I'm glad Nate closed with the section of why his own analogy is woefully inappropriate to explain this situation. But he ignores the most important aspect. We do have a real and looming economic and geopolitical conflict, but not with Canada or Mexico or the EU but with China. And who do we need to help us in this conflict, all of the countries Trump is alienating.
International relations cannot be distilled to a turn based model of a simple poker game. Pissing of your allies to get basically nothing in return is a losing strategy in the real game we should we worrying about.
Come on Nate, put in a little more effort to research and think about these things! Historically game theory was almost immediately applied to international relations and there is a rich literature as far back as the 50s in this topic.
You basically wrote what I was thinking, except I wouldn't have been nearly so quick to assume that pissing off our allies was a strategic mistake (or even that the final outcome would be pissed off allies - human psychology is effing weird.)
To spitball an example, if Canada as a result of this episode becomes less complacent about its defense & infrastructure spending then we'd arguably come out with an ally that's better-positioned to help face down China.
I don't pretend to know what this administration's actual thinking is on these matters - but I do expect that these strategic concerns dominate any game-theory impacts that tariffs might have.
Offensive and defensive military spending serve distinct purposes. If they’re ramping up defense, it’s almost certainly to guard against the only real threat they might face—the U.S.—since no other nation can challenge their territory. To counter China effectively, we need to invest in a powerful navy and air force, not land-based defenses or forts along the Canadian border.
In 2018 Trump blackmailed Mexico into using its newly formed National Guard (a federal police force that was supposed to fight drug trafficking) to instead do border enforcement for the US. That's how he lowered illegal immigration to a trickle.
He essentially made Mexico pay for a border wall. He is now returning to the status quo from that period. That is not "basically nothing".
I think you fundamentally do not understand Trump--you are simply not thinking cynically enough.
Here's what Trump knows about any eventual trade deal between the US and any of these other countries: 99% of his voters will not know what is in it. These deals are thousands of pages long and extremely complicated--and crafted by industry lobbyists (Elon Musk for instance) and individual members of Congress who want to bring home goodies for their district.
In other words, for 99% of Trump's voters, whether ANY future deal is a "good one" or not for the US depends entirely on... whatever Fox News says it is. And Fox News is going to say it's great regardless of what is in it.
And Trump knows that. He knows that the content of these deals, and whether or not they are *actually* "good for the USA" is completely irrelevant (and this is nearly impossibly to quantify in any case).
Trump's entire goal--his ONLY goal--is to make sure Fox News has good material for their eventual story on why the new trade deal Trump signed was so awesome.
Put that in your game theory and smoke it :-).
I suspect our trading partners know this, at least implicitly. I suspect they all know that they are only seeing a bunch of political bluster, and that none of it will affect page 2,734, Section CXVII, Part A of the agreement on car batteries for medium trucks during the winter months.
They know what Trump wants--and they know it has nothing to do with any economic outcome for the US--very much unlike that of their own country.
They know, in short, that the American people today are so rich that average voters will never ever vote differently based on what is inside their trade deal, choosing to instead to vote on things like the candidate who makes the people they hate the angriest. This is in sharp contrast to our trading partners who actually have to care about the substance of these deals (for different reasons obviously, between China and the democracies).
Don't be fooled by the reaction by other countries to Trump's "threats"--they know very well the part they are supposed to play in Trump's theater.
It's worth noting, by the way, that this framework perfectly explains what happened in the last week:
1. Trump promised big tariffs on these countries.
2. Trump turned the tariffs on, saying there might be short term pain.
3. The markets went down by 5%.
4. Trump said "just kidding" and rescinded the tariffs.
Is there any action in there, anywhere, where Trump would have been acting based on what is "good for the USA"? (And again, based on the complexity and the double-edged nature of any trade deal term within our economy, **how would you even define that**?).
THIS is the way to understand what is going to happen next with our trade relations, not trying to imagine there is some objective "good (overall) deal" that anybody in Trump's party cares about.
Other politicians use publicity stunts in their reelection campaigns. The difference with Trump is that his entire presidency--and his entire life--is a publicity stunt.
I don't think that's the implication? Trump's statement said that the military entered California and "TURNED ON THE WATER". The implication from the white house is that Trump has cut through red tape to send more water downstream to fight the fires. That is a laudable goal on its face, and is the part that "his base will love"
However that water wasn't and never will be used on the fires. It's not like it goes to LA, it just goes into Tulare Lake, and there was no plan given to transport it for use in firefighting. That water was supposed to be for irrigation in the summer, it is stockpiled during the rainy season for use in the dry season. Releasing it early with no purpose is purely a publicity stunt.
I think that anything Trump does is going to have a minor impact on public perceptions compared to the widespread perception of Californians that the Democratic establishment in that state is incompetent.
That's fine I guess, but doesn't really have anything to do with the subject? What does that have to do with the water in Californian dams from earlier this week?
Specifically, what is Trump's incentive to take that action?
The GOP controls the House right now because a bunch of CA districts flipped Republican in 2020.
I would also note that I think you could also make the argument that Trump won in 2024 because of California. The state GOP there picked up a lot of expertise in mail in balloting (which paid off in 2020) that was then disseminated in time for the big Republican push to embrace mail ballots in 2024.
Lack of irrigation water won't cause a breakdown in CA government services, it will cause crop failures in America's bread basket, which will make groceries more expensive, which will be bad for Republicans in coming elections.
Whether it causes crop failures depends on a host of other factors, not least of which is the local weather. If you can predict that you have my compliments.
Next, whether prices rise in aggregate is also dependent on many other factors. At the very least wage growth was supposed to finally catch up to inflation this year, which is a bit of good news for Trump.
Sure, it's possible that California will have an unusually wet spring and refill the reservoirs. It's not likely, though. And it's certain that without enough irrigation water crops will fail. The region does not get enough rain to make dry farming feasible.
Let's assume that crops are guaranteed to fail now. Why would any of these farmers be planting fields that they know they're never going to be able to harvest?
And if you are in charge of stocking supermarkets wouldn't you be looking at bringing in produce from other regions, possibly from outside of the country? And if you're a farmer in one of those other regions (or more likely a giant agribusiness) wouldn't you be looking at increasing yields to compensate for a shortfall from California?
