When U.S., Mexican and Canadian soccer officials fanned out across the globe
nearly a decade ago to sell the 2026 World Cup, they traveled in threes — one
representative from each country — to underscore a simple message: North
America’s three largest countries were in lockstep.
“It was so embedded into everything we did that this was a united bid. Our
success was tied to the joint nature of the bid. That was the anchor regarding
the premise of what we were trying to do,” said John Kristick, former executive
director of the 2026 United Bid Committee.
The pitch worked. In 2018, FIFA members awarded the tournament to North America,
marking the first time three countries would co-host a men’s World Cup. Bid
strategists were delighted when The Washington Post editorial page approvingly
called it ”the NAFTA World Cup.”
The North American Free Trade Agreement is no more, a victim of President Donald
Trump’s decision to withdraw during his first term, and the successor
U.S.-Mexico-Canada Agreement is now teetering. At almost exactly the midway
point of the 39-day tournament, trade ties that link the three countries’
economies will expire.
The trilateral relationship is more frayed than it has ever been, tensions
reflected in this year’s World Cup itself. Instead of one continental showcase,
the 2026 World Cup increasingly resembles three distinct tournaments, with
different immigration regimes, security plans and funding models, all a function
of different policy choices in each host country. Soccer governing body FIFA “is
the only glue that’s holding it together,” said one person intimately involved
in the bid who was granted anonymity to speak candidly about the sensitive
political dynamics.
The “United” in the United Bid, once the anchor of the entire project, now
competes with three national agendas, each running on its own track. POLITICO
spoke to eight people involved in developing a World Cup whose path from
conception to execution reflects the crooked arc of North American integration.
“When these events are awarded, they’re concepts. They’re ideas. They feel
good,” said Lee Igel, a professor of global sport at NYU who has advised the
U.S. Conference of Mayors on sports policy. “But between the award and the event
itself, the world changes. Politics change. Leaders change.”
THE TRUMP TOURNAMENT
At the start of the extravagant December event that formally set the World Cup
schedule, Trump stood next to Mexican President Claudia Sheinbaum and Canadian
Prime Minister Mark Carney to ceremonially draw the first lottery ball. FIFA
officials touted the moment at the Kennedy Center as a milestone: the first time
the three leaders had appeared together in person, united by soccer.
The trio also met for 90 minutes off stage in a meeting — facilitated by FIFA as
part of World Cup planning.
That novelty was notable. While each national government has named a “sherpa” to
serve as its lead, those officials — including Canadian Secretary of State for
Sport Adam van Koeverden and Mexican coordinator Gabriela Cuevas — have met only
a handful of times in formal trilateral settings. At a January security summit
in Colorado Springs, White House FIFA Task Force director Andrew Giuliani did
not mention Canada or Mexico during his remarks. Only when FIFA security officer
GB Jones took the stage was the international nature of the tournament
acknowledged.
“We have been and continue to work very closely with officials from all three
host countries on topics including safety, security, logistics, transportation
and other topics related to hosting a successful FIFA World Cup,” a FIFA
spokesperson wrote via email. “This is one World Cup presented across all three
host countries and 16 host cities, while showcasing the uniqueness of each
individual location and culture.”
The soccer federations behind the United Bid have been largely sidelined, with
FIFA — rather than national governments — serving as the link between them. It
has brought personnel of local host-city organizing committees for quarterly
workshops and other meetings, and situated nearly 1,000 of its own employees
across all three countries, according to a FIFA spokesperson who says they are
“working seamlessly in a united effort.” (The number will swell to more than
4,000 when the tournament is underway.)
But those FIFA staff are forced to navigate wildly varied fiscal conditions
depending on where they land. Mexico, which will have matches in three cities,
has imposed a tax exemption to stimulate investment in the World Cup and related
tourist infrastructure in its three host cities. The Canadian government has
dedicated well over $300 million to tournament costs, with more than two-thirds
going directly to host-city governments.
“The federal government are contributing significantly to both Vancouver and
Toronto in terms of funding,” said Sharon Bollenbach, the executive director of
the FIFA World Cup Toronto Secretariat, which unlike American host committees is
run directly out of city hall.
American cities, however, have been left to secure their own funding, largely
through the pursuit of commercial sponsorships and donations to local organizing
committees. Congress has allocated $625 million for the federal government to
reimburse host cities in security costs via a grant program. But the partial
government shutdown and an attendant decision by Homeland Security Secretary
Kristi Noem to stop approving FEMA grants is exacerbating a logjam for U.S.
states and municipalities — including not only those with World Cup matches but
hosting team training camps — that rely on federal funds to coordinate
counterterrorism and security efforts.
That has left American host cities in very different financial situations just
months before the tournament starts. Houston and Dallas-area governments can
count on receiving a share of state revenue from Texas’ Major Events
Reimbursement Program. The small Boston suburb of Foxborough, Massachusetts,
however, is refusing to approve an entertainment license for matches at Gillette
Stadium because of an unresolved $7.8 million security bill.
