U.S. President Donald Trump is pausing tariffs — again — on some goods from Canada and Mexico. Andrew Chang breaks down two schools of thought: whether Trump's chaotic approach stems from lack of planning, or a much more intentional strategy.
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00:00First, they were on.
00:02We will tariff and tax foreign countries to enrich our citizens.
00:0825% on Mexico and Canada.
00:10Then, they were off.
00:12President Trump's tariffs against Canada will now be put on hold.
00:16Then, while the first set of tariffs were paused,
00:18Trump threatens a whole new second set of tariffs.
00:20And then threatens a third set of tariffs, reciprocal tariffs, stacked on top.
00:24But eventually, he loops back to the first, original tariffs,
00:28promising they're definitely coming.
00:30On the tariffs, is there any room left for Canada and Mexico to make a deal before midnight?
00:34And should we expect those Chinese tariffs, the extra 10%, to take effect tomorrow?
00:37No room left for Mexico or for Canada.
00:40No, the tariffs, you know, they're all set. They go into effect tomorrow.
00:44And then, those tariffs became real until they weren't anymore,
00:48because they were partially delayed.
00:51We spoke with the big three auto dealers.
00:53We are going to give a one-month exemption on any autos coming through USMCA.
00:58And then, a big chunk of what was left of the tariffs was paused again.
01:03Here's how Trump justified it.
01:05And I spoke to the president of Mexico, a wonderful woman, today.
01:09And we helped them out with a problem they were having, having to do with the tariffs.
01:16I helped them out with a problem they were having.
01:19As in, the problem he inflicted, and then paused, and then re-inflicted, and then paused.
01:26Are these the actions of a man who knows what he's doing?
01:30Maybe not, but maybe.
01:33There are two main schools of thought when it comes to how Donald Trump is managing the world's largest economy.
01:39Either the pandemonium is planned.
01:42Yeah, I think chaos is a big part of Trump's strategy.
01:47There's a term that applies to what the Trump administration is doing, weaponized uncertainty.
01:53Or another possibility is Trump just likes the attention, just likes the drama.
01:58I don't think there's a genuine economic strategy behind it.
02:03Let's start with that.
02:04The argument that Trump has no coherent plan is supported by the fact that he sometimes has no consistent point of view.
02:16Take tariffs, for example.
02:18Canada's a very bad abuser also.
02:21Vast numbers of people to come in, and fentanyl to come in.
02:24Legally, Trump has justified tariffs by branding the influx of fentanyl from Canada and Mexico a national emergency.
02:33But is that really the motivation? Or is it about boosting American manufacturing?
02:38We don't need trees from Canada. We don't need cars from Canada. We don't need energy from Canada. We don't need anything from Canada.
02:46Sometimes it seems to be about the principle.
02:49Subsidizing Canada to the tune of over $100 billion a year.
02:53By the tune of about $200 billion a year.
02:57And other times it seems to be more about power.
03:00I'd like to see Canada become our 51st state.
03:03He feels strongly that it would be very beneficial for the Canadian people to be the 51st state of the United States.
03:09They wouldn't be paying for these tariffs.
03:11And what about the occasional lack of a unified message?
03:14Trump's own team sometimes seems left in the dark.
03:18Like whatever Trump was planning, if he was planning any of it, was never actually discussed out in the open.
03:25Take what Trump's Commerce Secretary said earlier this week on Fox News about tariffs against Canada and Mexico.
03:31So I think he's going to work something out with them. It's not going to be a pause. None of that pause stuff.
03:36But I think he's going to figure out you do more and I'll meet you in the middle some way.
03:41And we're going to probably be announcing that tomorrow.
03:43Except this was wrong.
03:45Two days later, Trump did in fact issue a significant tariff pause.
03:49We saw this a bit in the first term, but not nearly to this extent.
03:54But if you were to put a timeline of promises backtracking, promises backtracking, it's just a zigzag pattern.
04:03And this zigzagging isn't necessarily only a communication thing.
04:07Sometimes Trump's policies just aren't properly thought out.
04:11President Trump has announced new tariffs on China that remove the de minimis exemption.
04:16On February 1st, Trump issued an executive order that taxed Chinese imports under $800.
04:22For years, those imports had been duty free.
04:25But then, one week later, Trump completely reversed course.
