US President Donald Trump became the president who signed the most ‘decrees’ in US history right after the election. Some of the decrees concerning domestic policy were either rejected by the courts or are still in the courts. Finally, a black cat got between him and Musk, who was the closest to the election period. Musk reacted strongly to Trump’s tax reduction bill, which he called the “Beautiful Big Bill”, and the two literally attacked each other on social media. The truth is, I was also curious about how long these two people with mega egos would stay together.

In foreign policy, Trump announced ‘customs duties’ that could have a major impact on a global scale. Trump announced a 25 percent customs duty on Mexico and Canada, and a 125 percent customs duty on China, the countries from which the US imports the most. Countries responded to these decisions of the US with new customs duties on US goods.

The issue was not as easy to solve as Trump thought. The customs duties imposed on both sides started to threaten sectors that had achieved stability in mutual trade. The tariffs imposed by other countries, in contrast to the tariffs that Trump stated were imposed to protect local industry, have put industrial sectors that produce with goods imported from these countries in a difficult situation rather than US companies exporting to these countries.

US agricultural companies in particular have started to lose out in the competition in these countries' markets due to the tariffs applied. Similarly, when demand in other countries decreased due to the high prices of American goods, the US manufacturing and service sectors also began to lose. Most importantly, the new tariffs applied to these countries, from which it imports the most, have caused US consumers to have to buy certain products at higher prices.

All these developments caused Trump to make a 'U-turn' and either stopped the tariffs or reduced them to reasonable levels in return for the US making a trade agreement with all countries. Most recently, on June 9, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer met with Chinese officials in London regarding the trade agreement.

Now it is the turn of Mexico and Canada, the other two important partners of the US economy. Trump’s tariffs will affect the United States-Mexico-Canada Agreement (USMCA), which went into effect on July 1, 2020. The agreement replaced the North American Free Trade Agreement (NAFTA). The USMCA is particularly beneficial for North American workers, farmers, ranchers, and businesses, and aims to create more balanced, reciprocal trade that supports high-paying jobs for Americans and grows the North American economy.

What are the reasons that are driving the US to impose tariffs on key countries in this agreement today? The most important reason Trump focuses on is the trade deficit. The other main factor is Chinese investments in these countries. The Office of the US Presidential Trade Representative submitted a report to Congress last year on the functioning of the US-Mexico-Canada agreement on automotive goods trade. The report called on the US to work closely with Canada and Mexico to carefully examine Chinese investments and determine whether automotive content entering the North American supply chain is linked to state-backed Chinese enterprises.

Trade with Canada and Mexico accounts for nearly 13 million skilled jobs in America. The United States’ continued and strengthened trade with these partners will not only help the United States grow its economy, but will also create jobs for its own citizens. The Mexican-American trade relationship is strong and vital. The bilateral relations between the two countries directly affect the lives and livelihoods of millions of Americans and Mexicans.

The two countries share a 2,000-mile border and have 55 active land ports of entry. More than $1.2 million worth of goods cross the border every minute, making it the world’s busiest border. To be sure, the two countries face significant challenges at the border, including irregular migration, human trafficking, and organized crime. But they also share a unique story. In states like California and Texas, hundreds of thousands of people cross the border every day to work, go to school, visit family, and engage in everyday life.

As of 2023, Mexico has surpassed China to become America’s largest trading partner. Mexico will continue to be the United States’ largest trading partner by 2024. In 2024, total merchandise trade between the U.S. and Mexico reached an all-time high of $839.9 billion. During this period, U.S. exports to Mexico rose to $334 billion, while imports rose to $505.9 billion. This brings the U.S. trade deficit with Mexico to $171.8 billion, more than double the deficit of $77.7 billion in 2018.

Mexico ranks first for the U.S. by import value. China and Canada are the other two in the top three. In terms of export value, Mexico ranks second behind Canada. In addition to growing trade, Mexico is a country where American companies can invest, where global firms can move production, and where a growing trend toward near-sourcing is taking place. Mexican Economy Minister Marcelo Ebrard said that about 400 companies are interested in moving their facilities from Asia to Mexico. Although Ebrard gave a number, Mexico has infrastructure problems. Mexico has not invested in the infrastructure that would allow for the manufacturing boom you see in Asia.

