Who won and lost as Trump's trade war is delayed - for now - Voice of Asia

After last-minute negotiations with Canada and Mexico, US President Donald Trump suspended the threat of imposing heavy tariffs on the two countries for a period of 30 days. He can view concessions on border and crime enforcement as a victory. However, Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum can also claim political victories.

A trade war that could have brought economic shock to North America and even the world has been temporarily put on hold. So, who compromised first? What will happen next? Trump's brinkmanship seems to have worked. The high-stakes confrontation between US President Trump and America's closest trading partners appears to have paid off, with both Mexico and Canada agreeing to stricter border security measures and greater efforts to address fentanyl trafficking.

The strategy of using the US economy to force concessions from other countries has won a victory for Trump's "America First" agenda, allowing him to pursue core domestic issues without American consumers feeling the economic consequences of a continental trade war. His tariff strategy is nothing new. Tariffs imposed on steel and aluminum during Trump's first term sparked strong opposition from Mexico, Canada, and the European Union, but economists say these measures were more limited in scope.

This time, Trump has promised to impose comprehensive tariffs on goods from Mexico, Canada, and China, with China still set to begin imposing 10% tariffs on goods starting at midnight on Tuesday. However, it is unclear whether Trump will follow through on his threats to Canada and Mexico after the 30-day period expires. This uncertainty raises concerns that businesses may reduce their reliance on the US market, delaying investments in building new factories or hiring workers until the trade stalemate becomes clearer.

Canadian Prime Minister Trudeau has reached a trade truce at the end of his term. This is not the Arctic chill from the north in January, but rather a widespread sigh of relief from Canadian politicians and business leaders over the 30-day suspension of US tariffs. While the tariff threat remains, Canadian Prime Minister Justin Trudeau can claim a political victory: a temporary truce in what could have escalated into a devastating trade war. Canadian politicians have been struggling to figure out exactly what will satisfy Trump - Canada's domestic political situation is of no help, with Trudeau ending his tenure as a lame-duck prime minister.

The border security measures announced on Monday are not all new. In December, Canada announced measures worth CAD 1.3 billion (USD 900 million; GBP 700 million), including efforts to disrupt the fentanyl trade, new tools for law enforcement, and enhanced coordination with US law enforcement. Canadian surveillance drones and two Black Hawk helicopters recently began patrolling the border between the two countries. Officials have been citing these efforts for weeks to show they are taking Trump's border concerns seriously.

A new element appears to be the appointment of a "fentanyl czar" and a CAD 200 million intelligence directive to combat organized crime and fentanyl. A question that remains is what this means for the future of Canada-US relations. Trump's economic threats have deeply shaken the partnership between the two allies.

Mexican President Sheinbaum has bought herself time. Throughout the trade crisis, President Claudia Sheinbaum has called for "calm" and "tranquility." Even on Friday, she said she was confident of securing a last-minute reprieve from the 25% tariffs on Mexican goods. That proved to be the case, after an early morning phone call with President Trump. Shortly after the announcement of the agreement, she could barely conceal the smile on her face, and her supporters hailed it as a model for negotiating with Donald Trump.

Yes, she agreed to send the National Guard to the border, focusing on combating fentanyl smuggling, but crucially, she also got what she wanted from Trump. Besides the obvious - a suspension of tariffs - she also got Trump to "commit" that the US would take more action to address the trafficking of high-powered weapons from the US to Mexico, to prevent them from ending up in the hands of cartel gunmen.

But she has also bought herself another crucial commodity: time. She now has weeks to solidify the points agreed upon in the phone call and turn the temporary suspension of tariffs into a permanent one. Secretary of State Marco Rubio is expected to visit Mexico soon to discuss these issues and will establish a joint fentanyl group with Mexican and US health and security officials. If Sheinbaum is indeed able to prevent further trade hostilities, it would be the first major victory for her new government since taking office in October and could set the tone for future interactions with President Trump and his administration.