On Monday, the Center for Strategic and International Studies published an analysis of Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on China, Canada, and Mexico. Navin Girishankar, President of the Economic and Security Technology Department, and Philip Luck, Director of the Economics Program and Scholl Chair in International Business, discuss how the tariffs against Mexico and Canada “in particular risk undermining U.S. economic security by their direct economic repercussions” and their “inadequacy in motivating policy change by our partners, and their likelihood of degrading partnerships essential to countering global threats, in particular from China.”
The authors also ponder the endgame of this strategy:
The more interesting question is what the administration seeks in exchange for removing tariff threats: point-in-time reductions in the merchandise trade deficit, relatively narrow noneconomic ends such as fentanyl interdiction, or cooperation on the innovation and commercialization of critical and advanced technologies. If it is the third, then the modus operandi will likely need to change. The United States does not have an absolute advantage across sectors and technologies that will drive growth and security. It needs its long-standing partners, particularly its neighbors.