As the opioid epidemic raged in the United States in 2020, killing thousands, Congress established a commission to look into the extent to which opioids enter the U.S. from Canada and to investigate ways to reduce the flow. The commission found that “Canada is not known to be a major source of fentanyl, other synthetic opioids or precursor chemicals to the United States, a conclusion primarily drawn from seizure data,” according to its February 2022 report.
Last year, U.S. Customs and Border Protection agents intercepted about 19 kilograms of fentanyl at the northern border, compared with almost 9,600 kilograms at the border with Mexico, where cartels mass-produce the drug.
The quantities of fentanyl leaving Canada for the United States are minuscule — 0.2 percent of what is seized at the U.S. southern border. Despite this, Canada’s government has been taking significant steps to reduce even further the drug flow to America. In December, Daniel Anson, the director of intelligence and investigations at the Canada Border Services Agency, said the Canadian border agency had established new teams and technology to focus on the export of the drug, as well as the import of synthetic chemicals. The Canadian government will also set up a border financial crime center over the next year to target trade-based money laundering and fraud.
These are important points, to which I will return later in this Letter.
Why has Canada done all this? To avoid Donald Trump’s scatter-brained, unnecessary, treaty-breaking tariffs.
On Saturday, Canada learned Donald Trump didn’t care.
For it was on Saturday that Trump announced, where else, but on his social media network, that he was slapping 25% tariffs on Canada and Mexico, as well as 10% on China, all to be effective on Tuesday of this week. He also threatened the European Union, telling reporters on Sunday, “It will definitely happen with the European Union. I can tell you that because they’ve really taken advantage of us. They don’t take our cars, they don’t take our farm products. They take almost nothing and we take everything from them.”
Trump apparently thinks fomenting trade wars with one’s allies is a guaranteed recipe for economic success.
The war of words continued over the weekend when Mexico, Canada, and China retaliated by saying they would impose their own tariffs on U.S. goods. Then, the stock market fell like a brick off a table, the Wall Street Journal called called Trump’s tariffs “the dumbest trade war in history,” and Republicans in Congress ran for hideyholes to avoid having to answer journalists’ questions about any of it.
Donald Trump didn’t care.
Over the weekend, the Prime Ministers of Mexico and Canada, each suddenly facing an economic five-alarm fire, had phone conversations with President Trump in which they appeared to capitulate to his demands, the operative term being “appeared to.”
For her part, Mexico’s President Claudia Sheinbaum agreed her country would put 10,000 national guard troops on the border to stem the flow of migrants and fentanyl. With that assurance, Trump paused his tariffs for at least 30 days, apparently not realizing Mexico already has 15,000 troops there for that very purpose.
Canadian Prime Minister Justin Trudeau also agreed to take steps to reinforce the northern border, issuing this statement:
I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border. In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering. I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million. Proposed tariffs will be paused for at least 30 days while we work together.
As noted above, with the exception of the Canada-U.S. Joint Strike Force, since December Canada has been putting in place everything else in Trudeau’s statement.
What is the result of this Kabuki Theatre? Mexico and Canada agree to keep doing what they’re already doing, Sheinbaum and Trudeau get to play Trump for the fool that he is, Trump gets to declare victory, the stock market breathes a sigh of relief, the rest of the world gets to see bullying stupidity in action, and U.S. consumers won’t have to pay more for nearly everything — at least for now.
It’s well known that Donald Trump has a love affair with tariffs; it is his preferred economic policy. In 2018, to great bloviation, he imposed tariffs on steel and aluminum, later expanding them to cover certain derivative products that use steel and aluminum, such as nails, tacks, wire and cables. The job losses created by this were substantial, and well in excess of any jobs that may have emerged in the steel-production industry as a result of the tariffs.
Writing in Econofact, Kadee Russ and Lydia Cox of Harvard University and University of California, Davis, respectively, analyzed Trump’s 2018 steel tariffs and concluded:
Tariffs on goods used by a large number of U.S. firms, like steel, make it difficult for U.S. producers to compete against foreign rivals, both at home and in export markets. Tariffs on steel may have led to an increase of roughly 1,000 jobs in steel production. However, increased costs of inputs facing U.S. firms relative to foreign rivals due to the Section 232 tariffs on steel and aluminum likely have resulted in 75,000 fewer manufacturing jobs…
So, Trump’s steel tariffs created 1,000 new jobs, but, overall, resulted in a net loss of 74,000 jobs.
Donald Trump didn’t care.
The tariff fiasco and Elon Musk’s coup-like takeover of the U.S. government (the subject of tomorrow’s Letter) are frontal assaults on the fabric, indeed the heart, of our 237-year-old Constitution. From the 1794 Whiskey Rebellion, to the civil war, to the cold war, and beyond, the Constitution has always seemed to find courageous defenders when it needed them, and America has become the most prosperous and influential country in history because of that.
What we are facing now is different. Never before has the nation been attacked so ruthlessly from within. In the coming weeks and months, the misguided MAGA cult will feel the brunt of this as services and institutions it depends on go *poof* like a fairy in the middle of the night.
One thing is clear. Donald Trump doesn’t care.
