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Endorsed by steelworkers onstage, then-Republican presidential nominee Donald Trump puts on a hard hat during his Make America Great Again Rally in Latrobe, Pennsylvania, on Oct. 19, 2024.
Trump tariffs steel and aluminum at 25%
US President Donald Trump signed an executive order Monday imposing 25% tariffs on all steel and aluminum imports to the US. This raises the tariff rate on aluminum to 25% from the previous 10% that Trump imposed in 2018, and it reinstates a 25% tariff on “millions of tons” of steel and aluminum imports previously exempted or excluded.
“Today I’m simplifying our tariffs on steel and aluminum,” Trump stated. “It’s 25% without exceptions or exemptions.”
Cue the negotiations. On Monday, Trump reportedly took a call from Australian Prime Minister Anthony Albanese, who is seeking a carve-out for Australian steel exports. Albanese described their conversation as “constructive and warm” but did not want to “speak on [Trump’s] behalf.”
European nations said they would discuss retaliatory measures. Canada, which is the US’ biggest source of aluminum and one of its top sources of steel, had already promised to impose retaliatory tariffs, which it withdrew on Feb. 3. Mexican President Claudia Sheinbaum, who did the same, said her country would keep a “cool head” in anticipation of Trump’s announcement.
It is not yet clear when the new tariffs will take effect. Trump added that he will also consider additional tariffs on cars, pharmaceuticals, and computer chips.
Why now? Trump’s announcement came two days after the visit of Japanese Prime Minister Shigeru Ishiba, who announced that Japan would increase its US investment to $1 trillion, including a commitment from Nippon Steel to “invest heavily” in US Steel, after a $15 billion buyout was nixed last year by the Biden administration. The deal is another reflection of Trump’s plan to strengthen domestic steel production and make imports less attractive – or even necessary.
Was there a connection? “It’s certainly possible,” says Eurasia Group’s Japan Director David Boling. “But we knew steel tariffs were coming — it was only a matter of time. While Trump is proud to be Tariff Man, he could also be called the Man of Steel. Steel is his favorite industry.” We’re waiting to see whether Ishiba picks up the phone like Albanese and leverages Nippon’s investment to lift the levies.The end of US soft power?
The world’s wake-up call came at 3 a.m.
In the early darkness on Saturday, Feb. 1, USAID was suddenly shut down. “This site can’t be reached,” read its homepage. The end of the great age of American soft power began.
It was shocking, but not surprising. When Elon Musk pulled the rip cord of his verbal chainsaw and declared that USAID was a $40 billion “criminal organization” that “must die,” the deep-cut result was inevitable. President Donald Trump agreed, saying the organization was run “by a bunch of lunatics.”
Today, the website message is more stark. “On Friday, February 7, 2025, at 11:59 p.m. (EST) all USAID direct hire personnel will be placed on administrative leave globally, with the exception of designated personnel responsible for mission-critical functions, core leadership and specially designated programs.”
The remnants of USAID will be rolled into the State Department.
Is this really the end of American soft power and, if so, how should allies respond?
Created by President John F. Kennedy back in 1961, USAID was meant to be the bicep in America’s muscular arm of diplomatic power. According to the Congressional Research Service, USAID “provides assistance to strategically important countries and countries in conflict; leads US efforts to alleviate poverty, disease, and humanitarian need; and assists US commercial interests by supporting developing countries’ economic growth and building countries’ capacity to participate in world trade.”
It was a broad mandate covering over 131 countries and hundreds of programs.
What did they do? At its best, USAID helped fight deadly diseases through programs such as the Malaria Council in Uganda, or the President’s Emergency Plan for AIDS Relief. It supported NGOs working to stop the spread of Ebola and Marburg virus and to feed hungry people in Sudan.
The hyperpolarized culture wars rang the death knell of proportionality long ago, so when Musk dismissed the entire agency as “a radical left political psy ops” program, it fit the moment. Everything is now either the worst or the best. The middle ground is gone. But for all that, the facts remain and they are worth mentioning.
For example, the White House currently has a website up outlining its claims of waste and abuse at USAID, chronicling things like $70,000 for a DEI musical in Ireland and $32,000 for a “transgender comic book in Peru.” Those are making headlines in the culture war media. There will be other examples of programs the current administration chooses not to fund or accuses of corruption, but how many?
