North America Averted a Trade War — for Now

Summary

Podcast Summary: The Daily – "How North America Averted a Trade War — for Now"

Introduction

In the February 4, 2025 episode of The Daily, hosted by Michael Barbaro and featuring contributions from Ana Swanson, Matina Stevis-Gridneff, and Simone Romero, listeners are guided through the high-stakes negotiations that narrowly prevented a devastating trade war between the United States, Canada, and Mexico. This detailed summary captures the key discussions, insights, and conclusions drawn by the experts, providing a comprehensive understanding for those who haven't tuned in.

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Trump’s Tariff Plan and Its Potential Impacts

The episode begins with an exploration of President Donald Trump’s original plan to impose sweeping tariffs on North America’s three largest trading partners. Ana Swanson explains, “His plan was to impose sweeping tariffs on America's three biggest trading partners. So a 25% tariff on Canada and Mexico virtually across the board...” (02:15).

Matina Stevis-Gridneff emphasizes the severe repercussions for Canada, stating, “Economists predict that such tariffs would tip the Canadian economy into a recession, and we could see hundreds of thousands of jobs lost... up to half a million people could lose their jobs” (03:10). Simone Romero adds insight on Mexico, highlighting the country's heavy reliance on U.S. trade: “Mexico exports 80% of its exports to the US... it was extremely vulnerable... it could take 2 percentage points off of GDP” (04:04).

The discussion underscores the interconnectedness of the North American economies, shaped by decades of free trade agreements, and how abrupt tariff changes could trigger simultaneous recessions in both Canada and Mexico, with significant spillover effects on U.S. consumers.

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Rationale Behind the Tariffs: Border Security and Trade Deficits

Michael Barbaro probes the motivations behind Trump's tariff threat, asking Ana Swanson about the administration's stated reasons. Swanson clarifies, “According to the President, it's been pretty much all about the border... to stop flows of migrants and to stop shipments of fentanyl” (05:01). Additionally, Trump cited trade imbalances: “he also mixed in the trade deficit... they sell a lot more to the United States than they buy from them” (05:34).

Matina Stevis-Gridneff provides a fact-check on these claims, noting that concerns about fentanyl and migrant crossings from Canada are largely overstated. She states, “fentanyl crossing from Canada into the United States is a tiny amount... about 1%” (05:53). Regarding migration, she adds, “since June, those crossings are down 89%... due to Canada’s recent border and visa process changes” (06:27).

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Reactions from Canada and Mexico

As President Trump declared the imminent tariffs, both Canada and Mexico swiftly prepared their responses. Matina Stevis-Gridneff recounts Prime Minister Justin Trudeau’s address: “He [Trudeau] came out... flanked by all his top ministers... announced Canada will be responding to the US trade action with 25% tariffs against $155 billion worth of American goods” (07:10). Trudeau emphasized national pride and warned of escalations if the U.S. did not relent: “We don't want to be here, but this is where we are... we have to stand up with pride for our country” (08:10).

Simone Romero details Mexico’s measured response led by President Claudia Sheinbaum: “she pushed back on [Trump’s] incendiary remarks... called on the US to do more to solve the fentanyl problem within its own territory” (09:38). Sheinbaum also addressed the issue of guns smuggled from the U.S. into Mexico, highlighting the complexity of bilateral grievances.

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The Averted Trade War Deal

On the brink of the tariff's implementation, rapid negotiations ensued. Simone Romero explains how business leaders anticipated a last-minute resolution based on previous Trump negotiations: “business leaders... knew that Trump sometimes sets a really high bar to begin with, and then the negotiations really get underway” (13:43).

Ultimately, a phone call between Trump and Sheinbaum led to a temporary reprieve. Simone outlines the deal: “Mexico agreed to deploy 10,000 National Guard soldiers to the border... the US agreed to help curb the flow of US guns into Mexico” (16:07). Matina Stevis-Gridneff notes that Canada received a 30-day reprieve in exchange for committing to spend $1.3 billion on border technology and personnel: “deploy more technology, more staff and personnel along that border” (21:00).