04:29Because there was no plan for how the U.S. Postal Service was supposed to suddenly process brand new taxes on the mountain of stuff Americans order every day from sites like Timu and Xi'an.
04:42Packages started getting backlogged.
04:44So now this order is on hold until they figure it out.
04:48It's the whims of somebody who seems to change his mind as fast as the rest of us change our underwear.
04:53There's the constant drama impulse control.
04:55If you want to make the case that there is a master plan, what is that master plan?
05:01And there are countless examples of this apparent lack of a master plan.
05:05Because many of the consequences that seem to invariably force Trump to take back what he says are foreseeable.
05:13The biggest example of this is how tariffs would affect the auto sector.
05:17I'm afraid for both sides, for my workers, for the workers in the United States.
05:22But it's devastating. It'll devastate us.
05:25Car manufacturing supply chains across Canada, the U.S. and Mexico are highly integrated and interdependent.
05:32Millions of parts and vehicles flow between the three countries every year.
05:36And economists predicted a 25% tariff would increase the cost to make each vehicle by thousands of dollars.
05:45This industry has been integrated and grown together for decades.
05:50You can't unscramble the omelette one morning because you decide, you know what, you want to have a fried egg or a boiled egg.
05:57You made the omelette. You can't turn it into eggs over easy.
06:00But it was only after Trump had dangled the threat of tariffs for two months and then actually enacted them that he decided, no, wait, I can't do that.
06:11I have to hit pause.
06:13It's just a modification short term because I didn't want to hurt the American.
06:17It would have hurt the American car companies if I did that.
06:21It was predictable to anyone paying attention to the details.
06:23I mean, the auto sector is so heavily integrated that, you know, a piece goes back and forth multiple times.
06:27You can't build a car under these circumstances.
06:29And the entire time Trump spends changing his mind, there's material harm to American businesses because they don't know which suppliers to use or what prices to charge.
06:39What he's doing is he's creating uncertainty for people and companies that have to make pending investment decisions or future capital planning.
06:48And consider one of Trump's most prized metrics for success.
06:52Since my election, the stock market has set records.
06:55Everybody's stock has done well since the election.
06:58But nowadays, asked by reporters whether his latest pause on tariffs had anything to do with stock market performance.
07:04No, nothing to do with the market.
07:06I'm not even looking at the market.
07:08Because the market has slumped.
07:11Stocks continue to fall today with fears of higher prices and escalating tensions.
07:16He says, I'm not watching the market.
07:18Like, excuse me.
07:19Like, yeah, yeah, I believe that as far as I could throw a Honda Civic.
07:22Right.
07:23The one thing he will respond to is when the stock market goes down.
07:27When the stock market goes down and he changes his mind.
07:30But in the meantime, there is real economic consequences for doing this, for the uncertainty that consumers and producers take.
07:40But let's talk about the second possibility here, which is that Trump knows exactly what he's doing.
07:46When you spend some time observing Trump, you start to notice more and more how he very clearly enjoys the persona that he's carved out for himself of being a disruptor.
08:00Like when he's naming those countries he believes treat the U.S. unfairly.
08:05The European Union, China, Brazil, India, Mexico and Canada.
08:11Have you heard of them?
08:13Or when he's waving a pen at those same two economies who depend on the U.S. the most.
08:20Or when he calls the president of Ukraine a dictator and days later jokes that he would never say such a thing.
08:27Mr. President, do you still think that Mr. Zelensky is a dictator?
08:33Did I say that? I can't believe I said that. Next question.
08:37I do think that he thrives on the idea that we're having this conversation right now about what his strategy is here.
08:43I think he thrives on the idea that he's unwieldy and nobody really knows what's really going on.
08:48Yes, it's this old paradox of how a bug is sometimes actually a feature.
08:54As in Trump's leadership may not simply be a series of unforced errors,
08:59but rather an intentional set of moves designed to throw opponents off balance.
09:04We see a lot of what they call the madman theory.
09:08You know, basically make yourself look so unpredictable that your adversaries don't know what to believe about you.
09:15And let's stop to consider who Trump might consider his adversaries.
09:19Countries like Canada and Mexico?
09:21Yeah, and maybe not just Canada and Mexico.
09:25The United States has been ripped off by virtually every country in the world.
