I’ve been saying for a while that markets were far too complacent about Trump’s threat to impose tariffs on Canada and Mexico, believing that he wouldn’t follow through because it’s such a stupid, self-destructive idea. As I wrote on Jan. 22,
[S]o far markets have shrugged Trump’s tariff threat off, apparently in the belief that he won’t follow through. But why not? Economists would, if he asked, tell him that high tariffs on neighboring nations closely integrated with the United States will do major damage; businesspeople would say the same thing. But if Trump wants your opinion, he’ll tell you what he wants it to be….