Yes, but it isn't just Fox News. All the news outlets carried the story, and the potential damage if tariff battles went global.
Even the non-Fox News low information types get to walk away with the impression that Trump is crazy like a fox.
The NY Times today buried this gem in 32nd paragraph :
"Economic research published last year found that Mr. Trump’s tariffs in his first term had not accomplished his stated aims of increasing manufacturing jobs, but that they had still benefited the president politically, by winning over voters for the Republican Party. "
(The research was linked via a Feb 2024 NY Times article to :
Cynical & naive. Proof will be in the numbers. In a case of Prisoners Dilemma, both can go tit-for-tat & be better off. They can see each others action & not necessarily defect
Cynical? Sure. As I said, most aren't cynical enough when it comes to Trump and because of that his actions are surprising to them. Personally, nothing Trump has done so far has been outside of my predictions--he is operating 100% for himself, which is consistent with every single action he has taken all of his life.
So, naive? I don't think so. I think it's those who say things like "Trump doesn't understand" or imagine he's playing some kind of 4-D chess game are the naive ones. There's simply no evidence that is the way he has ever operated, ever.
" We threatened tariffs, and because Trump’s threats are fairly credible for reasons ranging from his ideological commitments to his reputation as a rogue actor, Canada and Mexico capitulated."
And what was the capitualtion? Canada reannounced they are moving troops to the border? LOL.
Seriously, where would that thought come from, curiously curious on that comment. Everything he mentioned in the tirade he had about the Canadian border was..... exaggerated (that fits) information
1. The administration expects some increase in illicit activity at the Canadian border as security at the southern border is ramped up.
2. Trump is looking to slash the federal budget by as much as possible. If the Canadians ramp up border enforcement to the north that might mean that the US could decrease expenditures. In other words, Trump is looking to offload the costs of border enforcement with Canada onto the Canadians to save money.
Canada had already announced a $1.3 billion border plan and moved 8,500 (of the promised 10,000 personnel) to the border.
The only new "concessions" that Trump got from Canada were:
- Canada will appoint a "fentanyl czar" (?)
- Canada will spend $200 million on intelligence to fight fentanyl and crime.
Also, as the Washington Post noted:
"It’s worth emphasizing that the flow of fentanyl from Canada is a tiny percentage of the drug that’s seized at U.S. borders — about 0.2 percent. Border authorities seized about 43 pounds in 2024, compared with more than 21,000 pounds from the Mexican border."
The only significant result Trump achieved by placing tariffs on Canada is that he's managed to anger the US's longest-standing ally. That is consequential.
I agree with Canada being "angry" in the TV show they are playing a role in, but they know their role is to... pretend to be angry so when the eventual deal is signed they will deliver to their trading partner the thing that partner wants the most, which is for their leader to *appear* to have made a great deal.
Trump doesn't care about the actual substance of these deals (because his voters don't care), and the people who do are deeply embedded in the lobbying process and nobody will ever know about them.
Canada, Mexico and China are going to win the *overall* substance of these deals for the sole reason that they care about that substance and the US does not The deal will be negotiated by industry lobbyists and they are going to do whatever they were going to do in any case, but insofar as there is a high-level strategic factor, the US will have a weaker hand.
It goes deeper than that – the Canadian *people* are angry.
We've loved the US: we vacation there, we shop there, we consume US media. We've sent our soldiers to support the US in almost every major military deployment (Afghanistan, Iraq, Syria, Korea, etc).
Canadians feel slapped in the face by a nation we thought was our friend. There is real, long-term damage to trust that's been done here.
8,500 is the existing number of Canada Border Services employees. These aren't new jobs. We have 1,200 ports of entry so this is about 7 per port. The expectation in Canada when the news came out was that these would be an additional 10,000. But it's already being watered down. I will be suprised if we get the additional 1,500.
It's not a major concession, but both Canada and Mexico eventually agreed to do something they didn't really want to do for essentially no consideration. Whether it's useful or effective is a different question.
There's something like $200 million in additional border security in the most recent announcement as compared to December's. Trump was apparently intent on squeezing blood from a stone.
The S&P 500 is down $700B in value from 1/31 to today, so I'm not sure $200M in additional border security on the border we don't really care about (honestly there is probably more problems flowing from the U.S. into Canada than the reverse) was worth it.
Canada doesn't want fentanyl in North America any more than the US does!
That's what's insidious about this: the US and Canada want the same thing.
But 99% of the fentanyl doesn't come from Canada. It comes from Mexico, China, and domestic labs.
So, if Trump is trying to achieve an objective ("less fentanyl in the US") by putting tariffs on Canada, his method is achieving nothing of importance.
It may be a preemptive measure. If border security at the south tightens the natural response would be smugglers moving operations to try to find the weakest link.
If this was preemptive, why not *partner* with one of your greatest friends & allies to achieve this together?
Why use "a stick" (which you'd typically employ with an enemy) at all?
It's not like Canada was saying: "We don't want to be part of a united front against illegal immigration and drug trade."
Canada and the US have a long-standing history of collaboration to combat crime, drug trafficking, and illegal immigration: Operations Caribbe & DisrupTor, the Canada–United States Safe Third Country Agreement, etc...
I was looking at the US debt calculator, maybe an easier ask would have been "Hey Canada can you help us step up border security as we are in a bit of a financial crunch"
Canada first announced it would deal with the border issues when Trump first threatened tariffs way back in November or December. We wouldn't have done anything otherwise. Trudeau et al was happy with the status quo. Plus Trudeau had resigned. There was no incentive for him to do anything. Trump knew that. It was only when Trump said he was really going ahead and set a deadline that the other Liberal MPs saw their chances of ever getting elected again disappearing that Trudeau acted. It remains to be seen if anything actually happens or of this is just like the perennial promise that next year we really will meet our NATO commitment.
I think the other big difference is that a poker game is zero-sum. There's no way that you and the other players can work together to increase the overall amount of money on the table. (Well short of recruiting more players). But in international trade doing this stuff trades off against opportunities for positive sum interaction.
Trump doesn't believe in positive sum interactions.
If I'm being very charitable, even if he does believe in mutually beneficial relationships, he'll never publicly admit to it. He'll always frame it as the US is the one being ripped off.