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Analysis of the Negotiations' Outcome

The experts analyze whether the concessions made by Canada and Mexico were substantial. Matina Stevis-Gridneff expresses skepticism, stating, “the border piece of that concession doesn't feel huge to me... it's already even budgeted for in Canada's economic planning” (24:18). However, she acknowledges Trudeau’s renewed focus on combating fentanyl as a more meaningful gesture: “renewed focus on fentanyl... must have been easier for him to see eye to eye with President Trump” (24:18).

Ana Swanson evaluates the effectiveness from Trump’s perspective, suggesting that his administration views tariffs as tools for leverage: “using the power of the American economy and deploying that as a weapon” (28:35). She posits that while Trump’s supporters may view the outcome as a victory, critics argue it fosters global uncertainty and erodes trust in the U.S.’s role in international trade.

Matina Stevis-Gridneff highlights the long-term damage to Canada’s trust in the U.S., noting that “the instability here in Canada... will leave lasting scars beyond this immediate short term reprieve” (26:54). In contrast, Mexico managed to navigate the standoff more adeptly, potentially sustaining its bilateral relations without significant long-term fallout.

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Implications for Future U.S. Foreign Policy

The episode delves into what this incident signals for future U.S. trade and foreign policy. Ana Swanson suggests that Trump’s willingness to leverage tariffs for non-trade-related objectives sets a precarious precedent: “he might have to deploy them... to show everyone that he's willing to use them” (28:25). This approach can lead to heightened global tensions and unpredictability in international trade relations.

Moreover, Matina Stevis-Gridneff emphasizes the broader economic implications within North America, where the threat of continued tariffs could lead to ongoing instability and diminished economic cooperation: “this situation puts Canada, Canadians, the Canadian government, on a footing of continued insecurity” (26:54).

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Conclusion

The episode concludes by reflecting on whether the temporary avoidance of a trade war was worth the ensuing economic and diplomatic turmoil. Simone Romero suggests that, from Mexico’s transactional perspective, the outcome was unsurprising and manageable: “it just wasn't all that surprising for this crisis to erupt in the first place” (25:28). In contrast, the fraught negotiations have left Canada with a lingering sense of vulnerability and eroded trust toward the United States.

Ana Swanson encapsulates the dichotomy of perceptions, where Trump’s base may view the outcome as a tactical success, while skeptics see it as a manufactured crisis that undermines long-term international relations and economic stability.

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Key Takeaways

• Economic Risks: Imposing 25% tariffs on Canada and Mexico could have driven their economies into recession, resulting in massive job losses and negatively impacting U.S. consumers through increased prices.

• Underlying Motives: While officially justified by border security and trade deficits, the facts suggest that the concerns about fentanyl and migrant crossings from Canada were minimal and did not warrant such drastic measures.

• Diplomatic Maneuvering: Both Canada and Mexico responded assertively, negotiating concessions that temporarily averted the trade war but left underlying tensions unresolved.

• Long-term Consequences: The standoff has strained Canada-U.S. relations and introduced uncertainty in North American trade dynamics, potentially affecting future cooperation and economic planning.

• Policy Implications: Trump's use of tariffs as a negotiation tool, extending beyond traditional trade issues, raises questions about the stability and predictability of U.S. foreign policy moving forward.

This episode of The Daily effectively highlights the complexities and high stakes involved in international trade negotiations, revealing the delicate balance between national interests and global economic stability.

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Note: Timestamps correspond to the conversation segments within the transcript provided.

Transcript

[Michael Balbaro]

This podcast is supported by Meta.

[Matina Stevis-Gridneff]

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[Simone Romero]

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[Matina Stevis-Gridneff]

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[Simone Romero]

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[Matina Stevis-Gridneff]

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[Michael Balbaro]

From the new York Times, I'm Michael Balbaro. This is the Daily On Monday, North America came within hours of a multi billion dollar trade war that was poised to hobble the economies of Mexico and Canada. Today. My colleagues Anna Swanson, Matina, Steves Gridneff and Simone Romero on the last minute negotiations that headed off the crisis. For now, it's Tuesday, February 4th. So friends, welcome. Ana, you are joining us from Washington D.C. matina from Toronto, Canada and Simone from Mexico City. Thank you all for being here on very short notice. We appreciate it.

[Ana Swanson]

Thanks.

[Simone Romero]

Thank you. Good to be here.

[Matina Stevis-Gridneff]

Thanks for having us.