Turns out, the website only gives concrete examples of about $12 million worth of programs they don’t like, along with allegations but no data on “hundreds of millions” of others. Of USAID’s annual budget of $40 billion, that adds up to less than 2%. Is the best answer to a broken toe the complete amputation of a leg? Apparently so.
USAID was an important instrument of what Joseph Nye called “soft power,” achieving national security and goals through attraction, not coercion. “When you can get others to admire your ideals and to want what you want, you do not have to spend as much on sticks and carrots to move them in your direction,” Nye wrote in “Soft Power: The Means to Success in World Politics” back in 2004.
USAID was just that, projecting the ideals of the US in places where chaos, poverty, and insecurity are fertile grounds for malevolent forces that endanger the United States. It did this by supporting multilateral institutions, such as the World Health Organization and the Paris Climate Agreement. Soft power is a form of security and is supposed to work in conjunction with hard power. But if you think the cost of soft power is high, try the costs of hard power. Americans know that all too well from experiences in Iraq and Afghanistan.
What is striking about all this is that the Trump administration is not just trying to recalibrate US soft power to promote its own agenda. If that were the case, they would simply reform USAID, not kill it. This is radically different. What is now clear is that the Trump administration doesn’t believe in the value of soft power at all. It simply has no use in their political playbook.
There are no countries happier with the retreat of US soft power than China and Russia. Their influence in developing countries will now grow dramatically. Democracies are in retreat all over the world, as the Freedom House map shows, and the sunset of US soft power will make it worse.
But this is not the only example of the twilight of US soft power. The threat of 25% percent tariffs on allies like Canada is another. There is no closer ally to the US than Canada, with a shared border, a free trade deal, and deeply connected cultures. The tariff threat suddenly upended that, leading to scenes I have never witnessed in my lifetime, such as Canadians booing the American national anthem at hockey games.
The northern sense of confusion and betrayal is being amplified by the election cycles in Canada, with politicians now stoking a patriotism that comes at the expense of affection for the US. It is not a good trend but in context, completely understandable.
At this moment, the ubiquitous soft power of American culture has gone from inspiring to infuriating, the American beacon of freedom is now fried up into Canadian bacon. It will take a long time to reestablish trust between the friendliest of all neighbo(u)rs.
Let’s not overstate things. US soft power is not gone; it’s just diminished. American culture, innovation, and institutions remain resilient to challenges and attractive to billions of people. And for all the talk of diversifying trade, Canada will be economically tied to the US forever. There is simply no escaping geography.
But the end of the golden age of American soft power means that hard power options — militarily and economically – are now the most prominent tools on the table. Trump’s repeated claim that Canada should become the 51st state while threatening to economically destroy the country has gone from a bad joke to an ominous warning. How to respond?
As the US abandons its soft power strategy, its allies are having to develop their own versions of it to avoid punishment. Taking on Trump in a hard power fight is, after all, a lose-lose. A trade war may hurt the US, but it would hurt Canada much more.
The strategy now is to use soft power levers to try to convince the US president that what Washington wants, Ottawa wants too, without giving up too much in the process. So spending $1.3 billion at the border to stop illegal immigration and fentanyl is money well spent if it can help stave off tariffs that would likely push Canada into a recession. Of course, the tariffs aren't solely in response to fentanyl and immigration, but those are low-hanging fruit and, so far, addressing those issues has worked.
Then what? What are the rules of soft power in dealing with President Trump? Don’t celebrate and gloat over a win. Stay cool when threats don’t materialize. Don’t make it personal because with the president the personal is political. This is not a strategy of appeasement but simply using carrots, not sticks. To twist an old David Frost saying, soft power is the art of letting someone else have your way.Graphic Truth: Canadian national pride rebounds
Since taking office, Donald Trump has repeatedly threatened the US’s closest ally, Canada, with high tariffs and statehood, sparking a surge of national pride among Canadians. The tension has manifested in symbolic acts of resistance: coffee shops renaming Americanos to “Canadianos” and premiers threatening to ban American products. New polling shows that this defiance isn’t anecdotal.
An Angus Reid poll conducted over the weekend reveals a dramatic shift in Canadian patriotism. Strong patriotic feelings increased from 49% to 59% in just one month. Canadian pride is up 12 points in British Columbia, 13 points in Quebec, nine points in Ontario, and a whopping 15 points in Atlantic Canada. The prairie provinces saw more modest increases, with Alberta up three points and Saskatchewan up four points, while Manitoba experienced a slight decline.
