Trump’s Tariff War: How Canada & Mexico Blinked First

EDITOR'S NOTES

What happens when your two biggest trading partners realize they can’t win a fight? They fold. That’s exactly what Canada and Mexico just did in response to Trump’s economic leverage. Canada, dependent on U.S. exports, and Mexico, whose economy is tied to the American consumer, had no choice but to fall in line. With tens of thousands of troops now being deployed to secure the border and fentanyl flows being disrupted, the real question is: what comes next? And does Trump’s aggressive negotiation signal a broader shift in global economic power?

Mr. Anderson Feb 5, 25

Trump’s Economic War: Why Canada and Mexico Had No Choice But to Surrender

A Losing Hand from the Start

If you’ve ever played poker, you know when you're holding a bad hand. But in geopolitics, leaders sometimes let their pride get in the way of logic. That’s what Justin Trudeau and Claudia Sheinbaum almost did—until reality hit them like a freight train.

Canada and Mexico rely on trade with the United States to keep their economies afloat. A full-blown trade war wouldn’t just have hurt them—it would have collapsed their economies overnight. Mexico sends 80% of its exports to the U.S., while Canada ships over $550 billion worth of goods south of the border each year. When Trump threatened tariffs, both leaders postured at first, but the numbers didn’t lie. They had no choice but to take the deal or face economic annihilation.

Mexico’s Tactical Retreat: 10,000 Troops to the Border

Mexico had the most to lose. With trade accounting for 73% of its GDP, a breakdown in relations with the U.S. would have sent its economy into a nosedive. So, President Sheinbaum agreed to send 10,000 Mexican troops to secure the border and combat the flow of fentanyl into the U.S. In return? A pause on tariffs.

This isn’t just a win for Trump; it’s a monumental shift in how Mexico is being forced to address the border crisis. For years, Mexico has allowed migrant caravans and cartel operations to run unchecked. Now, under pressure, it’s being forced to take real action—or risk devastating tariffs that could wipe out its manufacturing sector.

Trudeau’s Last-Minute Realization: Canada’s Economy Was on the Brink

At first, Trudeau played tough. He threatened retaliatory tariffs on $155 billion worth of U.S. goods, vowing to match Trump’s economic firepower. It was a bluff.

Here’s the truth: Trudeau’s economy couldn’t survive a real trade war. Over 2.4 million Canadian jobs depend on U.S. trade. The auto sector alone was predicted to shut down within a week if Trump’s tariffs took effect. By Monday, Trudeau had abandoned his bravado and announced a new plan:

Deploy 10,000 border personnel to stop illegal crossings.
Increase intelligence efforts against drug cartels.
Create a Canada-U.S. Joint Strike Force to tackle fentanyl and organized crime.

And just like that, Trump’s tariffs were off the table—for now.

The Bigger Picture: Trump’s Playbook is Just Beginning

This isn’t just about Canada and Mexico. Trump is using economic leverage as his primary weapon, and it’s working. Now, all eyes turn to his next targets:

🔴 The European Union – Trump has threatened tariffs here, but he has less leverage than he does with Canada and Mexico. Expect a drawn-out battle.

🔴 China – Trump has already imposed a 10% tariff on Chinese goods, but Beijing isn’t backing down yet. A full-scale confrontation is brewing.

The Consequences of a Trade War: Are We Headed for Something Bigger?

Throughout history, economic wars have often been precursors to real wars. The collapse of trade agreements, rising nationalistic policies, and economic instability are classic indicators of potential military conflicts. Trump’s tactics are aggressive, and while they’re proving effective in the short term, they risk escalating global tensions.

What happens if China refuses to yield? What if the EU retaliates?

Trump’s gamble is clear: economic strength as the first line of defense. If it works, he’ll reshape global trade for generations. If it fails, we could be looking at something much bigger than tariffs.

What You Need to Do Next

If Trump’s strategy succeeds, expect a new era of U.S. economic dominance. But if the trade wars spiral out of control, we’re looking at major financial disruptions. Are you prepared?

Download my free book, "Seven Steps to Protect Your Bank Accounts," and learn how to safeguard your wealth in unpredictable times. Get it here.
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The financial game is shifting. If you don’t prepare now, you could be left behind.