[Michael Balbaro]

And the reason we wanted you to be here is because we want to make sense of a very fast moving story playing out in all three of the countries where you are based involving the leaders from each of those countries that brought us to the verge of a historic and very consequential trade war between them. Ana, I wanna start with you. What had been President Trump's original plan for what this morning would look like? The plan before the plan changed?

[Ana Swanson]

Yeah, his plan was to impose sweeping tariffs on America's three biggest trading partners. So a 25% tariff on Canada and Mexico virtually across the board, except a lower tariff on Canad oil and 10% tariff on China. And that would include everything from cars, lumber, natural gas, beer, vegetables, pretty much everything that we're importing from those countries.

[Michael Balbaro]

Okay. And let's put China aside for just a moment. Since it has felt like this was primarily about our neighbors to the north and south, Canada and Mexico. I want to put the impact of 25% tariffs into perspective for both countries, as concedes conceived of over the past few days by Trump. What would it do to each of them and in turn, I guess to US Consumers? Mattina, let me start with you.

[Matina Stevis-Gridneff]

Well, Michael, we should start by saying that the three economies have just been so deeply integrated because of existing free trade agreements that have been put in place and then renegotiated over the past several decades. And so for Canada specifically, the impact would be catastrophic Economists predict that such tariffs would tip the Canadian economy into a recession, and we could see hundreds of thousands of jobs lost. For example, in the province of Ontario, which is the heart of the Canadian automotive industry, the predictions are that up to half a million people could lose their jobs. So it would be truly meaningful and devastating for the Canadian economy and for Canadians.

[Michael Balbaro]

And, Simone, putting aside the developments of Monday for just a moment, in theory, what would 25% tariffs mean for Mexico if slapped on it from the United States?

[Simone Romero]

You know, there really was a huge amount of fear and trepidation about these tariffs. There was the expectation that they would cause a devastating blow to Mexico's economy. And this is really mainly because, you know, Mexico, more than any other major economy in the world, relies on trade with the United states. Mexico exports 80% of its exports to the US so it was just extremely vulnerable going into this situation. There was an expectation that it could take 2 percentage points off of GDP in Mexico. That would essentially push the economy into a recession. So there was a great deal of concern about the impact that this could have.

[Michael Balbaro]

Right. And I can see why we're talking about two recessions here, one in Canada, one in Mexico, if these tariffs were to go in effect as planned. And, Ana, what was the stated rationale from President Trump for these tariffs against Canada and Mexico?

[Ana Swanson]

Well, according to the President, it's been pretty much all about the border. So he really was trying to pressure these countries, he said, to do more to stop flows of migrants and to stop shipments of fentanyl coming across the border. However, in the last couple of days, he also kind of mixed in the trade deficit. He said that these countries sell a lot more to the United States than they buy from them, and they would also have to fix that problem. But it seems like it is mostly about the border, which is sort of his number one domestic policy issue right now.

[Michael Balbaro]

Right. And those are, of course, claims that we tend to associate with Mexico, not so much with Canada. So just from a fact checking perspective, Matina, how real an issue are migrant border crossings and fentanyl entering the United States from Canada?

[Matina Stevis-Gridneff]

Well, the facts show that as far as the fentanyl is concerned, Canada has its own opioid crisis at home. But the fentanyl crossing from Canada into the United States is a tiny amount of the total, about 1%, 1% of.

[Michael Balbaro]

All fentanyl entering the United States.

[Matina Stevis-Gridneff]

Correct. For example, data shows that last year, 19.5 kilograms, or 43 pounds of fentanyl were found crossing from Canada into the United States.

[Michael Balbaro]

And what about migrants?

[Matina Stevis-Gridneff]

When it comes to irregular crossings at the Canada United States border, that is also a really tiny fraction of the total of irregular migrants crossing into the United States, a fraction of what happens at the southern border, for example. But that number had gone up in the last three years. There had been a market increase of those crossings. However, since June, those cross eggs are down 89%, according to Canadian statistics. And that's because of a number of changes that Canada implemented at the northern border and its visa processes that have severely curbed those crossings.

[Michael Balbaro]

Got it. So that's a helpful perspective. I want to talk about the reaction from both Canada and Mexico, especially over the weekend when President Trump made clear in his telling this was not going to be a bluff, that these tariffs were going to begin Tuesday morning. 1201. Matina, I know we just heard from you, but I want to begin with Prime Minister Justin Trudeau. He sounded interestingly both kind of rueful and quite forceful at the same time.

