The incoming Republican administration of Donald Trump has threatened to impose a 25 per cent tariff on all products from Canada and Mexico on the first day of his presidency — Jan. 20, 2025. Canada says it will continue to work with the United States on trade issues while Mexico has hinted at retaliation.
The tariffs would be devastating to both the Canadian and Mexican economies, which depend heavily on trade with the U.S. for their economic well-being.
The two targeted governments would in fact be forced to respond with retaliatory tariffs targeting American goods, creating economic carnage in all three countries.
“Are these tariffs legal?” is a natural question to ask. Simply put, no.
In a typically hyperbolic, randomly capitalized post on his Truth Social platform, Trump writes that he will impose “a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders. This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”
The North American Free Trade Agreement (NAFTA) replacement that Canada, Mexico and the United States negotiated — under American duress six years ago — contains a clause stipulating that the deal doesn’t stop any of the three countries “from applying measures that it considers necessary for … the protection of its own essential security interests.”
But any attempt to invoke that clause would be so obviously a pretext that it’s laughable. As economist Paul Krugman notes, the U.S. Department of Commerce’s rules don’t allow for the clause to be used to coerce other countries into action; the tariffs have to be linked to an effect on a particular industry.
So, no. The tariffs would not be legal. But the question itself is completely beside the point.
It assumes that the North American relationship continues to be rooted in the rule of law and........