Trending Now
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
President Donald Trump addresses a joint session of Congress at the US Capitol on March 4, 2025.
Is the Trump revolution off to a good or bad start?
Does Donald Trump’s revolutionary start make the grade?
On Tuesday, America once again celebrated the great presidential tradition called “marking your own homework,” also known as the Joint Session of Congress address. You didn’t need to sit through all 99 minutes of Trump’s peroration to know that he gave himself an A++ on his first six weeks in office.
“We have accomplished more in 43 days than most administrations accomplished in four years, or eight years, and we are just getting started,” Trump said, causing half the room to explode in applause while the other side sat and waved little paper signs of protest.
The thundering braggadocio of the speech came across with all the subtlety of a revving Harley-Davidson on the Vegas Strip, but give Trump this: He promised radical change, and he has overdelivered. Bigly. Too many politicians promise roses and deliver thorns.
Trump is doing what he has always done: go over the top. His biggest win so far has been the southern border, where his policies have brought illegal migration to a crashing halt. Democrats blew that issue and paid the price. With over 100 executive orders and 400 executive actions, public brawls with world leaders, a pivot into the open claws of Vladimir Putin, and the daily grumblings of his imperialist appetite for land expansion, the transition to Trump has been a transformation of Washington. 1600 Pennsylvania Avenue looks more like Fury Road in the “Mad Max” series, complete with a chain-saw-wielding sidekick.
Democrats look helpless, trying to choke down one half-digested policy—cancel USAID, cut off US intelligence to Ukraine, buy Gaza — as another one is jammed down their throats. You could give their entire party a political Heimlich maneuver, and they still wouldn’t be able to catch their breath.
Trump’s Deal Chaos
The rapid-fire, jump-cut scenes of Trump interventions — 25% tariffs on everything from Canada … except energy … and wait … not on cars for a month … or agriculture … or now … BREAKING NEWS today with Trump suspending tariffs for Mexico and Canada on anything that falls under the USMCA, but only until April 2 — might as well come with those photosensitivity warnings you see before shows that include flashing lights: Ladies and gentlemen, the barrage of conflicting policy announcements may cause Democratic seizures.
One thing is certain: The volatility is causing seizures in the markets, which are whipsawing up and down.
But if Trump gets to grade himself, maybe it’s time for a more objective report card. Let’s use two criteria: Trump as a dealmaker and Trump as a manager.
The Platonic ideal of Trump, taken from his ghostwritten book, “The Art of the Deal,” is that he is the greatest dealmaker in history. Want to end the war in Ukraine? Easy-peasy. That should take 24 hours. Well, that deal, whatever it was supposed to be, never materialized.
Trump is now trying to hustle a mineral deal out of Ukraine by shaking down President Volodymyr Zelensky in public, falsely claiming that Ukraine started the war and that Zelensky is the dictator. Trump says that he and his pal Vladimir Putin (“We had to go through the Russian hoax together”) are trying to pin Zelensky down for peace. The president claims the US has given $300 billion in aid to Ukraine, when it is actually $175 billion—and much of that going to US companies. Still, he’s demanding a $500 billion rare earth mineral deal as compensation and the key to a peace deal. “And they shall beat their swords into … Promethium, and their spears into Scandium,” to twist the old biblical saying.
In any case, that deal also fell through after he and Vice President JD Vance berated Zelensky in a stunning public press conference last Friday in the Oval Office. But it is the substance of the deal, not just the politics, that is also in question. Does Ukraine really have rare earth materials that could be worth that kind of money? Is there really a big prize here? Not according to expert Javier Blas, who wrote in Bloomberg that “Ukraine has no significant rare earth deposits other than small scandium mines.” He points out that the US Geological Survey also doesn’t confirm that Ukraine has any rare earth reserves. “Simply put, ‘follow the money’ doesn’t work here,” Blas writes. “At best, the value of all the world’s rare earth production rounds to $15 billion a year … That’s equal to the value of just two days of global oil output. Even if Ukraine had gigantic deposits, they wouldn’t be that valuable in geo-economic terms.”
So, even if Trump gets the mineral deal, what’s it worth? It is a political win at best, but at the expense of ditching US allies in Europe, letting down Ukraine, and handing Putin a massive victory.
Is that a good deal?
Trump’s Tariff-ization
What about tariffs? So far, the tariffs on Canada, Mexico, and China have proven to be an economic downer, and now Trump is rolling them back, fudging, and shifting as the trade war escalates. States like Kentucky that export to Canada are getting hurt. Prices are going up. The premier of Ontario is threatening to put 25% tariffs on electricity exports to three northern US states. Is this the deal people wanted?