[Matina Stevis-Gridneff]

And I think that's what the tone he was aiming for was tonight.

[Michael Balbaro]

First, I want to speak directly to Americans, our closest friends and neighbors. This is a choice that, yes, will harm Canadians, but beyond that, it will have real consequences for you, the American people.

[Matina Stevis-Gridneff]

He came out in a Saturday evening address flanked by all his top ministers. And then he laid out what was an already anticipated retaliatory plan.

[Michael Balbaro]

I am announcing Canada will be responding to the US trade action with 25% tariffs against $155 billion worth of American goods.

[Matina Stevis-Gridneff]

He said, we don't want to be here, but this is where we are and we have to stand up with pride for our country.

[Michael Balbaro]

We will stand strong for Canada. We will stand strong to ensure our countries continue to be the best neighbors in the world.

[Matina Stevis-Gridneff]

And he said that that plan would escalate if the United States didn't back down.

[Michael Balbaro]

What's an example of one of the products that he would tariff in a retaliatory manner at 25%, it might be kind of interesting to name it.

[Matina Stevis-Gridneff]

Bourbon, chickens, tomatoes, dishwashers. It's a long list of goods meant to hit.

[Michael Balbaro]

It sounds like Americans at different geographies and it seems like income levels.

[Matina Stevis-Gridneff]

Absolutely. And in briefings and interviews I've done with Canadian officials, did the run up to the tariff impos, they had made it clear that those tariffs were surgically selected in order to hit particularly red and purple states, to make sure representatives there would pick up the phone and call Mr. Trump and say, please make this stop, it's hurting us.

[Michael Balbaro]

Bourbon. Of course, Kentucky Senator Mitch McConnell. Republican Simone, what's the reaction from Mexico's leader when Trump lays this out and says, it's gonna happen, it's gonna happen fast, it's going to happen big?

[Simone Romero]

Well, it was really interesting. Mexico's President, Claudia Sheinbaum, had quite a measured response to the announcement of these tariffs. I think we have to remember this isn't Mexico's first rodeo with Trump. Members of her administration have been through this experience during the first Trump administration when tariffs were imposed on some Mexican products and Mexico retaliated at that time and then ended up actually renegotiating the entire free trade deal agreement for North America. And really, it ended up being quite advantageous for Mexico in the end. However, it was a challenge for her to respond over the weekend because in Trump's executive order, he made a remark that was kind of incendiary in Mexican politics when he said that the Mexican government has an allegiance with drug cartels. That's kind of an explosive statement to make. And so she pushed back on that. She also said something really interesting. She brought up an issue which is really seen this way in Mexico, but perhaps not in the United States, which is that fentanyl is an issue of domestic demand in the US that, you know, there would not be a crisis if there were not demand for this illicit substance among Americans. And so she really called on the US to do more to solve the problem within its own territory.

[Michael Balbaro]

Unidos.

[Simone Romero]

In addition to that, she also raised the issue of guns. Mexico is waging a legal battle in the US Right now over guns that are smuggled from US Gun shops into Mexico that are supplied to the cartels that really feed into the violence in the country. So she brought up those important points while at the same time making it clear that she was still ready to talk and keep on negotiating.

[Michael Balbaro]

Right. I mean, her point was, I'm willing to negotiate, but you should know that your drug and violence problem is your drug and violence problem, not necessarily our making. And, Ana, I wanna ask you something. As both of these neighboring countries are essentially saying to President Trump, a version of this feels like a manufactured standoff in crisis. I think those of us who have studied Trump's relationship to tariffs for some time and remember especially how he campaigned on them originally in 2016, we tend to think about the purpose of tariffs to Trump and to the entire MAGA movement as weapons that induce not border security, but a restoration of domestic manufacturing. But that's not what Trump seems to be up to here, and that's not how the leaders of Canada and Mexico see him operating right now.

[Ana Swanson]

Yeah. So typically tariffs are used for trade reasons, to balance out unfair trade in a relationship. And Trump definitely thinks about tariffs in that way, too, and has plans for that type of tariff. But you're right. Here it's all about using tariffs as a negotiating tool, as a source of leverage for things having little to do with trade, the border and fentanyl. And I think what's happened is that President Trump has just discovered that tariffs are a really powerful tool and one that's immediately available to him as a president. He issued these tariffs using an executive order where he created a national emergency, and then he could go ahead and issue them, you know, right away. So he sees that as just a really powerful tool to force other countries to make concessions to him.