Then he'll do a performance where he pretends to twist people's arms. It feeds into his base's victim complex & main character syndrome.
Donald Trump got far less from Mexico and Canada than people think. Joe Biden got similar concessions from Mexico when he came into office (and got Mexico to help him cut border crossings down again); this entire trade war is a farce and terrible diplomacy.
It's also highly illegal: we signed a treaty with Mexico and Canada to govern trade. There is a cost to the US breaking its word on a whim, not that Trump cares.
Yep, a game of chicken where Trump blinked first after the markets tanked in after-hours trading. He had to in order to re-stabilize. One thing to point out: while 20ish % of CAN GDP is on US exports, a decent chunk of that is oil and precious metals. The Trump tariffs did not touch those exports.
Trump was going to tariff Canadian oil at 10% and precious metals at 25%. But it's worth pointing out that there are other markets for those goods. Sure, it takes time to adjust and sell them overseas, but after a year of pain Canada will find other markets.
Yes it did, though one he realize the effect it would have on the US, those were hastily reduced to 10%. Noting that 25% of Gas in the US is derived from Canada delivered crude.
There is a vast difference between this and a poker tournament. First of all, everyone sees everyone's cards. Second, this is an iterative game played with all the players at once over the years. Poker is a blind game, and while you could argue that some of the best players (or the local dads) play an iterative game, "tournament play" which you refer to, is the LEAST iterative poker type. Tables are being scrambled all the time!
All Trump is doing here is letting every country in the world know that he is full of s**t. He threatened our two most friendly trade partners with whom we have the most leverage and then IMMEDIATELY BACKED DOWN once he had a phone call with them. Anyone who we would seriously ever want to start a trade war with now has information about how Trump behaves at essentially no cost.
Your article argues that in a vacuum, what Trump could make some kind of sense. But we're not in a vacuum; everyone has now gotten needless information about how Trump plays.
Although the game theory here is interesting and the analysis data-driven, a simpler take is that both Canada and Mexico called trump's bluff, offering minor face-saving concessions only. Trump bluffs a lot, no?
You might as well explain that here too. Is the point that a checklist in the hands of a Canadian is a deadly weapon?
"Don't get involved in a land war in Asia" has unclear origins, but it is at least as much American as anywhere else. The Princess Bride line was delivered after the Korea and Vietnam wars.
To be clear I'm not saying Canada is inert. Just that in this specific situation Trump is picking on them to impress his US base.
I think it's wrong to say that Canada and Mexico would be "irrational" to retaliate. It’s true that a drawn-out trade war would cause deep recessions in those countries. But within the short-to-medium term they could redirect their trade to other countries, particularly China. In fact, part of the reason China isn't already a larger trade partner for these countries is that the US has previously used its leverage to limit Chinese involvement in Canada and Mexico.
My husband pointed out that instead of being like a poker tournament, international trade is more like a home table game. We're basically the friend who's been using their employee discount to get cheaper pizza for these games, but now we've started to play like a jerk. Our friends are now in the position of trying to figure out how to kick us out of the game, because they don't want to deal with the bullying anymore. They may have to pay more for pizza, or eat fewer snacks, or invite a couple more guys to the game to replace our contribution, but any of those options will be worth it if poker night becomes fun again because the bully is gone. Alternatively, we could go back to playing nicely and everyone would be better off.
They might "surrender" this time (I put it in quotes because it sure seems like they said they were capitulating without actually making any concessions), but if Trump keeps trying this, they are going to try to figure out how to kick us out. We're not easy to replace, but my point is that international trade is like an ongoing social game. You might put up with a bully who brings cheap pizza for a few weeks in the hopes that they'll see the light and stop being a jerk, but eventually they'll look into how to live without them.
But these are both things they agred to back in December. They just reiterated exactly what they were planning on doing.
Usually, you'll go with the guy who buys $1000 of your stuff, but if they're enough of a jerk, you will try to find ways to stop needing his money. If you're a freelancer and you get $1000 of business from one guy but he's a huge PITA to deal with, you're going to start re-jiggering your business so you can fire him as a client. If he's currently 25% of your business, it's unlikely you can do it immediately. But are you going to start looking harder for clients who can make up for that business? Absolutely. You might even decide that getting 3 new clients who can do 7% each and take a 4% pay cut is worth not having to deal with the jerk's antics.
Trump negotiate _some_ of the details with Trudeau in December. The most recent announcement includes new spending. And this is the first public announcement from Mexico.
Regardless of what actual any real accomplishment Trump's actions here produced, this is playing great with the base. Perhaps that's all Trump wanted, something he could call a win and for people that might not wish to look hard will believe it so. A performative effort and Trumps not the only politician doing it although he seems to be a master of it.
I have to imagine another negative consequence of this stunt will be that both Mexico and Canada (and any business/angry local citizen with the means?) will look for opportunities to reduce their exposure to this threat. i.e. diversifying import and export markets -- none of which will improve the trade deficits Trump claims to care about so much.
This is correct -- and of course it's obvious that tariffs on Canadian and Mexican goods (especially if there is no retaliation, as Trump demanded) will increase the trade deficit as well!
Trump threatened tariffs on Mexico and Canada because those countries are obviously the largest source of illegal immigrants and drugs into the United States. Trump stated that this was not a trade war but a demand they help with those two issues.
Canada has agreed to list drug cartels as terrorist groups. Mexico no longer sits idly by as caravans of thousands of people cross its territory with the express intention of entering the US illegally. Colombia now accepts repatriation flights. Progress!
It could also be a preemptive measure. If border security to the south tightens up you would expect criminals and smugglers to try to shift operations.
The topic was the drug cartels and terrorist groups as you mentioned in your original note.
The only "concession" was that neither side will impose tariffs in the short term, which benefits Canada because it has less economic resilience than the US in a trade war
(Just have to love how mentioning a vaporized IRGC General gets the all-caps hysterics out!)
Are we certain that Mexico just sat idly by? I'm not saying they can't do more, but sitting idly by? Also, I think time will tell whether listing cartels as terrorist groups is effective. Maybe, but so much of this feels performative to me. At the end of the day, I don't understand the notion that Canada, Mexico, or anyone else can fight the "War on Drugs" any better than the US can.
