The First Trump 2.0 Coercion Cycle

Here we go again....

Photo by Christine Roy on Unsplash

The hard-working staff here at Drezner’s World has made the case in multiple venues that Donald Trump had a piss-poor track record of coercive bargaining during his first term. There was an important exception, however. Trump did succeed in using the threat of U.S. economic coercion to get Mexico to take more aggressive action to halt migrants from Central America to cross the border.

Unfortunately, Trump drew the wrong lesson from that incident, assuming that if it worked in Mexico it would work elsewhere. Readers, it did not.

Still, that context is worth keeping in mind in assessing the first of what will be many loud efforts at additional coercive bargaining in his second term, which feels like it started a few weeks ago rather than, you know, January 20th.¹

This past Monday Trump announced that once inaugurated, he would immediately levy a 25 percent tariff on imports from Canada and Mexico until those countries waved a magic wand and halted the flow of fentanyl and migrants coming into the United States. Later that day he announced a 10 percent tariff on Chinese imports unless they also halted the flow of fentanyl.

As the New York Times noted, Trump was targeting America’s three largest trading partners: “The three countries together purchased more than $1 trillion of U.S. exports and provided nearly $1.5 trillion of goods and services to the United States in 2023.” If Trump followed through, the result would be damaging to all the economies involved, including the United States. So it’s unsurprising that numerous U.S. retailers are “urging customers to buy now before President-elect Donald Trump’s proposed tariffs potentially raise costs—and prices,” according to the Wall Street Journal’s Suzanne Vranica.

What will happen now? I wrote earlier this month that, “Both great powers and smaller states know by now that the best way to deal with Trump is to shower him with pomp and circumstance, abstain from fact-checking him in public, make flashy but token concessions, and remain secure that by and large their core interests will be preserved.” Will that hypothesis hold up?

Well, the flashy but token concessions from Mexico and Canada are proceeding apace. Both Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum reached out to Trump to speak with him within hours of his announcement. Trudeau went so far as to fly down to Mar-a-Lago in order to dine with Trump.

These contacts are the flashy but token concession in this instance. The calls and visits can, in and of themselves, be viewed as concessions. The key to placating Trump is demonstrating that he is the boss and must be listened to at all times. It is easy for Trump to frame such outreach as a public act of genuflection.

Sure enough, this is how Trump framed the call from the Mexican president less than 48 hours later, stating on social media that they had had an excellent conversation. Trump claimed that Sheinbaum “has agreed to stop Migration through Mexico, and into the United States, effectively closing our Southern Border” and that “Mexico will stop people from going to our Southern Border, effective immediately.” As the AP notes:

The exchange between the two leaders appeared to confirm for Trump the value of threatening to disrupt trade with import taxes. His initial social media post moved financial markets and gave him a response he was quick to describe as a win. Even if the proposed tariffs fail to materialize, Trump can tell supporters that the mere possibility of them is an effective policy tool and continue to rely on tariff threats.

So does this mean there will be substantive concessions from Canada, Mexico, or China? Well…. I have my doubts.