[Michael Balbaro]

Right. And of course, that leaves a message to everybody involved in this standoff that he's very open to negotiation because it's not a long term economic strategy the way we have thought about it. Okay, so Monday morning dawns and Simone. The US Stock market does not like these impending tariffs. And the question is, will Trump actually.

[Simone Romero]

Go through with was incredible. The peso was crashing, stocks were under a lot of pressure, and yet there still was a sense really among business leaders in the business establishment that this could be solved before that Tuesday deadline. They've been through this before. They know how this works. They know that Trump sometimes sets like a really high bar to begin with, and then the negotiations really get underway. And really that seems to be what happened here. There was an expectation that President Sheinbaum was going to speak to the nation at a scheduled time on Monday morning. Everyone was waiting for that to happen. Suddenly the minutes started going by and she was late in starting. And then we all found out that these two leaders were talking by phone to one another and that they finally reached a deal that would avoid these tariffs for at the next 30 days.

[Michael Balbaro]

Okay, we're gonna take a break and when we come back, we're gonna talk about that deal. We'll be right back. This podcast is supported by Meta Meta's.

[Matina Stevis-Gridneff]

Open source AI available to all, not just the few. Here's Brandon Mitchell, CEO of Rightsy.

[Simone Romero]

We use Llama Meta's free open source AI model to build an AI tool.

[Matina Stevis-Gridneff]

That helps people get their dre job. Learn [e-mail] open my name's Hannah Dreyer.

[Ana Swanson]

I'm an investigative reporter at the New York Times. So much of my process is challenging my own assumptions and trying to uncover.

[Matina Stevis-Gridneff]

New information that often goes against what.

[Ana Swanson]

I thought I would find.

[Matina Stevis-Gridneff]

All of my reporting comes from going out, seeing something and realizing, oh, that's actually the story.

[Ana Swanson]

And that reporting helps readers challenge their own assumptions and come to new conclusions for themselves.

[Matina Stevis-Gridneff]

This kind of journalism takes resources.

[Ana Swanson]

It takes a lot of time. It takes a lot of reporting trips. If you believe that that kind of.

[Matina Stevis-Gridneff]

Work is important, you can support it by subscribing to the New York Times.

[Michael Balbaro]

So Simon, what are the terms of this deal with Mexico that was reached when everyone didn't even know the two of them were on the phone and all of Mexico was waiting to hear from its president?

[Simone Romero]

Well, it was really interesting. Mexico agreed to deploy 10,000 National Guard soldiers to the border with the United States to combat the trade and illicit drugs and also to really curb the flow of migration into the United States. On the flip side of that, Mexico was able to show a win in those negotiations with Trump when Mexico's president said that the US had agreed to help curb the flow of US Guns heading into Mexico, which is a big issue for Mexicans government. Those were the basic terms that were ironed out on Monday.

[Michael Balbaro]

Okay. The recent historian in me wants to point out that President Biden had persuaded Mexico, I believe in 2021 to add 10,000 troops to the US Mexico border to enforce the border. Is this going to be in addition to those? Is it bringing them back? Should we doubt the meaning of adding 10,000 troops when it happened four years ago without a major standoff over tariffs?

[Simone Romero]

Well, it is hard to tell exactly what happened to those troops that were deployed in 2021. We also have to rem there was a previous deployment of Mexican troops back in 2019. So this has happened before. You know, this is the third time in six years that we're seeing a major deployment of Mexican troops to the border at the behest of the United States. So really the question is right now, what are those troops realistically going to be able to do? You know, when we have those boots on the ground, will they make a difference? Because it's not clear whether they made much of a difference before. Of course, the conditions right now on the U. S. Mexico border are really different. It's actually remarkably calm at the moment. Illegal crossings across this border are at their lowest level since 2020. The border is very calm for a combination of reasons. Part of this are asylum restrictions that the Biden administration put in over the past year. And part of this has to do with the Mexican government's own actions. Right. They have been breaking up migrant caravans long before they make it to the border with the US They've also been detaining migrants at levels rarely seen before in recent history in Mexico. So this has resulted, really, a sharp decline in illegal crossings at that border. And one other thing I want to say about this is if the goal is to address not only migration, but the flow of illegal drugs across the border, Mexico sending thousands of National Guard soldiers to the border is really going to do very little to attack that problem. Because while President Trump and and other leaders in the Republican Party have argued that migrants are responsible for taking a lot of the fentanyl across the border into the United States, actual US Government evidence and statistics show that that's not the case. US Citizens overwhelmingly are the ones who are smuggling fentanyl into the US So it's not like the fentanyl crisis is going to be solved in one month. It's not going away. It's not clear if the deployment of soldiers is going to do much about it either.