Yup, we're pretty certain Mexico was standing by because we saw caravans of thousands passing by in broad daylight on their way to the US border, watched by journalists and police all along the way.
Listing drug cartels as terrorist groups allows all the anti terrorist tools to be used against them, including targeted assassinations. Mexico's long history of single party rule under the PRI leaves it well acquainted with those.
Taiwan is the next target in the tariff spectacle—this time with threats of 100% tariffs on semiconductors, an even more critical resource than Canada’s oil and minerals.
The tariffs will be postponed for a month—just long enough for Taipei 101 to be temporarily renamed Trump 101. Rinse and repeat.
As others have pointed out w/r/t Canada and Mexico, this is more play-acting by Taiwan -- announcing activities they were already doing, but saying that it's a response to Trump's tariff threats. This way they can allow Trump to say he got this "concession" from them without having to actually talk to him.
The real reason Taiwan has been investing in bringing production to the United States has to do with the trend for more American firms to look closer to home for production resulting from the various supply chain disruptions they encountered in 2021 and 2022 as well as ongoing tensions between the United States and China (which have obviously been escalating since well before Trump took office in 2017).
Regarding Taiwan and semiconductors specifically, there is the ongoing threat that China will physically threaten Taiwan's autonomy, which would of course result in a huge disruption to the flow of semiconductors. Additionally, the CHIPS Act, which Biden signed into law, allocates billions in direct support from the federal government for firms to build semiconductor production in the United States, which has been happening now for a few years.
Another announcement made to give the appearance that Trump is being effective.
I'm glad Nate closed with the section of why his own analogy is woefully inappropriate to explain this situation. But he ignores the most important aspect. We do have a real and looming economic and geopolitical conflict, but not with Canada or Mexico or the EU but with China. And who do we need to help us in this conflict, all of the countries Trump is alienating.
International relations cannot be distilled to a turn based model of a simple poker game. Pissing of your allies to get basically nothing in return is a losing strategy in the real game we should we worrying about.
Come on Nate, put in a little more effort to research and think about these things! Historically game theory was almost immediately applied to international relations and there is a rich literature as far back as the 50s in this topic.
You basically wrote what I was thinking, except I wouldn't have been nearly so quick to assume that pissing off our allies was a strategic mistake (or even that the final outcome would be pissed off allies - human psychology is effing weird.)
To spitball an example, if Canada as a result of this episode becomes less complacent about its defense & infrastructure spending then we'd arguably come out with an ally that's better-positioned to help face down China.
I don't pretend to know what this administration's actual thinking is on these matters - but I do expect that these strategic concerns dominate any game-theory impacts that tariffs might have.
Except Trunp didn’t mention spending more on defence—which would have made sense. Canadian here.
A great deal of ill will has been generated.
Offensive and defensive military spending serve distinct purposes. If they’re ramping up defense, it’s almost certainly to guard against the only real threat they might face—the U.S.—since no other nation can challenge their territory. To counter China effectively, we need to invest in a powerful navy and air force, not land-based defenses or forts along the Canadian border.
We need to make sure the entire border of Nunavut is protected from Russia!
In 2018 Trump blackmailed Mexico into using its newly formed National Guard (a federal police force that was supposed to fight drug trafficking) to instead do border enforcement for the US. That's how he lowered illegal immigration to a trickle.
He essentially made Mexico pay for a border wall. He is now returning to the status quo from that period. That is not "basically nothing".
I think you fundamentally do not understand Trump--you are simply not thinking cynically enough.
Here's what Trump knows about any eventual trade deal between the US and any of these other countries: 99% of his voters will not know what is in it. These deals are thousands of pages long and extremely complicated--and crafted by industry lobbyists (Elon Musk for instance) and individual members of Congress who want to bring home goodies for their district.
In other words, for 99% of Trump's voters, whether ANY future deal is a "good one" or not for the US depends entirely on... whatever Fox News says it is. And Fox News is going to say it's great regardless of what is in it.
And Trump knows that. He knows that the content of these deals, and whether or not they are *actually* "good for the USA" is completely irrelevant (and this is nearly impossibly to quantify in any case).
Trump's entire goal--his ONLY goal--is to make sure Fox News has good material for their eventual story on why the new trade deal Trump signed was so awesome.
Put that in your game theory and smoke it :-).
I suspect our trading partners know this, at least implicitly. I suspect they all know that they are only seeing a bunch of political bluster, and that none of it will affect page 2,734, Section CXVII, Part A of the agreement on car batteries for medium trucks during the winter months.
They know what Trump wants--and they know it has nothing to do with any economic outcome for the US--very much unlike that of their own country.
They know, in short, that the American people today are so rich that average voters will never ever vote differently based on what is inside their trade deal, choosing to instead to vote on things like the candidate who makes the people they hate the angriest. This is in sharp contrast to our trading partners who actually have to care about the substance of these deals (for different reasons obviously, between China and the democracies).
Don't be fooled by the reaction by other countries to Trump's "threats"--they know very well the part they are supposed to play in Trump's theater.
It's worth noting, by the way, that this framework perfectly explains what happened in the last week:
1. Trump promised big tariffs on these countries.
2. Trump turned the tariffs on, saying there might be short term pain.
3. The markets went down by 5%.
4. Trump said "just kidding" and rescinded the tariffs.
Is there any action in there, anywhere, where Trump would have been acting based on what is "good for the USA"? (And again, based on the complexity and the double-edged nature of any trade deal term within our economy, **how would you even define that**?).
THIS is the way to understand what is going to happen next with our trade relations, not trying to imagine there is some objective "good (overall) deal" that anybody in Trump's party cares about.
This explains why he ordered the Army Corps to dump billions of gallons of irrigation water from California dams. His base loved it.
Not a single drop was used to fight wildfires. There won't be enough irrigation water later this year because of this publicity stunt.
Other politicians use publicity stunts in their reelection campaigns. The difference with Trump is that his entire presidency--and his entire life--is a publicity stunt.
Why exactly would his base rejoice in seeing California burn?
If anything the breakdown of government services in California may give Republicans a boost in coming elections.