And even if tariffs do bring back some US jobs in the long run, which is very possible, Trump has made the United States an unreliable trading and security partner. Who wants to sign a trade deal with him now, knowing he could rip it up or change his mind at any moment? What company wants to invest in long-term deals if there is no promise of stability? Do NATO countries still trust that the US would be a backstop? A deal today is gone tomorrow.
Perhaps this is all just the grinding gears of change. It’s only been 45 days, after all. Maybe the radical surgery Trump and Elon Musk are performing on the sclerotic body of the US government is needed and will make things more efficient. But so far, that has not been the case.
For now, inflation is back up, prices are up, allies are fleeing, and the markets are down. And this is just the start. It could get worse.
All this got me thinking about Clayton Christensen, the great thinker I had the chance to interview years ago. Back in 1997, he wrote the seminal book “The Innovator’s Dilemma” about how disruption happens, but he may just as well have been writing about what Trump and Musk are doing domestically and internationally today.
“Many think of management as cutting deals and laying people off and hiring people and buying and selling companies,” Christensen wrote. “That’s not management, that's dealmaking. Management is the opportunity to help people become better people. Practiced that way, it’s a magnificent profession.”
By that measure, we are clearly in the dealmaking phase of the Trump presidency. And the marks on that, so far, are not good. His big win on illegal immigration and Musk’s hacksawing of government must be measured against the chaos around the economy, the tanking markets, and the rise in inflation. Trump’s foreign policy deals have been a calamity for US allies, from the abandonment of Ukraine, the alienation of the EU, and the threats to and tariffs on Canada and Mexico, not to mention the pitch to take over Gaza. Russia is the big winner so far, so if that’s on the scorecard, you get the Cyrillic version of an A. Otlichnyy!
As far as grading the management of the United States? Helping people become better people? The report card on the magnificent profession reads: More work needs to be done. Fast.
President Donald Trump talks with Canada's Prime Minister Justin Trudeau during a North Atlantic Treaty Organization Plenary Session at the NATO summit in Watford, Britain, in December 2019.
Mexico, Canada get tariff reprieve
On Thursday, US President Donald Trump announced a one-month tariff reprieve on all Mexican and Canadian goods governed by the USMCA, as well as potash,until reciprocal tariffs are imposed worldwide on April 2.Canada supplies 80% of US potash, a critical component of fertilizer. The decrees follow Wednesday’s one-month tariff reprieve for America’s Big 3 automakers: Stellantis, Ford, and General Motors.
What will be tariff-free? According to senior administration officials, 50% of goods entering the US from Mexico and 38% of goods from Canada would qualify. Some Canadian energy products will still be subject to a 10% tariff, and some Mexican products, like computers, will still face a 25% tariff.
How have Canada and Mexico responded? Mexican President Claudia Sheinbaum had not imposed tariffs but was set to announce them Sunday if no deal was reached.
Canada’s initial set of tariffs on $30 billion in American goods imposed on Tuesday will remain. A second wave of $150 billion set to take effect after 20 days has reportedly been suspended until April. Ontario Premier Doug Ford also said that Canada would be imposing a 25% tariff on electricity exports starting Monday, regardless of whether tariffs would be lifted. Canadian provinces have also removed US-made alcohol from store shelves and barred American firms from procurement contracts, and there is no sign that this measure will be reversed.
Why did Trump change course? Trump said “I wasn’t even looking at the market” but major stock indexes plummeted this week, as investors were spooked by the uncertainty. In the Oval Office, Trump said “This is about companies and countries that have been ripping off our country and they won’t be ripping off our country anymore.”
Trump’s reprieve on Mexico specifically mentioned actions taken to stem the flow of illegal aliens and fentanyl into the US. This contrasts with his conversation Wednesday with Canadian Prime Minister Justin Trudeau in which Trump claimed Canada’s efforts on fentanylwere insufficient to drop US tariffs.
But the US president has citedother reasons for tariffs on Canada, including accusing the country of not allowing US banks to operate there and falsely claiming that the US “subsidizes” Canada to the tune of $200 billion a year. Commerce Secretary Howard Lutnick alsoaccused Canada of having a “national tariff” on US products because it has a 5-15% federal-provincial sales tax.Graphic Truth: Who’s most vulnerable in the North American trade war?
This week, Donald Trump fired the opening shots in a new North American trade war, slapping 25% tariffs on Mexico and Canada, America’s top two trade partners.
Both countries responded in kind, but by the numbers at least, the US has significantly more leverage in this showdown. That’s because the economies of Canada and Mexico are vastly more dependent on exports to the US than the US is on exports in the other direction.