[Michael Balbaro]

That's fascinating. So, given that, Ana, how should we think about this? Is this Mexico capit, Trump or Trump capitulating to Mexico? Should we see this as a genuine victory for US national security, or mostly symbolic? Because the reporting that Simone is describing suggests there's not exactly a migrant crisis of the scale we're used to thinking of at that border.

[Ana Swanson]

Yeah, well, I think, you know, both sides are eager to try to turn this into a symbolic and political victory for themselves, kind of regardless of what the terms of it are. And so the issue with judging whether or not they've made real gains here is that, you know, particularly for Trump, the requirements that he was asking for to satisfy him were kind of vague and subjective. So it was never really clear, you know, what exactly Mexico needed to do to get these tariffs off. So it's really up to the president to define what a win is. And I think he's gonna find some way to proclaim a win for himself here.

[Michael Balbaro]

And that, of course, Matino leaves Canada kind of flapping in the wind here. What happens there as Mexico's leader seems to attack adeptly navigate this dynamic with Trump and sidesteps temporarily, at least, these tariffs. What happens with Prime Minister Justin Trudeau?

[Matina Stevis-Gridneff]

Justin Trudeau also has a phone call with President Trump in the morning of Monday, but it goes very, very differently to the call he had with Sheinbaum. As we understand it, President Trump brings up other issues that are unrelated to the border, such as access for US Banks in the Canadian. They hang up without A deal. Then they make a date to speak again at 3pm Eastern. While we're waiting for this call to take place, I think we're going to.

[Michael Balbaro]

Have another good conversation today. We're actually speaking at 3:00 again.

[Matina Stevis-Gridneff]

But Donald Trump is in the Oval Office and he takes the opportunity to weigh in on what's going to happen on his phone call with Justin Trudeau. And he says, look, what I'd like.

[Michael Balbaro]

To see Canada become our 51st state.

[Matina Stevis-Gridneff]

Well, basically, I want Canada to be the 51st state of the United States.

[Michael Balbaro]

Why are we willing to lose between $100 billion and $200 billion a year? We don't need them. As a state, it's different. As a state, it's much different. And there are no tariffs. So I'd love to see that. But some people say that would be a long shot.

[Matina Stevis-Gridneff]

This is something that started off as a joke. And Canadian officials actually pointed out to me that he made this joke during his first presidency, but he really repeating it over and over again in the standoff with Canada.

[Michael Balbaro]

Right. And can we just say what an astonishing thing that is, that in between two phone calls with Prime Minister Trudeau, what he's basically saying from the Oval Office is the easiest way to avoid tariffs is to become a United States state. I mean, just kind of deeply unusual.

[Matina Stevis-Gridneff]

I think deeply unusual is one way to put it. Also aggravating, terrifying, upsetting to many Canadians who are seeing the country they thought was their best friend, closest ally. As Trudeau said on Saturday night, we've spilled blood next to you in multiple wars over the decades. That's really, really hard. And it also just highlighted something Canadians were already suspecting that perhaps it wasn't really about the border, perhaps President Trump had other things on his sides.

[Michael Balbaro]

And then, of course, we actually get this second call between Trudeau and Trumba. Just tell us what happens.

[Matina Stevis-Gridneff]

The call goes on for at least 45 minutes. And at the end of it, Justin Trudeau puts out a statement that says, we have a deal.

[Michael Balbaro]

We should say this was just moments ago.

