Trump’s tariff threats give Washington whiplash

President Trump on Monday paused the threat of 25-percent tariffs against Canada and Mexico, two of the nation’s biggest trading partners, and claimed an early victory in his mission to crack down on drug and human smuggling along the northern and southern borders.

Trump and his allies claimed victory after Mexican President Claudia Sheinbaum agreed to send 10,000 troops to the U.S.-Mexico border in return for a monthlong delay of tariffs and Canadian Prime Minister Justin Trudeau promised to name a fentanyl czar and to establish a Canada-U.S. Joint Strike Force to fight organized crime, smuggling and money laundering.

But the sudden halt on major tariffs set to go into effect Tuesday left lawmakers on Capitol Hill with a sense of whiplash after watching financial markets yo-yo in response to the president’s rapidly evolving policy pronouncements.

A sense of alarm spread among GOP lawmakers Monday morning after the Dow Jones Industrial Average, S&P 500 and NASDAQ plunged in premarket trading.

“A lot of people are concerned with maybe how the market is looking at it,” said Sen. Thom Tillis (R-N.C.). “But you got to look at the reality that Mexico, it caught their attention and they’re sending troops [to the border.]”

Tillis said Trump won this round with Canada and Mexico but warned that “sustained tariffs” would create a lot of economic damage.

“I think sustained tariffs never work. There’s all sort of retaliation,” he warned. “At the end of the day, both sides suffer some damage through retaliation, closing markets, etc.”

Many Republicans feel trapped between their traditional skepticism of tariffs and their desire to support Trump or at least avoid his wrath by sticking their necks out on the issue.

Five and a half years ago, Senate Republicans discussed a resolution of disapproval when Trump vowed to apply a 5 percent tariff on Mexican goods during his first term.

Now GOP lawmakers feel less confident about challenging Trump on trade policy, but they remain leery of becoming embroiled in a trade war with allies.

Former Senate Republican Leader Mitch McConnell (R-Ky.) warned in an interview with “60 Minutes” that tariffs would drive up costs for average Americans.

“It will drive the cost of everything up. In other words, it will be paid for by American consumers. I mean, why would you want to get into a fight with your allies over this?” McConnell said.

The Wall Street Journal’s editorial board on Friday called Trump’s proposed tariffs “the dumbest trade war in history.”

The Journal warned the tariffs would hurt the domestic automobile industry, which depends heavily on Canadian and Mexican suppliers, and “cause mayhem in the cross-border trade in farm goods.”

Other Republican lawmakers declined to talk much about Trump’s high-stakes showdown with major trading partners, knowing he plans to threaten tariffs against European trading partners next.

“Pause, we’re on pause,” said Sen. Joni Ernst (R-Iowa), whose home state sends 30 percent of its exports, such as alcohol and tractors, to Canada, and another 20 percent to Mexico.

When Republican lawmakers heard of Trump’s threat over the weekend to slap steep tariffs on nearly $1 trillion in imported goods and services, they hoped the president was maneuvering for negotiating leverage instead of digging in for a prolonged trade war.

“The best tariffs are the ones never applied,” said Sen. Rand Paul (R-Ky.).

“Using them as leverage to open discussion and try to convince countries to do something, they obviously have great value. It’s hard to argue with that. If they’re ever put in place, they’ll be a disaster for our economy. So I hope we don’t do that,” he said.

Paul said Mexico has needed to put more of its army along the largely lawless U.S.-Mexico border for years.

Other GOP lawmakers breathed a sigh of relief after Trump announced the pause, which immediately buoyed the stock markets.

“Good news on Mexico tariff pause for 1 month,” Sen. Chuck Grassley (R-Iowa) posted on the social media site X. “Hopefully negotiating will preempt more talk of tariffs.”

The Iowa senator had pleaded with Trump earlier in the day to exempt Canadian potash shipments from tariffs.

“Biden inflation increase the input cost to farming by 20 percent [including] particularly high prices on fertilizer,” Grassley posted on the social platform X. “So I plead [with] President Trump to exempt potash from the tariff because family farmers get most of our potash from Canada.”

Other GOP lawmakers said Trump’s tough approach worked, even if it gave them some heartburn over the weekend.

“Looks like it worked,” Sen. John Cornyn (R-Texas) said of Trump’s tariff threat.

“I think that’s good that we got some cooperation from Mexico and didn’t have to use the high tariffs,” he said.

But Cornyn, whose home state engaged with $272 billion in trade with Mexico in 2023, acknowledged no one knows what to expect after the 30-day moratorium expires.

“If you knew that, you should pick a lottery ticket,” he said.

Even before Trump and Trudeau reached their deal to pause tariffs on hundreds of billions of dollars worth of goods imported from Mexico, Senate Majority Leader John Thune (R-S.D.) signaled he didn’t expect the tariffs to go into effect for any sustained period of time.

“We’ll see how long” they last, Thune told reporters when asked for his reaction to Trump’s tariff threats Monday afternoon.

“It sounds like the Mexican tariffs are already being paused,” he noted. “We’ll see what happens.”

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