Mercifully, Donald Trump waited until after the closing bell on Wall Street to further inflame geopolitical tensions, so I guess market participants owe the President a debt of gratitude for at least holding fire until traders left their desks for the weekend.
As the Turkish lira was collapsing on Friday morning, the President seemingly sensed an opportunity to gain some leverage on Recep Tayyip Erdogan in the battle over North Carolina pastor Andrew Brunson, whose detention on espionage charges is at the center the worst diplomatic row between Washington and Ankara in recent memory.
While Erdogan was busy making the situation immeasurably worse for the lira by regaling crowds with tales of international conspiracies, Trump announced on Twitter that he’s set to double metals tariffs on Turkey in an effort to turn the screws on the Turkish government and secure Brunson’s release. Effectively, Trump’s tweet amounted to a deliberate effort to plunge Turkey into an outright economic crisis in the interest of scoring a “win” over Erdogan who was characteristically defiant, even after the White House’s tariff threat.
That, after a week during which the White House continued to ratchet up trade tensions with China, slapped sanctions on Russia in connection with the Skripal case sending the ruble tumbling, and reimposed financial sanctions on Iran which is suffering from an acute currency crisis of its own.
Given all of that, I suppose it’s only fitting that Trump capped off a week defined by tariffs and sanctions by taking aim at America’s traditional arch nemesis and world renowned bad actor … Canada.
“Deal with Mexico is coming along nicely”, Trump tweeted, seemingly out of the blue just after 7 PM in New York. He also called Andres Manuel Lopez Obrador “an absolute gentleman.”
Of course every Trump tweet that starts on a positive note has to end with a threat and this was no exception.
“Autoworkers and farmers must be taken care of or there will be no deal”, the President continued, before saying this:
Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal!
It wasn’t immediately clear what “cars” he was talking about, but Mexican Economy Minister Ildefonso Guajardo, Foreign Minister Luis Videgaray and Jesus Seade, an Obrador representative, met this week with Robert Lighthizer in Washington. Canada has not participated in the talks.
The “plan” – if that’s what you want to call it – is for NAFTA to remain a three-country deal, but when it comes to getting Canada back in the loop, Trump’s Friday evening broadside won’t help.
It’s also worth noting that some U.S. officials believe Trump’s contentious relationship with Justin Trudeau is in part responsible for Saudi Crown Prince Mohammad bin Salman’s aggressive move to cut diplomatic and trade ties with Canada this week. Canadian officials angered Riyadh by expressing alarm over the arrest of Samar Badawi, the sister of Raif Badawi, a jailed dissident whose plight grabbed international headlines in 2015 and whose wife lives in Canada.