Despite a last-minute deal to delay 25% tariffs, the threat deeply unsettled Canadians. Given the US’s status as Canada's largest trading partner, potential tariffs could trigger a recession and imperil thousands of jobs. Accordingly, perhaps the poll’s most striking finding was that 91% of Canadians now want to reduce dependence on the US, prioritizing national economic independence over reconciliation.
Mexico's President Claudia Sheinbaum holds a press conference in Mexico City, Mexico February 3, 2025.
Trump strikes last-minute tariff deal with Mexico and Canada – but not China
With hours to spare, President Donald Trump hit pause on a North American trade war, reaching agreements with both Mexico and Canada to delay the imposition of 25% tariffs that had businesses and markets sweating.
The deals, brokered after multiple calls with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, postpone the application of tariffs by 30 days while both countries work to secure their borders with the United States. Mexico agreed to deploy 10,000 troops to curb drug smuggling and illegal immigration, while Canada appointed a fentanyl czar and committed to a Canada-US Joint Strike Force targeting drug trafficking and organized crime.
There was no movement, however, with Beijing. Ten percent tariffs on Chinese imports took effect at 12.01 a.m. on Tuesday, prompting China to hit back with additional tariffs (both countries already had some tariffs in place) on liquefied natural gas, coal, farm machinery, and various other US products. Beijing also imposed new export restrictions and launched an antitrust investigation into Google. Earlier, Beijing said it would challenge the tariffs before the World Trade Organization.
Trump has also warned that tariffs on the EU are coming, prompting UK Prime Minister Keir Starmer to insist that Britain won’t pick sides between the US and the EU, despite his push for closer relations with the continent.
While Mexican and Canadian businesses and consumers breathe a sigh of relief, Trump’s hardball negotiation tactics may negatively impact relations with both countries, particularly Canada, in the longer term. Canadian leaders have said they will actively pursue trade deals with other partners, there has been speculation about Canada joining the EU, and there remains uncertainty about whether the United States remains a trusted ally after Trump forcefully repeated his hope that Canada would become the 51st state – just an hour before his final conversation with Trudeau.
Canada's Prime Minister Justin Trudeau is joined by Finance Minister Dominic LeBlanc, Minister of Foreign Affairs Melanie Joly, and Minister of Public Safety David McGuinty, as he responds to President Donald Trump's orders to impose 25% tariffs on Canadian imports, in Ottawa, Ontario, on Feb. 1, 2025.
Trump ignites trade war. Will there be a legal response?
On Saturday, US President Donald Trump signed an executive order applying 25% tariffs on all Canadian and Mexican imports, excluding Canadian energy, which will be tariffed at 10%. The order, which takes effect on Tuesday, also imposes a 10% tariff on all Chinese imports. Trump threatened to escalate tariffs further if any of the countries retaliated, which Mexico and Canada have already done.
Canada will apply 25% tariffs on $155 billion of American goods, from orange juice to appliances to car parts, phased in over three weeks. Ottawa will also consider nontariff measures relating to energy and procurement, and provincial liquor monopolies areremoving American alcohol from their shelves. Mexican President Claudia Sheinbaum also retaliated with “tariff and non-tariff measures in defense of Mexico's interests,” without specifying the rate.
China has responded with plans to implement “countermeasures” and called Trump’s tariffs a “serious violation” of international trade rules, which it will contest before the World Trade Organization.
On what basis did Trump issue the order? Trump expanded the scope of the national emergency he declared on Jan. 20 at the southern border of the United States, due to “the sustained influx of illicit opioids and other drugs” that is “endangering lives and putting a severe strain on our healthcare system, public services, and communities.” It now covers both Canada and China, which he accuses of not doing enough to combat fentanyl production, money laundering, drug gangs, and transnational crime.
Could legal challenges derail Trump’s tariffs? To declare this emergency, Trump invoked the US International Emergency Economic Powers Act, or IEEPA, the National Emergencies Act, or NEA, as well as sections 604 of the Trade Act of 1974 and section 301 of Title 3, United States Code.
But the IEEPA hasnever been used to justify tariffs. It allows for the imposition of sanctions, suchas those imposed by the Biden administration against Russia, which can be invoked immediately. Trump chose the IEEPA because it allowed him to bypass the lengthy investigations and consultations required by other trade laws he invoked during his first term.