I don't think that's the implication? Trump's statement said that the military entered California and "TURNED ON THE WATER". The implication from the white house is that Trump has cut through red tape to send more water downstream to fight the fires. That is a laudable goal on its face, and is the part that "his base will love"
However that water wasn't and never will be used on the fires. It's not like it goes to LA, it just goes into Tulare Lake, and there was no plan given to transport it for use in firefighting. That water was supposed to be for irrigation in the summer, it is stockpiled during the rainy season for use in the dry season. Releasing it early with no purpose is purely a publicity stunt.
I think that anything Trump does is going to have a minor impact on public perceptions compared to the widespread perception of Californians that the Democratic establishment in that state is incompetent.
That's fine I guess, but doesn't really have anything to do with the subject? What does that have to do with the water in Californian dams from earlier this week?
Specifically, what is Trump's incentive to take that action?
Trump launched a broadside against Newsom regarding the snail carter. This is him following up.
There is certainly a political element here. Never pass up an opportunity to kick your opponent when he's down.
They hate California as they see it as very liberal and woke.
The GOP controls the House right now because a bunch of CA districts flipped Republican in 2020.
I would also note that I think you could also make the argument that Trump won in 2024 because of California. The state GOP there picked up a lot of expertise in mail in balloting (which paid off in 2020) that was then disseminated in time for the big Republican push to embrace mail ballots in 2024.
Lack of irrigation water won't cause a breakdown in CA government services, it will cause crop failures in America's bread basket, which will make groceries more expensive, which will be bad for Republicans in coming elections.
Whether it causes crop failures depends on a host of other factors, not least of which is the local weather. If you can predict that you have my compliments.
Next, whether prices rise in aggregate is also dependent on many other factors. At the very least wage growth was supposed to finally catch up to inflation this year, which is a bit of good news for Trump.
Sure, it's possible that California will have an unusually wet spring and refill the reservoirs. It's not likely, though. And it's certain that without enough irrigation water crops will fail. The region does not get enough rain to make dry farming feasible.
Let's assume that crops are guaranteed to fail now. Why would any of these farmers be planting fields that they know they're never going to be able to harvest?
And if you are in charge of stocking supermarkets wouldn't you be looking at bringing in produce from other regions, possibly from outside of the country? And if you're a farmer in one of those other regions (or more likely a giant agribusiness) wouldn't you be looking at increasing yields to compensate for a shortfall from California?
The economy, and markets, are complicated things.
Yes, but it isn't just Fox News. All the news outlets carried the story, and the potential damage if tariff battles went global.
Even the non-Fox News low information types get to walk away with the impression that Trump is crazy like a fox.
The NY Times today buried this gem in 32nd paragraph :
"Economic research published last year found that Mr. Trump’s tariffs in his first term had not accomplished his stated aims of increasing manufacturing jobs, but that they had still benefited the president politically, by winning over voters for the Republican Party. "
(The research was linked via a Feb 2024 NY Times article to :
https://www.nber.org/system/files/working_papers/w32082/w32082.pdf)
Good catch. That NYT statement, in a nutshell, is my thesis here.
Cynical & naive. Proof will be in the numbers. In a case of Prisoners Dilemma, both can go tit-for-tat & be better off. They can see each others action & not necessarily defect
Cynical? Sure. As I said, most aren't cynical enough when it comes to Trump and because of that his actions are surprising to them. Personally, nothing Trump has done so far has been outside of my predictions--he is operating 100% for himself, which is consistent with every single action he has taken all of his life.
So, naive? I don't think so. I think it's those who say things like "Trump doesn't understand" or imagine he's playing some kind of 4-D chess game are the naive ones. There's simply no evidence that is the way he has ever operated, ever.
" We threatened tariffs, and because Trump’s threats are fairly credible for reasons ranging from his ideological commitments to his reputation as a rogue actor, Canada and Mexico capitulated."
And what was the capitualtion? Canada reannounced they are moving troops to the border? LOL.
Mexico announced it was, what? Doing nothing.
Definitely saw a lot of capitualtion there, Nate.
Could you be more specific?
I think Nate's point is that these capitulations are so minor that they aren't worth the very significant cost of alienating your allies.
But they weren’t minor capitulations; they were things that they had previously announced they were doing.
The whole thing was Trump theater. Maybe the whole thing was to fill headlines while Musk did what he did.
The "capitulations" in 2018 allowed Trump to drive illegal immigration levels into the cellar.
There’s almost no illegal immigration from Canada compared to Mexico. Even less if you subtract off illegals coming to Canada from the US.
In 2018 the deal Trump struck was with Mexico. I am curious as to why there is a sudden border focus on Canada. Terrorism maybe?
Seriously, where would that thought come from, curiously curious on that comment. Everything he mentioned in the tirade he had about the Canadian border was..... exaggerated (that fits) information
FWIW I have two theories:
1. The administration expects some increase in illicit activity at the Canadian border as security at the southern border is ramped up.
2. Trump is looking to slash the federal budget by as much as possible. If the Canadians ramp up border enforcement to the north that might mean that the US could decrease expenditures. In other words, Trump is looking to offload the costs of border enforcement with Canada onto the Canadians to save money.
Yup, "Capitulate" is entirely the wrong word.
Canada had already announced a $1.3 billion border plan and moved 8,500 (of the promised 10,000 personnel) to the border.
The only new "concessions" that Trump got from Canada were:
- Canada will appoint a "fentanyl czar" (?)
- Canada will spend $200 million on intelligence to fight fentanyl and crime.
Also, as the Washington Post noted:
"It’s worth emphasizing that the flow of fentanyl from Canada is a tiny percentage of the drug that’s seized at U.S. borders — about 0.2 percent. Border authorities seized about 43 pounds in 2024, compared with more than 21,000 pounds from the Mexican border."
The only significant result Trump achieved by placing tariffs on Canada is that he's managed to anger the US's longest-standing ally. That is consequential.
That $1.3 billion border plan and the troops were negotiated with Trump--before he even took office.
That wasn’t “negotiated” with Trump - that was just preemptive action taken by Canada.
https://www.facebook.com/watch/?v=1830065177801282
Also note that even in a comedy skit Trump's character points out that he can't levy tariffs (yet) because he's not the President.
https://www.upi.com/Top_News/World-News/2024/12/02/canada-bolster-border-security-Trump-meeting/3691733121957/
So... if he already "negotiated" that deal, why apply the tariffs?
