| Hello from London,
Brutal. That’s the term my colleagues use in a new article to describe the 25% tariffs just imposed by Donald Trump on most imports from America’s closest trading partners, Canada and Mexico. Don’t imagine this is some incremental shift, similar to the actions he took in his first term as president. These tariffs, imposed suddenly, far outstrip previous ones. As a result, expect higher prices for American consumers and potentially lower economic growth all over the place. Costs to American industry, such as carmakers, will also come from increasing uncertainty. North America’s economy, in the past few decades, had become remarkably integrated as supply lines criss-crossed the borders. Will these begin to unravel? Canada has already said it will impose 25% tariffs on some American imports. Mexico’s president has also talked this weekend of imposing new levies.
China, too, has been hit by additional tariffs—though at a lower rate, for now, than Canada and Mexico. In his first term, Mr Trump mostly focused on China, applying tariffs that hit some $370bn-worth of imports. The new round goes further. Ignoring China, it applies to some $900bn-worth of goods imported just from Canada and Mexico.
Mr Trump is plain wrong in raising tariffs. If they remain in place Americans will, though probably only slowly, pay the price. Still, this is what voters knew they were getting. As an elected politician who long promised that he would do this, Mr Trump has the right to do so. (I recommend you visit and bookmark our regularly updated Trump tracker, to keep an eye on his various actions and approval ratings.)
The challenge for other countries, with leaders who better grasp the immense and mutual benefits of free trade, is how they respond. Mr Trump is a protectionist. He wants tariffs on imports from everywhere. Europe is in his crosshairs, and governments there have long championed free trade. The political pressure for others will be to retaliate, as Canada has done, nudging the world towards a trade war and straining Western co-operation in other areas.
Are these tariffs for the long term, or are they mostly a means for Mr Trump to bully his allies and partners in order to extract concessions? There’s a chance it is the latter. It is only a week since Mr Trump threatened tariffs on another close ally, Colombia, to strong-arm it into accepting returned migrants. Colombia’s government blustered in anger, threatened to retaliate with its own tariffs, then quickly folded to Mr Trump’s demands.
Elsewhere, we have launched our German election prediction model. Later this month voters will surely boot out Olaf Scholz and the Social Democrats who have presided over stagnant growth and general gloom in Europe’s largest economy. That party could fall to third place. But which parties have the advantage now? How much the hard-right, anti-immigrant Alternative for Germany rises is a big question, not least for similar hard-right parties—such as in France—hoping to do well in future elections.
Our regular, weekly games are live. In our Dateline quiz we challenge you to guess the year of five extracts from our archive related to historical events. And in our mini news quiz you get to see whether you’ve kept up with the events of the past week.
If you’re following our coverage of the end of the second world war, with our 1945 archive project, then this week’s update contains a treat. We writers of course imagine that our carefully crafted words are the most interesting part of The Economist to readers. But study the adverts that appeared in our pages 80 years ago and you get a striking sense of what life in Britain at the end of the war was like. Read on.
Finally, I went to the theatre last night in London and hugely enjoyed the show. The audience cheered and clapped in delight. But, at least where I sat, no one felt obliged to get to their feet and offer a standing ovation. Our Back Story columnist grumbled recently that the standing ovation has become far too routine—and that evidently struck a nerve with many readers. We’ve pulled together a selection of your best comments and letters on the topic in this article. I applaud your responses, but please note that I am doing so while sitting. |
