How long will the 2025 North American Trade War last?

Plus comments on Rubio's trip to Panama and Grenell's trip to Venezuela

Welcome to the first Monday in February. In today’s World Politics Review column, I call the multitude of events last week the largest shift in US policy towards the hemisphere since the terrorist attacks that occurred on September 11, 2001. As I write, “the speed and chaos of policy changes are likely to continue to cause complications.” The analysis below may feel chaotic because we’re all being forced to embrace the chaos to keep up.

I write about US policy in Latin America every Monday. In today’s newsletter:

1. Tariff timeframe scenarios

2. The response from Canada sets a tone

3. The tariff language boxes Sheinbaum into a corner

4. Rubio and Mulino have a successful visit in Panama

5. Grenell’s visit to Venezuela

6. What’s on the agenda moving forward?

Feel free to respond to this email with feedback, comments, and questions.

The 25% tariffs against Canada and Mexico start Tuesday. Imagine four time frame scenarios for when these tariffs end:

A: This week - There is a sudden backing down by Trump, declaring temporary victory before any real economic impact is felt, but the tariff threat remains.

B: This month - Essentially the same scenario as if it occurs this week. If this is the case, nobody will remember whether the tariffs lasted a week or a month.

C: This year - After 6-8 months of tariffs, the Trump administration comes to an agreement that allows all sides to back down from the trade war. This likely occurs due to economic pain in the US, but it could also occur if other countries feel so much more pain that they give in on terms that are incredibly favorable to Trump.

D: January 2029 - These tariffs are the new normal for the next four years and potentially beyond.

I predicted these tariffs would occur weeks ago and were not an empty threat. Yet, like many analysts, my gut instinct now is that they won’t last long. Four reasons:

1. These tariffs are economically painful

2. They are a diplomatic disaster weakening US influence globally

3. The tariffs are best used for leverage in negotiations; Trump wants to get some sort of “win” from them and will find a way to do so quickly before the initial shock wears off

4. Shaking up the status quo is a weekly event; Trump will get bored with tariffs; the show must go on to the next act

Still, I’m concerned that my gut reaction and the logic above are wrong. Because so many of us believe this will be short-lived, we may all undervalue the potential that these tariffs will stick around for the next four years and become the new normal. Further, if tariffs on Canada and Mexico stick around, then tariffs on Brazil, Colombia, Europe, and elsewhere will follow closely behind.

Trump likes tariffs. He believes in them. Short term economic pain may not be enough to convince the president this policy is a bad idea. As it feels like we all read about a tsunami of new crises every week, it can be hard to imagine what four years of this policy will look like. Even if you think it’s an unlikely scenario, it’s worth gaming out. Weeks from now, if we enter scenario C or D, the belief these tariffs would be brief will seem naive.

If this is scenario A or B and the tariffs end almost immediately, the threat of tariffs will remain. The threats will come back every few weeks or months until someone calls Trump’s bluff. In some ways, that may turn out to be worse.

Edit: About 20 minutes after I sent the newsletter, Sheinbaum announced that tariffs were postponed for a month. Mexico will send 10k National Guard troops to the border. Postponed unfortunately doesn’t change much of the analysis today; it just kicks the can on a lot of this analysis by 30 days. I’ll probably end up linking back to it in March.

Trump says he is placing tariffs on Canada because of fentanyl trafficking. Yes, that’s stupid. The key reason for using that language, true or not, is to justify the president’s emergency powers to override the free trade agreement. It’s a sign that you can’t take the stated logic of these tariffs too seriously. It’s also a problem from a negotiation standpoint because it offers Canada essentially nothing real that they can do to undo the tariffs. Symbolic policies to combat fentanyl will certainly be part of the solution, but the statistics and data on their effectiveness won’t matter.

This is as much about the show and symbolism as any real policy change. One big mistake countries and leaders are making in engaging with the Trump administration is believing they can explain the facts and change minds. Nobody should believe they can combat these tariffs with logic and data. Instead, they need one of two things:

1. A show to counter the show. Symbolic actions and concessions that make Trump feel like he is winning are more important than data.

2. Legitimate pressure and threats of their own. This is what Canada is attempting with their targeted tariffs and bans on products.

In terms of dealing with Trump, understanding the need for a show is what Panama got correct this weekend. Mexico has yet to figure out a symbolic show or a legitimate threat that it can use in response. I’ll explain below.