Ideology, Markets, and the Temptation of Tariffs

If dealmaking means wielding the threat of catastrophe to secure incremental gains, then Donald Trump has long mastered the art. His approach to global trade has been one of brinkmanship—leveraging the threat of tariffs to force concessions. His February 3rd move to grant Canada and Mexico a 30-day reprieve from a punishing 25% tariff on automobiles was a textbook example of this strategy. In exchange, he secured a modest but tangible boost in border security cooperation, including 10,000 additional Mexican troops and a reiteration of prior commitments.

Was this "dumbest trade war in history" also the shortest? Investors seem to think so. When Trump initially threatened tariffs, the S&P 500 dropped 3%, only to recover more than half its losses after his deal with Mexico. But this optimism may be misplaced. The assumption that Trump’s trade aggression is merely a negotiating tactic underestimates its potential for long-term disruption. The reality is that his trade war may be just beginning.....

To read the rest of my article for FREE, please go to my SUBSTACK

Big Tariff Shock Looms

Even if your company has never faced tariffs and has no direct dealings with China, Canada, or Mexico, prepare for potential impacts from the second Trump administration's tariff policies, as highlighted by PwC experts at the 2025 Tax Policy Media Breakfast.

According to Chris Desmond, PwC’s US global trade services principal, tariffs could deliver "a big shock to the operating model" for unprepared companies. However, there's substantial uncertainty around which countries will be targeted, the scale of tariffs, their implementation timeline, and even their actual imposition. Krishnan Chandrasekhar, PwC US tax leader, emphasized the role of tariffs as negotiation tools, a dynamic exemplified by the rapid escalation and de-escalation of US-Colombia tariff threats on January 26.

In this unpredictable environment, PwC recommends that business leaders engage in extensive scenario planning. Finance leaders should thoroughly understand how different tariffs could affect their "supply chain operating model down to the country, country of origin, and product," Desmond advised.

Trump's Tariff Tantrum Turns Canada Into Comedy Central

Looks like Trump thought he could bully Canada with tariffs like he was shooing a goose off his golf course, but oh boy, did he pick the wrong country for his antics. After he announced his 25% tariff threat, Canadians, known for their politeness, got a bit... un-Canadian. At sports arenas, instead of the usual respectful silence during the U.S. anthem, fans decided it was time for a good old-fashioned jeer fest. Social media lit up faster than a bonfire with hashtags like #BoycottUSA, and whispers of selling off those sunny Florida getaways were heard from Vancouver to Halifax. But the real kicker? Canada's contemplating giving the U.S. auto industry such a cold shoulder it might just freeze over, threatening layoffs colder than a Winnipeg winter. And in the ultimate twist of fate, Ontario's decided to give Elon Musk's Starlink the cold boot, because apparently, even space isn't safe from this trade tiff.

My Musings: This is less a trade war and more like watching Canada turn into the lead in a satirical sketch show where Trump's the punchline. It's as if the whole nation decided, "Enough with the nice guy act; let's show them how we really feel!" The image of Canadians at sports games booing the U.S. anthem is peak comedy - I can just see the headlines, "Canadian Politeness Officially on Hiatus." And the thought of Canada essentially saying, "Okay, but we'll take your cars and your internet with us," reeks of a plot from a dystopian sitcom where the quiet neighbor becomes the king of the hill.

The potential for more retaliation is like waiting for the next episode of this bizarre reality show where Canada, in its quiet, unassuming way, might just teach Trump a lesson in international manners - or the lack thereof. Who knew tariffs could be so entertaining?