraid,” he insisted. “They know Trump's going to follow through on them, and as we get deal after deal, as the President racks up wins, he's also racking up credibility,” Fleitz concluded. He was right.
Canadian Prime Minister Justin Trudeau on Monday evening announced that he had reached his own agreement with Trump to postpone tariffs for 30 days as the nation implemented its own border security measures. Trudeau committed to deploying 10,000 personnel to protect the border, implementing a “$1.3 billion border plan, appointing a “Fentanyl Czar,” and designating drug cartels as terrorist groups.
"I am very pleased with this initial outcome, and the Tariffs announced on Saturday will be paused for a 30 day period to see whether or not a final Economic deal with Canada can be structured. FAIRNESS FOR ALL!" Trump declared.
Voters approve of tariffs as a negotiating strategy
Trump’s declared support for tariffs during the 2016 presidential election cemented his status as a heretic to the orthodox, pro-free-trade GOP. But the 45th and 47th president’s use of those tariffs during his first term and now as a negotiating tactic seems to have won over the broader public on revenue raisers.
A December survey from the Napolitan News Service found that 54% of voters approved of threatening Canada and Mexico with tariffs to extract concessions from those nations on immigration and border security. Only 31% opposed the plan while 15% were unsure. Notably, only 37% believed that the tariffs themselves would benefit the economy, signalling that Americans support the negotiating tactic, if not the threat’s implementation.
Fifty-two percent of Americans overall expected the plan to work at the time, including 70% of Republicans and 38% of Democrats.
A more recent Quinnipiac poll, however, found that 38% supported tariffs on Canada, China, and Mexico while 51% disapproved of them. Reacting to CNN’s feature of the Quinnipiac poll, Scott Rasmussen, who conducted the Napolitan survey, emphasized that the “focus is on tariffs. He's right, they're not terribly popular no matter how you phrase it.”
“However, we asked about a negotiating tactic to help secure the border,” Rasmussen added. “People like that because they think it will work. After all, we have tremendous economic leverage over both Canada and Mexico.”
The market didn’t care
Major stock indices closed down on Monday as the market reacted to the evolving situation. Nonetheless, they rebounded quickly from downward opens, defying Sunday evening predictions that a trade war would crash the stock market.
“And on the 13th day he crashed the global markets,” longtime Trump critic and former White House Communications Director Anthony Scaramucci posted Sunday. It didn't happen.
The Dow Jones closed down 0.28% on Monday. Virtually all other indices, including the NASDAQ and S&P 500, moreover, posted significant rebounds from their initial opening lulls. The NASDAQ dropped 1.2% while the S&P 500 dropped 0.76%.
Ben Whedon
Source: https://justthenews.com/politics-policy/tuetrumps-game-trade-chicken-defies-market-worries-extracts-concessions
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