We cannot ignore the common challenges that the two countries face, beyond the migration problem. The climate crisis and extreme weather conditions are affecting agricultural productivity and livelihoods in both countries. Of course, drug trafficking and issues like fentanyl are big factors. The Trump administration is also blaming all three of its major trade partners. The US states that the chemicals used in the production of the drug come from China, that Mexican gangs obtain the drug illegally, and that there are fentanyl laboratories in Canada.

For all these reasons, a strategic approach to US-Mexico relations is important today. The increasing influence of criminal cartels in politics and the economy in Mexico makes a safe, law-based and economically strong Mexico important for US national security. Trump's comments on Canada became a hot topic when he was elected US President. US President Trump has repeatedly argued that Canada should be included in the US as the 51st state. While claiming that Canadians want to be part of the US, Trump has also repeatedly used the term "governor" for the Canadian Prime Minister.

When you look at history, Canada and the US have a unique structure. This relationship has been created by shared geography, similar values, common interests, strong personal connections and multi-layered economic ties. Canada and the US share a land border of approximately 9 thousand kilometers, which is the longest international border in the world. There are 13 US states and seven Canadian provinces along the border.

Canada and the United States are long-standing allies and work closely together in defense, security and trade. The two countries have a deep and long-standing defense and national security partnership. The two countries cooperate closely on global security issues, including in Europe through NATO. They established the North American Air Defense Command (NORAD) in 1958, again in line with NATO’s goals. Today, NORAD is the model for a successful defense partnership. Likewise, China and Russia’s strategic approaches focusing on the Arctic make NORAD even more important.

Following Trump’s accusations against Canada on immigration and drugs, Canada has decided to invest $1.3 billion to increase border security and strengthen its immigration system. The Canadian Border Services Agency announced that it seized more than 52,400 kg of prohibited drugs, cannabis, narcotics and chemicals, more than 930 firearms and 17,200 prohibited weapons in 2024.

Canada and the US have the world’s most extensive trading relationship, supporting millions of jobs in both countries. But Trump’s tariff threats have changed the economic relationship between Canada and the US. Every day, $2.5 billion worth of goods and services cross the Canada-US border. That’s about $1 trillion a year. Canadian companies employ about 900,000 people in the US, and about 8 million US jobs depend on trade with Canada. The US sells more goods to Canada than to any other country, and Canada buys more US goods than China, Japan, France and the UK combined.

Putting that aside, the most important issue between the two countries is Canada’s role in US manufacturing. Approximately 70 percent of the goods Canada exports to the US are used in the production of other goods. We don’t have the chance to evaluate every aspect of the US’s relationship with Canada and Mexico, but the issues we do have show that Mexico and Canada are not partners that can be dispensed with or left to the competition of other countries. The US's share in Canada's exports is 77.6 percent, while its share in Mexico's exports is 79.6 percent. This situation makes these countries economically dependent on the US. Trump's policies pushing these countries to seek alternatives will mean opening up a new area of ​​competition for the US on its continent. Likewise, both countries have decided to strengthen their trade ties with countries other than the US and have turned to diversifying their exports.

The environment created with the two countries has an effect that will directly affect the US economy. The disruptions in the supply chain and the additional costs that will occur will be reflected to consumers as high inflation. The retaliatory tariffs of these two countries will affect US exports, which may slow down the US economic growth.

At the beginning of last month, Trump stated in his meeting with Canadian Prime Minister Carney that he did not see any tension between Canada and Mexico and that they got along very well with the two countries. These statements can be described as a U-turn for now. However, when it comes to Trump, neither of these two countries can predict what they will face next month.

What we have seen for the US after January 20 is that the situation Trump faced after his statements does not match his statements. The feedback from his statements confirms this situation. This process does not seem to change in the coming period. Initiatives similar to the US-UK Trade Agreement will be implemented for Mexico and Canada as well, and the problem will be solved. Canada will be saved from being the 51st State!!!