09:29But also he's increasingly singled out and used incendiary language against those companies that do business with other countries.
09:37Well, a lot of them are globalist countries and companies that won't be doing as well
09:43because we're taking back things that have been taken from us many years ago.
09:48Basically, you have globalist companies that have been ripping us off.
09:52And I'll explain where I'm going with this.
09:54Trump has always been transparent about one thing, that he wants American manufacturing to return to America.
10:02America will be a manufacturing nation once again.
10:06And he's always been clear, tariffs are a way of forcing those companies who would dare to make product outside of the U.S.
10:13to relocate, to set up factories, to create jobs, to put America first.
10:19He would, in his heart of hearts, like to have fewer cars built in Canada and Mexico and more cars built in Michigan and North Carolina.
10:27So what they have to do is build their car plants, frankly, and other things in the United States, in which case they have no tariffs.
10:34And so there's a strategic line you can start to imagine where maybe you never actually have to apply tariffs to anything
10:42because maybe the threat is enough.
10:45He's essentially trying to intimidate or provoke some response that he thinks he'll be able to take advantage of.
10:53And if that's the case, the rubber banding, the pendulum brinksmanship starts to make more sense.
11:00If he thinks this is the most painless way to get what he wants eventually,
11:05that the prospect of perpetual unending uncertainty is too much to bear.
11:11So from industry's point of view, let's just do as Trump wants and move operations to the states.
11:18He's a lot more willing to try things than your average politician.
11:21We've seen over the course of the last month and a half, his entire month and a half in office in the second term,
11:27that there's just less of a barrier there to trying things.
11:31The Republican Party has decided to kind of hand him the keys.
11:35Now, to be both fair and clear, Trump's aggressive style has produced material change globally
11:41in a way that we haven't really seen under previous presidents.
11:45Just look to Europe as an example, how they're scrambling to shore up mutual defense and defense spending
11:50directly because of how Trump treats the NATO alliance.
11:55But turning back to tariffs, there are two complications with his strategy.
12:00The first is whether what he's demanding is even possible.
12:04You can't move automotive plants in anything less than five years.
12:08You're going to have to close a plant, you've got to break supply lines,
12:11you've got to find new supply lines, find a new site, build a new plant,
12:15get your multimodal access and your power there.
12:17And that's $2.5 billion per plant that you don't have sales against to amortize that cost.
12:22These privately owned, publicly traded companies that begged him to pull back from the brink,
12:27he's going to bankrupt them before he gets what he thinks he wants.
12:31But the second problem is that there may be a point at which Trump's adversaries
12:36stop riding the roller coaster.
12:38Canada seems to want off.
12:40As I always say, you know, you touch a stove once and you get burnt,
12:43you don't touch that stove again.
12:46The only deal is drop the tariffs.
12:49We're going to ensure that the Americans understand how pissed off we are.
12:54We cannot live as Manitobans with a persistent threat of Donald Trump's tariff tax.
12:59And consider how differently the federal government has responded to this latest pause
13:04compared to the first time.
13:05After Trump's first pause a month ago,
13:08the prime minister immediately pulled Canadian counter tariffs off the table.
13:13Trade war averted.
13:15But his response this time?
13:18I can confirm that we will continue to be in a trade war that was launched by the United States
13:25for the foreseeable future.
13:27Now the Canadian government has withdrawn a future second wave of tariffs,
13:32but has decided to keep its current first wave on $30 billion worth of American goods in effect.
13:40And come Monday, which is in a few days from the time I'm recording this,
13:44Doug Ford of Ontario seems so far to be holding firm on his threat
13:49to jack up the price of electricity sold to Americans by 25%.
13:54So if Trump does indeed have a master plan, what comes next?
13:59I don't know. I left my crystal ball in the other room. I'm sorry.
14:03I don't know. And he doesn't know, which makes it very difficult to negotiate.
14:10How do you play that game when the rules keep shifting on an hourly, daily, weekly, monthly basis?
14:18But I think we can make at least one prediction.
14:22That whether you think Trump is governing by impulse or has calculated his moves,
14:28whatever he says publicly has less and less value.
14:32Because when he says he's going to do something, maybe he will and maybe he won't.
14:37Even signed agreements like trade deals stop being meaningful
14:41if the U.S. president can simply decide unilaterally to violate them, or at least threaten to.