[Matina Stevis-Gridneff]

It was literally four minutes ago to the moment that we're recording. And he says we also are getting a 30 day reprieve from these tariffs like Mexico had announced earlier in the day. And he lays out what the deal is. And it is a border deal. The Canadian prime minister says that we are going to push ahead with a plan to spend 1.3 billion Canadian dollars. That's just shy of a billion US dollars, deploy more technology, more staff and personnel, along that border. Now, it is worth mentioning that this plan had already been put in place weeks ago in response to the original track Trump concerns. So I think it'll be interesting to see whether it's sold as a victory when it was a plan already announced. However, on the fentanyl front, Trudeau does announce several new measures. He says Canada will appoint a fentanyl czar. He says Canada will list fentanyl linked and other organized crime entities related to the drug trade as terrorist organizations, an important thing that we know Trump wants to do in the US as well. And he also says that Canada will throw 200 million Canadian dollars into renewed intelligence efforts pertaining to the drug trade and cartels.

[Michael Balbaro]

Hmm. Are these feeling like meaningful concessions from Canada?

[Matina Stevis-Gridneff]

I feel like, given the fact that Canada had already started addressing President Trump's border concerns, the border piece of that concession doesn't feel huge to me. This is something that's already even budgeted for in Canada's economic planning. I think what is more meaningful is this renewed focus on fentanyl. Like I said earlier, Trudeau has admitted Canada has its own opioid crisis. And so I believe that that must have been a little easier for him to see eye to eye with President Trump on, even though the facts show that Canada is not an exporter of fentanyl to the United States, at least not at a worrying scale.

[Michael Balbaro]

Okay, this is the question I have for all of you, and in no particular order was the juice worth the squeeze here. Was what Trump seemed to get from these two trading partners and neighbors to the north and south worth the market turmoil, the fear that it instilled in the governments of Mexico and in Canada, as well as among corporate leaders in the United States? I don't know how to answer that question, but I'm hoping you do.

[Simone Romero]

You know, really, from Mexico's perspective, I think that there's the view that. That the relationship with the US has been transactional for a very long time now, independent of which president is in power. There are good things about that relationship and there are bad things about that relationship from Mexico's view. So I think that it just wasn't all that surprising for this crisis to erupt in the first place. Mexican authorities really kept a cool head throughout much of the process, which was very interesting. They didn't take the base, though they did respond assertively on certain points. But from Mexico's point of view, I don't think that the outcome of this is all that surprising.

[Matina Stevis-Gridneff]

No, I mean, I can talk about Canada, and I feel that in the last 24, 48 hours, so much trust has been shattered between the two countries that it will be really hard to build it back. Also, let's remember, a 30 day reprieve is not a permanent reprieve. This situation puts Canada, Canadians, the Canadian government, on a footing of continued insecurity, which is exactly where President Trump seems to want them to be. But the loss of trust and the instability here in Canada I feel have made a big impact and will leave lasting scars beyond this immediate short term reprieve.

[Michael Balbaro]

Sounds like the wounds will be deeper for Canada than for Mexico. And Ana, I wanna know what you think from Trump's perspective and from those around him. Was it worth all of the drama? I'm going to guess the answer is yes.

[Ana Swanson]

Well, yeah, I would think from the President and his supporters perspective, they'll say yes. I mean, obviously the President is very attuned to the optics of his actions and how the public perceives them. But a lot of these concessions were already on the table, as my colleagues are saying, and we're being repackaged. So I think his supporters will say this is the art of the deal. His critics will say this will was a manufactured crisis. It also raises some questions about what will he do with other countries going forward. I think the President will see this as putting other countries on notice that he is willing to deploy tariffs, he's ready to use them, and the President will see that as a good thing. But there are certainly critics who will say that kind of uncertainty really erodes the rest of the world's trust in the United States to be this responsible stakeholder, to be in charge of this global trading system that has. And then at the individual business level, it creates a lot of uncertainty too. If you as a business are watching out for the threat of tariffs, are you going to make an investment in a new factory or hire new workers? So it just creates a lot of uncertainty for people around him.

[Michael Balbaro]

Is it a stretch to say that America's foreign policy right now, given the way Trump is using tariffs, is basically about pain? And what our trading partners threshold for pain is.

[Ana Swanson]

I think it's about America first and it's about, you know, using the power of the American economy and deploying that as a weapon? You know, Trump knows that the American economy is extremely powerful and he likes to have that leverage to hold over other countries. And he also just really likes tariffs. You know, he said that in many ways that he likes them as a tool. They're very powerful, they're very immediate. I think we could also get into a situation where if people start to question whether or not the President is ready to deploy tariffs, he might have to deploy them, you know, just to show everyone that he's willing to use them. It's not really a source of leverage if you're not willing to go through with it.