Here is a look at that dependency, measured by looking at how much of Mexican and Canadian GDP comes directly from exports to the US, and vice versa.
The caveat: These are national-level numbers. At the state level, the picture changes a bit, with the economies of some individual US states way more dependent on Mexican or Canadian trade than the country as a whole is.
North Dakota, for example, derives about 10% of its GDP from exports to Canada alone. Michigan’s exports to Mexico and Canada combined account for 6% of its economy. New Mexico sends 70% of its exports to “old” Mexico.
We’ll look at that in more detail in an upcoming Graphic Truth. For now, here’s the (lopsided) picture at the national level.
Trump grants some tariff relief – but it’s temporary
US President Donald Trump gave America’s Big Three automakers a one-month tariff reprieve but expects them to use the time to shift production from Canada and Mexico to the United States. White House Press Secretary Karoline Leavitt announced the temporary exemption Wednesday after Trump held a call with the CEOs of Stellantis, Ford, and GM, at their request. Levitt also made it clear that, as of April 2, reciprocal tariffs will go into effect worldwide.
What are they? In a nutshell, Trump will slap tariffs on other countries that match the tariffs those countries place on the US.
Which countries would be most affected? India, Argentina, South Korea, and Brazil had the highest tariff regimes as of 2023. India recently cut levies on many US imports, including motorcycles, but still has tariffs on imported cars of up to 110%, leaving small exporters demanding further reductions from Delhi. Argentinian President Javier Milei recently praised Trump’s plan for reciprocal tariffs and said he wants to pursue a reciprocal trade pact, even if it means leaving the Mercosur trade pact with neighboring South American countries.
Will Trump reverse course? It’s possible but unlikely. Trump has long been a believer in tariffs. In his address to Congress on Tuesday evening, he said “Tariffs are not just about protecting American jobs. They’re about protecting the soul of our country.”Staff remove bottles of US alcohol from the shelves of a Liquor Control Board of Ontario store as part of retaliatory moves against tariffs announced by President Donald Trump, in Toronto, Canada, on March 4, 2025.
Canada, Mexico, and China retaliate against Trump’s tariffs
It’s official: The United States is now waging a full-blown trade war against three of its largest trading partners. On Tuesday, Washington imposed tariffs of 10% on energy and 25% on all goods imported from Canada and Mexico and doubled its existing tariffs on Chinese imports from 10 to 20%. All three countries responded with harsh words and retaliatory measures.
Canada imposed an immediate 25% retaliatory tariff on $30 billion worth of US goods, with an additional $125 billion worth of products to be tariffed in 21 days. Provincial liquor stores removed American alcohol and Ontario Premier Doug Ford ripped up a $100 million contract with Elon Musk’s Starlink. Ford alsothreatened a 25% retaliatory tariff on electricity exports. Canadian Prime Minister Justin Trudeau called the tariffs “dumb,” prompting US President Donald Trump to repeat his taunt of “Governor Trudeau” and promiseeven higher tariffs in response to retaliatory efforts.
Mexico’s President Claudia Sheinbaum took a slower approach. “We have said it in different ways: cooperation and coordination, yes; subordination and interventionism, no,” she said. Sheinbaum plans to speak with Trump by phone on Thursday and will announce retaliatory measures on Sunday if no deal is reached.
China, meanwhile, placed an additional 10% to 15% tariffs on imported US goods, including chicken, wheat, soybeans, and beef as of March 10. Beijing says it will “fight to the bitter end of any trade war” but left the door open for talks, advising the US to “return to the right track of dialogue and cooperation before it is too late.”
The tariff war had immediate economic effects.Markets plunged, the price of a Dodge Ram truck reportedly rose from $80,000 to $100,000, and by mid-March American gas prices could rise by as much as40 cents per gallon, while Ford said the auto manufacturing sector in Canada could shut down.
Could Trump change course? We’ll be watching for further market volatility as well as blowback from consumers, businesses, and politicians. But stay tuned for a possible course correction: US Commerce Secretary Howard Lutnick already hinted Tuesday that Trump is considering “relief for USMCA-compliant goods” and “may roll back Canada and Mexico tariffs tomorrow.”
Canadian Prime Minister Justin Trudeau tours the galvanizing line at ArcelorMittal Dofasco in Hamilton, Ontario, Canada February 14, 2025.
Trump tariffs on Mexico and Canada set to begin Tuesday
On Tuesday, the US will impose 25% tariffs on its two closest trading partners, Mexico and Canada, driving a stake into one of the world’s largest trading relationships.