What exactly did he "negotiate" over the past few days?
$200 million for a border intelligence initiative and a Canadian fentanyl czar.
I agree with Canada being "angry" in the TV show they are playing a role in, but they know their role is to... pretend to be angry so when the eventual deal is signed they will deliver to their trading partner the thing that partner wants the most, which is for their leader to *appear* to have made a great deal.
Trump doesn't care about the actual substance of these deals (because his voters don't care), and the people who do are deeply embedded in the lobbying process and nobody will ever know about them.
Canada, Mexico and China are going to win the *overall* substance of these deals for the sole reason that they care about that substance and the US does not The deal will be negotiated by industry lobbyists and they are going to do whatever they were going to do in any case, but insofar as there is a high-level strategic factor, the US will have a weaker hand.
It goes deeper than that – the Canadian *people* are angry.
We've loved the US: we vacation there, we shop there, we consume US media. We've sent our soldiers to support the US in almost every major military deployment (Afghanistan, Iraq, Syria, Korea, etc).
Canadians feel slapped in the face by a nation we thought was our friend. There is real, long-term damage to trust that's been done here.
yes... it has spurred a Country to start realizing there is more to the world that the country below the 49th parallel
8,500 is the existing number of Canada Border Services employees. These aren't new jobs. We have 1,200 ports of entry so this is about 7 per port. The expectation in Canada when the news came out was that these would be an additional 10,000. But it's already being watered down. I will be suprised if we get the additional 1,500.
It's not a major concession, but both Canada and Mexico eventually agreed to do something they didn't really want to do for essentially no consideration. Whether it's useful or effective is a different question.
If you didn't see it above, Canada had already announced this directive, so there was no concession.
There was no "win" to assess or weigh against the risk/loss.
It's safe to say this was a dumb play, without strategic value to the country. Nate should include that in his post.
Canada didn't "announce" a directive, Trudeau negotiated the border security plan with Trump in December after Trump's initial treats for tariffs.
Canada quite literally reannounced a December announcement. which you can easily google.
We can certainly give Trump credit for the December announcement if you see value in it without conflating it with the tariff announcement.
The point is that there was no "win" in announcing the tariffs in February for this already-offered "concession", no matter how you value the loss.
There's something like $200 million in additional border security in the most recent announcement as compared to December's. Trump was apparently intent on squeezing blood from a stone.
The S&P 500 is down $700B in value from 1/31 to today, so I'm not sure $200M in additional border security on the border we don't really care about (honestly there is probably more problems flowing from the U.S. into Canada than the reverse) was worth it.
Canada doesn't want fentanyl in North America any more than the US does!
That's what's insidious about this: the US and Canada want the same thing.
But 99% of the fentanyl doesn't come from Canada. It comes from Mexico, China, and domestic labs.
So, if Trump is trying to achieve an objective ("less fentanyl in the US") by putting tariffs on Canada, his method is achieving nothing of importance.
It may be a preemptive measure. If border security at the south tightens the natural response would be smugglers moving operations to try to find the weakest link.
If this was preemptive, why not *partner* with one of your greatest friends & allies to achieve this together?
Why use "a stick" (which you'd typically employ with an enemy) at all?
It's not like Canada was saying: "We don't want to be part of a united front against illegal immigration and drug trade."
Canada and the US have a long-standing history of collaboration to combat crime, drug trafficking, and illegal immigration: Operations Caribbe & DisrupTor, the Canada–United States Safe Third Country Agreement, etc...
This move by Trump makes no sense.
Canada has promised to commit a billion dollars and change. A lot of money to spend solving somebody else's problem.
I was looking at the US debt calculator, maybe an easier ask would have been "Hey Canada can you help us step up border security as we are in a bit of a financial crunch"
It got headlines - it was 100% effective in manipulating Trump's base and marginal supporters.
His base is thrilled!
Actually Canada agreed to do that back in December. Canadian here.
Canada first announced it would deal with the border issues when Trump first threatened tariffs way back in November or December. We wouldn't have done anything otherwise. Trudeau et al was happy with the status quo. Plus Trudeau had resigned. There was no incentive for him to do anything. Trump knew that. It was only when Trump said he was really going ahead and set a deadline that the other Liberal MPs saw their chances of ever getting elected again disappearing that Trudeau acted. It remains to be seen if anything actually happens or of this is just like the perennial promise that next year we really will meet our NATO commitment.
I think the other big difference is that a poker game is zero-sum. There's no way that you and the other players can work together to increase the overall amount of money on the table. (Well short of recruiting more players). But in international trade doing this stuff trades off against opportunities for positive sum interaction.
Trump doesn't believe in positive sum interactions.
If I'm being very charitable, even if he does believe in mutually beneficial relationships, he'll never publicly admit to it. He'll always frame it as the US is the one being ripped off.
Then he'll do a performance where he pretends to twist people's arms. It feeds into his base's victim complex & main character syndrome.
Donald Trump got far less from Mexico and Canada than people think. Joe Biden got similar concessions from Mexico when he came into office (and got Mexico to help him cut border crossings down again); this entire trade war is a farce and terrible diplomacy.
It's also highly illegal: we signed a treaty with Mexico and Canada to govern trade. There is a cost to the US breaking its word on a whim, not that Trump cares.
They "think" whatever Fox News tells them to think. These deals are far too complicated for any average person to *actually know*.
How then to explain the enormous levels of illegal immigration under Biden?
Yep, a game of chicken where Trump blinked first after the markets tanked in after-hours trading. He had to in order to re-stabilize. One thing to point out: while 20ish % of CAN GDP is on US exports, a decent chunk of that is oil and precious metals. The Trump tariffs did not touch those exports.
Trump was going to tariff Canadian oil at 10% and precious metals at 25%. But it's worth pointing out that there are other markets for those goods. Sure, it takes time to adjust and sell them overseas, but after a year of pain Canada will find other markets.
Yes it did, though one he realize the effect it would have on the US, those were hastily reduced to 10%. Noting that 25% of Gas in the US is derived from Canada delivered crude.
He said 10% on oil.
Trump postponed the tariffs after Mexico and Canada announced concessions.
Oh? Which concessions?