[Michael Balbaro]

Right. It's not useful to him if it's an unshot gun sitting on a table, at some point he may need to fire it. Well, I want to thank you three Matina, Simone and Anna. We really appreciate it. Thank you.

[Simone Romero]

Thank you, Michael.

[Ana Swanson]

Thanks.

[Matina Stevis-Gridneff]

Thanks, Michael.

[Michael Balbaro]

Unlike his tariffs against Canada and Mexico, Trump's new 10% tariff on Chinese imports to the United States went into effect as planned this morning. On Monday, Trump said that those tariffs would not be his last against China, calling them an opening salvo. We'll be right back. This podcast is supported by Meta.

[Simone Romero]

Open source AI is available to all, not just the few. Meta's open source is free to use, enabling models like Metatron to innovate.

[Matina Stevis-Gridneff]

Here's Yale professor Dr. Annie Hartley. Using Meta's open source AI llama, we built an AI tool that allows clinicians from around the world to collaborate, helping us deliver accurate medical information in the right place at the right time.

[Simone Romero]

Learn how others are building with Meta's free open source [e-mail] open.

[Michael Balbaro]

I'm David Marchese.

[Matina Stevis-Gridneff]

And I'm Lulu Garcia Navarro, and we're.

[Michael Balbaro]

The hosts of the Interview from the New York Times.

[Simone Romero]

David and I have spent our careers.

[Matina Stevis-Gridneff]

Interviewing some of of the most interesting and influential people in the world, which means we know when to ask tough.

[Michael Balbaro]

Questions and when to just sit back and listen.

[Matina Stevis-Gridneff]

And now we've teamed up to have these conversations. Every week.

[Simone Romero]

We'll try to reveal something about the.

[Matina Stevis-Gridneff]

People shaping our world.

[Michael Balbaro]

And we'll get some great stories from them, too.

[Matina Stevis-Gridneff]

It's the interview from the New York Times. Listen, wherever you get your podcasts.

[Michael Balbaro]

Here'S what else you need to know. It now appears that despite a polarizing record and a history of unorthodox views, former Democratic Congresswoman Tulsi Gabbard has enough support to become the next Director of National Intelligence. Gabbard's support for Russia, her meeting with Syria's former leader, and her refusal to call Edward Snowden a trait have alarmed Senate Republicans. But on Monday, Gabbard won the support of moderate Republican Senator Susan Collins of Maine, who, along with Republican Senator James Lankford of Oklahoma, had previously expressed skepticism of Gabbard. With both senators now expected to back her. Gabbard's confirmation is all but assured, and Secretary of State Marco Rubio has unveiled plans to restructure and potentially abolish the US Agency for International Development, the lead US Agency for humanitarian assistance, which has become a target of Elon Musk's sweeping campaign of cost cutting over the past few days. The White House has suspended several of USAID's senior leaders, and the agency's workers were told not to come to the office on Monday. As of now, Rubio said that he was the agency's acting director. Musk's plans for the agency and his aggressive tactics across the federal government will be the subject of tomorrow's show. Today's episode was produced by Carlos Prieto and Rob Sipko. It was edited by Maria Byrne and Lisa Chow, contains original music by Diane Wong and Pat McCusker and was engineered by Alyssa Moxley. Our theme music is by Jim Runberg and Ben Landsberg of Wonderly. That's it for the Daily I'm Michael. See you tomorrow. This podcast is supported by Meta.

[Matina Stevis-Gridneff]

Open source AI is available to all, not just the few. Meta's open source is free to use, enabling startups like Xaron to innovate. Here's CEO and co founder Dr. Cal Clark.

[Michael Balbaro]

We've built a tool with Llama Meta's.

[Ana Swanson]

Open source AI model to help radiologists.

[Michael Balbaro]

Double check their diagnoses.

[Matina Stevis-Gridneff]

We're able to collaborate with universities to.

[Michael Balbaro]

Further radiology education and catch more errors.

[Matina Stevis-Gridneff]

Learn how others are building with Meta's free open source [e-mail] open.