What the move disrupts: The three economies currently have low or non-existent tariffs on almost all of the goods they trade, dating back to the 1994 NAFTA free trade agreement, which Trump renegotiated
in 2020 as the USMCA. The US alone does nearly $2 trillion in annual trade with its two neighbors.
Why is Trump doing this? One reason, he says, is to force Canada and Mexico to stop illegal drugs and undocumented migrants from crossing into the US. Trump postponed these same tariffs a month ago after both countries beefed up border security.
But there’s more, MAGA more. The US runs big trade deficits with both countries – Trump can’t stand this. He sees tariffs as the best way to force companies that want access to the American market to invest in American production.
“What they have to do is build their car plants, frankly, and other things in the United States,” he said Monday.
What could happen next? No one is really sure. Supply chains are deeply intertwined, particularly in the auto industry, where components cross borders – and, now, tariff regimes – many times before a car is finished. US prices for those goods will almost certainly rise.
Watch the register and the pump. The US is also the largest single market for Mexican fruits and vegetables and the largest importer of Mexican and Canadian energy. Prices for all could rise, even if Trump includes a carveout dropping the tariff on Canadian oil and gas to just 10%.
Canada and Mexico have pledged retaliatory tariffs. A trade war could stoke inflation and weigh on economic growth in all three countries, at least in the short term.
Markets are spooked. The S&P dipped 2% on Trump’s announcement.
U.S. President Donald Trump attends a press conference with British Prime Minister Keir Starmer (not pictured) at the White House in Washington, D.C., U.S., February 27, 2025.
Trump’s tariffs back on, until they’re not
US President Donald Trump announced Thursday thata 25% tariff on Mexican and Canadian goods will take effect on March 4, reversing comments made one day earlier that suggesteda delay until April.
Why the change? Commerce Secretary Howard Lutnicksaid last month that if the two countries made progress on border security, there could be room for negotiation. But Trump claims drugs are still “pouring into our country”and added, “We cannot allow this scourge to continue to harm the USA.” He also blamed China for the flow of fentanyl and announced that he would add an additional 10% tariff on Chinese goods on the same date.
The reality: US border data showsa 97% decline in fentanyl seizures coming from Canada from December to January. In that time, Canada began deploying its $1.3 billion border security package and appointed a fentanyl czar. Canada’s ambassador to the US, Kirsten Hillmann, also noted that illegal migration from Canada dropped by 90% in recent months, a fact that apparently was positively received in Washington.
What’s next? Canadian public safety officials are in Washington, DC, this week to present evidence of Canada’s progress in a last-ditch attempt to keep tariffs at bay. Additional tariffs on steel and aluminum tariffs are due to stack on top of the 25% tariffs starting March 12.
Could things change again? Based on Trump’s previous flip-flops, anything is possible. For now, industries on both sides of the border are preparing for the worst.
A Made In Canada label is shown in Brampton, Canada, on February 3, 2025. Sweeping tariffs imposed by US President Donald Trump on many Canadian products, including dairy, force many Canadians to check labels for Canadian-made or produced products as a response to potential higher grocery costs. (Photo by Mike Campbell/NurPhoto)NO USE FRANCE
Tariffs were postponed. For a day. Now they’re back. For now.
After a short break, President Donald Trumpannounced Thursday that tariffs for Canada and Mexico are back on for March 4, along with an additional 10% tariff for China. That’s the plan as of right now, but things could change, as we’ve seen in recent days. On Wednesday, Donald Trump postponed across-the-board 25% tariffs on Canada and Mexico until April 2. That pause came shortly after Trump said the tariffs were, in fact, going ahead on March 4 – and after he paused them for 30 days last month. The White House also said steel and aluminum tariffs are still planned for March 12, as well as retaliatory tariffs in early April. Is that clear ... as mud?
The on-again-off-again tariffs are driving politicians in Canada and industry on both sides of the US-Canada border mad. The market hates uncertainty, and Trump’s tariff plans and contradictory statements are leaving policymakers and the business community wondering what exactly he has planned for the long term.
Commerce Secretary Howard Lutnick did offer some clarity on Trump’s tariff goals, saying that Canada and Mexico might be able to avoid duties if they can convince the administration they’ve done “an excellent job” on border security, but it’s anyone’s guess whether a) that’s true and b) what qualifies as an “excellent job.” Besides, any clarity ought to be taken with a grain of salt, given that Trump has also suggested tariffs are a means to balance US trade deficits, to force Canada to spend more on defense, to crush the country economically — and to bring it further under US control as the 51st state.