MONDAY 2/3/25

UPDATE -- Mexican President Claudia Sheinbaum said Monday morning she has reached a deal with the Trump administration to delay tariffs against her country, The New York Times reports. The 25% tariff on Canada and the 10% tariff on China are still on, so far.

Son of Smoot-Hawley – Tariffs threatened, tariffs delivered. They will be delivered on Tuesday and it looks like they are not to be dismissed as negotiable. Nor is President Trump about to be talked out of them by the more rational of his aides. 

“This will be the Golden Age of America! Will there be some pain? Yes and maybe (maybe not). But we will make America great again, and it will all be worth the price that must be paid,” Trump wrote on his social media site, Truth Social (per The Hill) Sunday. “We are a country that is now being run with common sense – and the results will be spectacular!”

Tariff Tuesday will impose a 25% tax on goods from Mexico and Canada, including, for example, auto parts and components that typically cross borders several times before being put together in US-assembled cars and trucks. 

Chinese goods face a 10% tariff Tuesday.

Except… The tariff on sour, heavy crude oil from Canada, refined primarily in the Midwest, will be 10%. Trump certainly doesn’t want to turn off Michigan and Wisconsin’s swing voters who swung for MAGA last November. 

Canadian retribution … Our northern neighbor will impose a 25% tariff Tuesday on US orange juice, peanut butter, wines, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, pulp and paper, Finance and Intergovernmental Affairs Minister Dominic LeBlanc and Foreign Affairs Minister Mélanie Joy announced Saturday.

“A detailed list of these goods will be made available shortly,” according to the Government of Canada -- as if the above list is lacking in detail.

Mexican retribution … Our southern neighbor will impose tariffs of 5% to 20% on pork, cheese, fresh produce, manufactured steel and aluminum,” The Guardian reports, citing various sources.

Chamber of doom … US Chamber of Commerce Senior Vice President and Head of International (his full title) John Murphy said in part in a release: “The President is right to focus on major problems like our broken border and the scourge of fentanyl, but the imposition of tariffs under IEEPA (International Emergency Economic Powers Act) is unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains.”

Bipartisan oppo … In an op-ed for The Wall Street Journal, former Sen. Phil Gramm (R-TX), a non-resident senior fellow at The American Enterprise Institute, and Clinton administration Treasury Secretary Lawrence Summers, now a Harvard University professor and president-emeritus, called out what they see as the folly of the Trump tariffs and compared it with the Smoot-Hawley Tariffs of 1930, which most economists then – and now – blame for triggering the Great Depression. 

Gramm and Summers wrote that “tariffs don’t have a predictable effect of reducing trade deficits, and trade deficits aren’t necessarily an adverse economic development. Indeed, trade deficits often arise as foreign investors choose the US as a preferred destination for their capital.”

DOGE grabs purse strings … While everyone’s attention was focused on the impending tariffs, Treasury Sec. Scott Bessent late Friday handed over full access of the federal payment system to lieutenants of the quasi-governmental Department of Government Efficiency (DOGE) chief/SpaceX/Tesla CEO/X-Twitter-owner and World’s Richest Man Elon Musk. This hands Musk and DOGE a “powerful tool” to monitor and potentially limit government, according to The New York Times.

Before Bessent handed Treasury’s combination code to Musk, top Treasury official and career civil servant David Lebryk had resisted handing access over to DOGE. Lebryk was put on leave, and then suddenly retired last Friday, sources told the NYT.

So, yes, this does appear to be a significant maneuver by the Trump White House in trying to fulfill its quest of replacing non-partisan career civil servants with acolytes of the president. 

But wait, there’s more … If nothing else, the Trump White House earns kudos for its efficiency in making its grab for maximum power with minimum checks and balances. Also on Friday evening, the new administration forced out “dozens” of FBI officials, including chiefs of several field offices as well as agents who worked on the investigations of Trump’s federal criminal cases, according to The Hill, which reported earlier Friday that five executive assistant FBI directors were told they were being demoted. 

“It is deeply alarming that the Trump administration appears to be purging the most experienced agents who are our nation’s first line of defense,” Sen. Mark Warner of Virginia, the ranking Democrat on the Intelligence Committee, said in a statement.

--Compiled and edited by Todd Lassa