It also allows him to claim the tariffs are legal under World Trade Organization rules, as the General Agreement on Tariffs and Trade’s Article XXI designates a national security exception. President Richard Nixon similarly invoked the Trading with the Enemy Act to impose 10% tariffs after the US quit the gold standard in 1971 to stave off a balance-of-payments crisis.
This may not bode well for a challenge by China before the WTO. But if American courts rule against Trump on his use of the IEEPA, his emergency declaration could be considered invalid, opening the door to penalties under global trade rules.
Finally, there’s the USMCA. A Congressional analysis found that tariffs would violate the tripartite treaty, but with Trump already threatening to withdraw from the agreement, it would appear he does not care. Trump said on Truth Social on Sunday that Americans will feel “SOME PAIN” but that “IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”
We’ll be watching to see who might challenge the US president in court – and whether they succeed. Meanwhile, the markets were taking a hit as of early Monday with stock futures lower and the dollar and oil rising.
Former Bank of Canada and Bank of England Governor Mark Carney announcing his bid to replace Prime Minister Justin Trudeau as leader of the ruling Liberal Party, in Edmonton, Alberta, Canada, on Jan. 16, 2025.
Carney, Trump, and Trudeau shape Canadian political shift
Is federal public opinion changing in Canada? Several recent polls show a resurgence for the Liberal Party, paralleled by a decline in Conservative support. For the past year, the Conservatives have led with double-digit margins, most recently as high as 25% just a month ago. But this advantage has steadily diminished, with the latest EKOS survey showing the gap narrowing to a mere three points as of late January.
In addition to EKOS, Leger’s January 2025 survey shows the Conservative lead shrinking to 18 points, with the Liberals gaining four percentage points since the last measurement. Similarly, Abacus Data reports a decrease in the Conservative lead, now standing at 21 points, reflecting a three-point drop for the Conservatives and a two-point rise for the Liberals. An aggregation of public opinion surveys still shows the Conservatives forming a majority government, however, but with slightly fewer seats than last month.
What’s behind the shift? Both Trudeau and Trump. Polls started moving after unpopular Prime Minister Justin Trudeau resigned in early January, and after President Donald Trump took office and threatened to impose 25% tariffs on Canadians and make Canada the 51st state. Additionally, the entry of former Bank of Canada and Bank of England Governor Mark Carney into the Liberal leadership race has upped the party’s appeal: Polls show he is the best positioned of the candidates to expand the party’s voter pool, as Canadians look for a “Captain Canada” to stand up for their country and cure its economic malaise.
US Secretary of Defense Pete Hegseth arrives for his first official day at the Pentagon in Arlington, on Jan. 27, 2025.
HARD NUMBERS: Trump looks to lasers, US economy grows, Americans cool on Canadian annexation idea, Canadian researchers feel the freeze
60: The US is going back to the future with Donald Trump’s call this week to develop a system of space lasers to protect the country from nuclear attack. Under the “Iron Dome for America” plan, Trump has given Defense Secretary Pete Hegseth 60 days to develop a plan, which is to include the use of defensive space lasers – a revival of former US President Ronald Reagan’s vision of Star Wars.
2.3: The US economy showed strong growth at the end of 2024, expanding by 2.3% in the last quarter of the year. For the full year, the world’s largest economy grew 2.5%, exceeding most expert’s expectations. China, the world’s second-largest economy, grew at an official rate of 5%, though experts dispute those statistics. US President Donald Trump has promised a “golden age” for the US, but the economic impact of his proposed tariffs and massive federal budget/staffing cuts remains unclear.
16: Good news for Canada – only 16% of Americans support Donald Trump’s suggestion of annexing Canada, according to an exclusive poll by Echelon Polling, commissioned by GZERO Media. Meanwhile, 23% of respondents supported retaking control of the Panama Canal and acquiring Greenland.
40 million: The whiplashing moves of theTrump administration regarding federal funding for healthcare research (apparently frozen for review until at least Feb. 1) alongside a broader freeze on all federal grants, which was then rescinded, have rippled far and wide. Canadian researchers, who received more than US$40 million in support from the US, are now mired in uncertainty about the future of their work.
Trump renames EVERYTHING
The Gulf of Mexico is now the Gulf of America -- but Trump isn't stopping there. And there's one key world leader who has suddenly figured out how to take advantage of Trump's mass rebranding agenda... #PUPPETREGIME
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