Mexico will deploy 10,000 of its National Guard to restrict immigration.
Canada is also deploying 1000's of troops to its border with the US.
There is a vast difference between this and a poker tournament. First of all, everyone sees everyone's cards. Second, this is an iterative game played with all the players at once over the years. Poker is a blind game, and while you could argue that some of the best players (or the local dads) play an iterative game, "tournament play" which you refer to, is the LEAST iterative poker type. Tables are being scrambled all the time!
All Trump is doing here is letting every country in the world know that he is full of s**t. He threatened our two most friendly trade partners with whom we have the most leverage and then IMMEDIATELY BACKED DOWN once he had a phone call with them. Anyone who we would seriously ever want to start a trade war with now has information about how Trump behaves at essentially no cost.
Your article argues that in a vacuum, what Trump could make some kind of sense. But we're not in a vacuum; everyone has now gotten needless information about how Trump plays.
Although the game theory here is interesting and the analysis data-driven, a simpler take is that both Canada and Mexico called trump's bluff, offering minor face-saving concessions only. Trump bluffs a lot, no?
It isn't a bluff - it is performance art.
Canada and Mexico are part of the set.
If it were a poker game, they would be the table.
A table that considers the Geneva Convention a Checklist.
I had to explain to a client why "Don't pick a fight with Canada" is the North American version of "Don't get involved in a Landwar in Asia"
You might as well explain that here too. Is the point that a checklist in the hands of a Canadian is a deadly weapon?
"Don't get involved in a land war in Asia" has unclear origins, but it is at least as much American as anywhere else. The Princess Bride line was delivered after the Korea and Vietnam wars.
To be clear I'm not saying Canada is inert. Just that in this specific situation Trump is picking on them to impress his US base.
Canadians have a habit of inventing war crimes and 'new and unique' ways of fighting.
Which is why they kicked our asses every time previously we've tried to invade them, why the Germans surrendered to us instead of them in World Wars,
And why the Geneva Convention is so long,
because of a long, LONG list of questionable actions during WW1 and WW2 that were defended in court with the phrase 'It wasn't a crime at the time'.
I've seen the same attitude in Business, War, and Hacking,
do not duck with the Canadians unless you are prepared for the backblast.
Hahaha.
Have a Molson's.
Not my scene, I'm more of a Bold Rock Cider type.
Trump blackmailed Mexico into doing border enforcement for the US during his first term. This is just a return to that status quo.
I think it's wrong to say that Canada and Mexico would be "irrational" to retaliate. It’s true that a drawn-out trade war would cause deep recessions in those countries. But within the short-to-medium term they could redirect their trade to other countries, particularly China. In fact, part of the reason China isn't already a larger trade partner for these countries is that the US has previously used its leverage to limit Chinese involvement in Canada and Mexico.
Tariffs would have probably put Mexico into recession.
We are fully back to Pundit Nate, apparently. Well, following the blog was interesting over the election at least.
My husband pointed out that instead of being like a poker tournament, international trade is more like a home table game. We're basically the friend who's been using their employee discount to get cheaper pizza for these games, but now we've started to play like a jerk. Our friends are now in the position of trying to figure out how to kick us out of the game, because they don't want to deal with the bullying anymore. They may have to pay more for pizza, or eat fewer snacks, or invite a couple more guys to the game to replace our contribution, but any of those options will be worth it if poker night becomes fun again because the bully is gone. Alternatively, we could go back to playing nicely and everyone would be better off.
Damage has already been done. Canadians are boycotting US products. Not all Canadians—not me but quite a few.
Or they could just surrender, which is apparently what Mexico and Canada have done.
The US is the world's largest economy. Finding a replacement isn't as simple as it seems.
They might "surrender" this time (I put it in quotes because it sure seems like they said they were capitulating without actually making any concessions), but if Trump keeps trying this, they are going to try to figure out how to kick us out. We're not easy to replace, but my point is that international trade is like an ongoing social game. You might put up with a bully who brings cheap pizza for a few weeks in the hopes that they'll see the light and stop being a jerk, but eventually they'll look into how to live without them.
Are you going to go with the guy who buys $1000 of your stuff a week or $100? It's that simple.
As for Mexico and Canada they have agreed to take over a large part of border enforcement from the US. How is that not a major concession?
Not true. The US has not handed anything over. Each country monitors their side of the border.
If Mexico makes transit through the country impossible for migrants that takes a significant load off of the US.
https://nypost.com/2024/01/18/opinion/has-biden-bribed-mexico-to-control-border-and-help-him-win-election/
"They’ll be held back to wait for a molasses-slow bureaucracy to approve individual travel papers."
Pretty evil.
But these are both things they agred to back in December. They just reiterated exactly what they were planning on doing.
Usually, you'll go with the guy who buys $1000 of your stuff, but if they're enough of a jerk, you will try to find ways to stop needing his money. If you're a freelancer and you get $1000 of business from one guy but he's a huge PITA to deal with, you're going to start re-jiggering your business so you can fire him as a client. If he's currently 25% of your business, it's unlikely you can do it immediately. But are you going to start looking harder for clients who can make up for that business? Absolutely. You might even decide that getting 3 new clients who can do 7% each and take a 4% pay cut is worth not having to deal with the jerk's antics.
Replacing the US isn't doable. It has no peers economically. In a few decades? Maybe. Do Canada and Mexico want to wait that long?
Replacing entirely is difficult, but they're already taking steps to make themselves less reliant on us: https://slate.com/technology/2025/02/trump-tariffs-mexico-canada-china-paris-climate-agreement-world-health-organization.html
Trump negotiate _some_ of the details with Trudeau in December. The most recent announcement includes new spending. And this is the first public announcement from Mexico.
great analogy
Regardless of what actual any real accomplishment Trump's actions here produced, this is playing great with the base. Perhaps that's all Trump wanted, something he could call a win and for people that might not wish to look hard will believe it so. A performative effort and Trumps not the only politician doing it although he seems to be a master of it.
100% wrong.
There is no point in doing a game theory analysis is you can't even identify the players.
The audience for this is the American public, specifically the low information voters who believe Trump knows something about deal making.
Tariff threats get headlines.
Chest thumping about immigration and fentanyl doom fantasies gets headlines.
