On today’s show: Trump’s tariffs against Mexico, Canada, and China went into effect Monday night, and China and Canada quickly retaliated. The Washington Post examines what it could all mean for the price of goods, and Bloomberg looks at the possible economic fallout in Mexico. Ann Marimow from the Washington Post joins to discuss an unusual case before the Supreme Court today pitting Mexico against U.S. gun manufacturers. The Wall Street Journal’s Tarini Parti explains how the push to increase immigration arrest numbers is ensnaring migrants without criminal records. Plus, Trump halts all U.S. military aid to Ukraine, the man whose blood saved 2 million babies, and Los Angeles Lakers star LeBron James prepares to make more basketball history.
Chapter 1: What are Trump's new tariffs and why were they implemented?
But first, after a one-month delay, President Donald Trump's 25 percent tariffs on imports from Mexico and Canada went into effect at midnight last night. The president also doubled the current tariffs on imports from China from 10 percent to 20 percent. China swiftly responded with retaliatory tariffs on imports of American food and farm products.
Chapter 2: How have Mexico, Canada, and China responded to the tariffs?
like chicken, soy, wheat, corn, fruits, and vegetables. Canada also announced their own tariffs on $30 billion worth of U.S. imports, with promises to extend that in the days to come. Mexico, China, and Canada are among the U.S. 's biggest trading partners. Combined, the three nations were responsible for more than 40 percent of the nearly $3 trillion in goods imported in 2023.
Trump says the tariffs will provide a new revenue source for the government, pressure companies to relocate their production operations to the U.S., and force these countries to do more to stop the flow of fentanyl and illegal immigrants into the United States. Here's how Secretary of Commerce Howard Lutnick described Trump's moves to Fox News on Sunday.
We need fairness and we need the strength of Donald Trump to make the world reasonable to America and stop picking us off. It's over. Donald Trump's going to end it and make the world trade fairly with America.
On the eve of the tariffs going into effect, financial markets took a dive, with the S&P 500 posting its biggest loss since December and the Dow dropping more than 600 points. The Wall Street Journal describes this as the end of a decades-long era and a souring of the bet Canada and Mexico made when they signed agreements tying them to U.S.
Chapter 3: What economic impacts could the tariffs have on the U.S. and its trading partners?
trade, believing that the United States would continue to become more interconnected and more market-oriented. So let's take some time today to talk about the expected impact of these tariffs and how we got here.
A month ago, when Trump first threatened tariffs against Mexico and Canada before backing off, officials from those countries made quick moves to deploy more resources to the border, including Canada creating a fentanyl czar and Mexico sending troops. Lutnick told CNN the administration appreciated those moves, but they hadn't done enough on fentanyl.
Yesterday, Mexican President Claudia Sheinbaum disputed that claim, pointing to data that shows there's been a nearly 50 percent drop in fentanyl seizures at the border compared to a year ago. China, meanwhile, did not offer concessions and, according to The New York Times, does not want to come across as pleading with Trump.
Now that the tariffs are here, economists say it could impact everything from grocery products to lumber to gas. The Wall Street Journal spoke with economists who say this trade war could lead to stagflation. That's a condition where the economy is barely growing or stagnant while combating high inflation. J.P.
Morgan's chief economist also told the journal that if Canada and Mexico go into a recession because of this, that would also hurt the U.S. economy. Here's how CNN's Fareed Zakaria explained what the impact could be.
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Chapter 4: How are these tariffs affecting American and international businesses?
Let's take car production. In America, cars are made as a kind of integrated supply chain. In other words, parts moving back and forth from America to Canada to Mexico. They cross the border three or four times and you build essentially North American cars. So you're tariffing the part of the American supply chain. And guess who's going to come in?
The Korean car manufacturers and the Japanese car manufacturers for whom there are no tariffs. This is a gift to Japan and Korea.
American carmakers won't be the only ones hurting. Shares of European car companies like Volkswagen, Mercedes-Benz and BMW all dropped early Tuesday. And while a lot of larger American businesses have long been preparing for this moment, some of America's smaller businesses say it's been much tougher for them.
Rick Muscat has a family-run business that imports and sells footwear to companies like JCPenney, Macy's, and Kohl's. He told CNBC that the uncertainty of the current moment makes it hard to do business.
The point you're making is any business manager's worst nightmare, which is planning for the unknown. The uncertainty of this situation keeps me up at night. I'm often asked, what are you doing? How are you planning for it? And my answer is, I don't know.
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Chapter 5: What is the unusual Supreme Court case involving Mexico and U.S. gun manufacturers?
Trump tariffs fulfill a long-held Trump pledge to reshape our trade relationships. Back in February, the president acknowledged that they will cause, quote, some pain, but he said he expects foreign countries to bear the brunt of it. At the same time, he was largely elected to lower prices for Americans. And this trade war is likely to make that campaign promise much harder to fulfill.
Let's turn now to another crisis brewing between the United States and our neighbors. As Trump accuses Mexico of not doing enough to stop the flow of fentanyl coming north, Mexico says the United States isn't doing enough to stop the flow of guns from heading south.
And today, Mexico is bringing their case to the Supreme Court in a first of its kind lawsuit being filed by a foreign government in American courts about gun violence. Mexico argues that U.S. gun manufacturers are not just knowingly trafficking their guns into Mexico, but are actually designing and marketing those weapons to grow this illegal market. To understand Mexico's accusation, which U.S.
gun manufacturers deny... you have to understand a few things about Mexico's gun culture and laws. First, it's actually pretty hard to legally obtain a gun in Mexico. The laws there are strict. So strict, in fact, that the Washington Post reports there are only two legal gun stores in the entire country, and both are run by the Mexican military.
That means it can take weeks or months for a citizen to legally get a gun. The second is that these strict laws have not meant safer streets. Cartels get most of their guns from the United States and use them to commit violent crimes. Anne Marimo is a Supreme Court correspondent for The Washington Post. She explained the Mexican government's case that U.S.
manufacturers are supplying these weapons that flow through what's known as the Iron River, deliberately designing guns that they know will be used illegally in Mexico.
The examples they include in the lawsuit, Colt has a handgun called the Super El Jefe pistol, which they say is a term used to refer to cartel bosses. There's also a Emiliano Zapata 1911 pistol that's engraved with the Mexican revolutionary's statement that it's better to die standing than living on your knees.
So they say that these are designed and marketed knowing that they'll end up in the hands of the drug cartels.
Lawyers for some of these gun manufacturers did not respond to requests for comment from the Post, but alleged in court filings that Mexico's lawsuit is intended to limit Second Amendment rights. And they've raised concerns that proceeding with the suit could have harmful impacts on other U.S. companies.
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