The New Trade War: How Trump’s Tariffs Are Shaping North America
A new wave of economic uncertainty has hit North America. President Donald Trump’s decision to impose 25% tariffs on Canadian and Mexican goods has sparked swift retaliation. With inflation still a concern, the economic impact remains unclear. But how did we get here?
Chris Zona’s full analysis on the legal foundation of Trump’s new tariffs was published in Law360 and can be read in full here. Zona is a Partner in the Firm’s Litigation Department, Healthcare Litigation Group, and White Collar and Criminal Defense Group.
The Evolution of North American Trade
Trade agreements between the U.S., Canada, and Mexico began in the late 1980s, culminating in NAFTA in 1994. By 2020, NAFTA had been replaced with the USMCA, which built on its predecessor while tightening labor and environmental regulations. Trade flourished, but so did the U.S. trade deficit with its neighbors.
Trump’s Justification for Tariffs
Citing national security concerns, Trump is using the International Emergency Economic Powers Act (IEEPA) to justify the tariffs—a first in its history. Similar strategies have been upheld in court before, but legal challenges could arise.
Negotiation or Economic Warfare?
The tariffs have already prompted Mexico and Canada to bolster border security, leading Trump to pause Mexico’s tariff temporarily. Whether this escalates into a full trade war or leads to another round of renegotiations remains to be seen.