Announcing agreements to avoid tariffs gets headlines, and lets low information voters believe that something major had happened.
Trump has known for decades how to manipulate the press to cultivate his image.
I have to imagine another negative consequence of this stunt will be that both Mexico and Canada (and any business/angry local citizen with the means?) will look for opportunities to reduce their exposure to this threat. i.e. diversifying import and export markets -- none of which will improve the trade deficits Trump claims to care about so much.
This is correct -- and of course it's obvious that tariffs on Canadian and Mexican goods (especially if there is no retaliation, as Trump demanded) will increase the trade deficit as well!
Trump threatened tariffs on Mexico and Canada because those countries are obviously the largest source of illegal immigrants and drugs into the United States. Trump stated that this was not a trade war but a demand they help with those two issues.
Canada has agreed to list drug cartels as terrorist groups. Mexico no longer sits idly by as caravans of thousands of people cross its territory with the express intention of entering the US illegally. Colombia now accepts repatriation flights. Progress!
43 pounds (19.5 kg) of Fentanyl from Canada
Or why was Cocaine not targeted?
Illegal immigration (1.5% from Canada)
I'd ask how much arrives from overseas?
Since Canada is apparently going to be making a major investment to secure the border the argument is since they're paying for it, why not?
They have to meet Trump’s stupid requests.
It could also be a preemptive measure. If border security to the south tightens up you would expect criminals and smugglers to try to shift operations.
Hello Ports on the East and West coast we are welcoming you with open arms!
Yeah, but there cargo has to be moved via shipping and smuggling is probably more difficult
There’s almost no illegal migration from Canada. I’ve looked the figures up and I’m sick of arguing with MAGA fanatics.
We need FBI to fight drug activity at home, but with the recent unfair and illegal firings, I wouldn't apply to work for the FBI if I were Supercop.
Definitely.
Because the local DC police couldn't even solve the case of a cocaine bag in a restricted area of the White House. FBI might have done better.
"almost no illegal immigration" means in comparison to the southern border disaster. Not compared to earlier times along the Canadian border.
https://www.cbc.ca/news/politics/illegal-migration-canada-united-states-1.7320623
Read the article. 20k people.
Get a grip.
20K people vs 7.6K the previous year
Read the article and get a clue.
OMG - one large hockey stadium worth. Where will we ever fit them?
Like Frau Katze said - "almost no illegal migration from Canada".
You might check the number of people move without proper paperwork into Canada.
“Where will we ever fit them?”
You could put them up in hotels in NYC, overlooking the homeless vets sleeping on the sidewalks.
The DNC says that's an election winning strategy.
I bet the drug cartels are quaking in their boots.
It is game over for them now that Dudley Do-Right is on the job.
IRGC General Qassem Soleimani felt the same way.
Until the blond dude in the Oval Office vaporized him and his Iraqi side-kick Abu Mahdi al-Muhandis.
They seem to have stopped laughing at the IRGC.
And that has EXACTLY WHAT to do with Canada's tariff negotiation concessions?
Try to keep on the topic - you were the one who brought it up.
The topic was the drug cartels and terrorist groups as you mentioned in your original note.
The only "concession" was that neither side will impose tariffs in the short term, which benefits Canada because it has less economic resilience than the US in a trade war
(Just have to love how mentioning a vaporized IRGC General gets the all-caps hysterics out!)
Focus Focus Focus.
You : "Canada has agreed to list drug cartels as terrorist groups".
Even capital letters seem to confuse you.
Again - what does US action against Iran have to do with Canada's concession?
You laughed that drug cartels were shaking in their boots at being designated terrorist groups.
I pointed out a specific consequence of that designation in the past to show it's no laughing matter.
Canada conceded to designating drug cartels as terrorist groups.
Still having difficulty extracting conclusions from one case to apply them in a similar one? Not good.
Are we certain that Mexico just sat idly by? I'm not saying they can't do more, but sitting idly by? Also, I think time will tell whether listing cartels as terrorist groups is effective. Maybe, but so much of this feels performative to me. At the end of the day, I don't understand the notion that Canada, Mexico, or anyone else can fight the "War on Drugs" any better than the US can.
Yup, we're pretty certain Mexico was standing by because we saw caravans of thousands passing by in broad daylight on their way to the US border, watched by journalists and police all along the way.
Listing drug cartels as terrorist groups allows all the anti terrorist tools to be used against them, including targeted assassinations. Mexico's long history of single party rule under the PRI leaves it well acquainted with those.
Okay, and, uh, what do you think we should do about drug trade operatives within the United States?
In the United States the government is obviously constrained by the due process clause of the Fifth Amendment.
But now it has additional tools with noncitizens outside the US. Good progress for two weeks worth of work.
Taiwan is the next target in the tariff spectacle—this time with threats of 100% tariffs on semiconductors, an even more critical resource than Canada’s oil and minerals.
The tariffs will be postponed for a month—just long enough for Taipei 101 to be temporarily renamed Trump 101. Rinse and repeat.
https://www.reuters.com/markets/asia/taiwan-help-companies-relocate-us-following-trump-tariffs-2025-02-03/
As others have pointed out w/r/t Canada and Mexico, this is more play-acting by Taiwan -- announcing activities they were already doing, but saying that it's a response to Trump's tariff threats. This way they can allow Trump to say he got this "concession" from them without having to actually talk to him.
The real reason Taiwan has been investing in bringing production to the United States has to do with the trend for more American firms to look closer to home for production resulting from the various supply chain disruptions they encountered in 2021 and 2022 as well as ongoing tensions between the United States and China (which have obviously been escalating since well before Trump took office in 2017).
Regarding Taiwan and semiconductors specifically, there is the ongoing threat that China will physically threaten Taiwan's autonomy, which would of course result in a huge disruption to the flow of semiconductors. Additionally, the CHIPS Act, which Biden signed into law, allocates billions in direct support from the federal government for firms to build semiconductor production in the United States, which has been happening now for a few years.
Another announcement made to give the appearance that Trump is being effective.
https://apnews.com/article/trump-usaid-layoffs-7e0a159d8a419c4c9388ab02e8259f23
https://www.google.com/amp/s/www.nbcnews.com/news/amp/rcna189390