Because of the budget squeeze, American cities have cut back on “fan festival”
gatherings that will run extend during the tournament’s full length in Canadian
and Mexican cities. Jersey City has canceled the fan fest planned at Liberty
State Park in favor of smaller community events, and Seattle’s fan fest will
be scaled down into a “distributed model” spread cross four locations.
The tournament has become tightly intertwined with Trump, as FIFA places an
outsized emphasis on courting the man who loves to be seen as the consummate
host. Public messaging from the White House has focused almost exclusively on
the United States’ role, and Trump rarely mentions Canada or Mexico from the
Oval Office or on Truth Social.
Since returning to office, Trump has had eight in-person meetings with FIFA
President Gianni Infantino — besides the lottery draw at the Kennedy Center —
whereas Sheinbaum and Carney have only had one each. While taking questions from
the media during a November session with Infantino in the Oval office, Trump did
not rule out the use of U.S. military force, including potential land actions,
within Mexico to combat drug cartels.
Guadalajara, which is set to host four World Cup matches, this weekend erupted
in violence after Mexican security forces killed the head of a cartel that Trump
last year labeled a “foreign terrorist organization.” A White House spokesperson
wrote in a social-media post that the United States provided “intelligence
support” to the mission.
It is part of a more significant set of conflicts than Trump had with the United
States’ neighbors during his first term. In January, Trump claimed that
Sheinbaum is “not running Mexico,” while Carney rose to office promising
Canadians he would “stand up to President Trump.” Since then, Trump has
regularly proposed annexing Canada as the 51st state, as his government offers
support to an Alberta separatist movement that could split the country through
an independence vote on the province’s October ballot.
The July 1 renewal deadline for the five-year-old USMCA has injected urgency
into relations among the three leaders. Without an extension, the largely
tariff-free trade that underpins North America’s economy would come into
question, and governments and businesses would begin planning for a rupture.
Trump, who recently called the pact “irrelevant,” has signaled he would be
content to let it lapse.
Suspense around the free trade zone’s future will engulf preparations for the
World Cup, potentially granting Trump related in unrelated negotiations.
“In the lead-up to mega-events, geopolitical tensions tend to hover in the
background,” Igel said. “Once the matches begin, the show can overwhelm
everything else, unless something dramatic like a boycott intervenes. But in the
months before? That’s when you see the friction.”
THE ORIGINS OF THE UNITED BID
It was not supposed to be this way. When North American soccer officials first
decided, in 2016, to fuse three national campaigns to host the World Cup into
one, they saw unity as the strategic advantage that would distinguish their bid
from any competitors.
Each country had considered pursuing the World Cup on its own. Canada, looking
to build on its success as host of the 2015 Women’s World Cup, wanted to host
the larger men’s competition. Mexico, the first country to host it twice, wanted
another shot. The United States dusted off an earlier bid for the 2022
tournament, which was awarded to Qatar.
Sunil Gulati, a Columbia University economist serving as the U.S. Soccer
Federation’s president, envisioned an unprecedented compromise: Instead of
competing with one another they would work together — with the United States
using its economic primacy and geographical centrality to ensure it remained the
tournament’s focal point.
The three countries’ economies had been deeply intertwined for nearly a
quarter-century. Their leaders signed NAFTA in 1992, lowering trade barriers and
snaking supply chains across borders that had previous isolated economic
activity. But the trade pact triggered a broad backlash in the United States
that allied labor unions on the left and isolationists on the right. That
political disquiet exploded with the candidacy of Donald Trump, who called NAFTA
“the worst trade deal” and immediately moved to renegotiate it upon taking
office.
Gulati, meanwhile, was pitching Emilio Azcárraga Jean, CEO and chair of Mexican
broadcaster Grupo Televisa, and Canada Soccer President Victor Montagliani, on
his own plan for regional integration. They agreed to sketch out a tournament
that would have 75 percent of the games held in the U.S. with the remainder
split between Canada and Mexico.
“I’d rather have a 90 percent chance of winning 75 percent of the World Cup than
a 75 percent chance of, you know, winning all of it,” Gulati told the U.S.
Soccer board, according to two people who heard him say it.
Montagliani and Mexico Football Federation President Decio de María joined
Gulati to formally announce the so-called United Bid in New York in April 2017.
The three federation presidents knew that the thrust of their pitch had to be
more emotional and inclusive than “we are big, rich and have tons of ready-built
stadiums,” as one of the bid organizers put it. Kristick laced a theme of
“community” through the 1,500-page prospectus known to insiders as a bid book.
“In 2026, we can create a bold new legacy for players, for fans and for football
by hosting a FIFA World Cup that is more inclusive, more universal than ever,”
declared a campaign video that the United Bid showed to the organization’s
voting members. “Not because of who we are as nations, but because of what we
believe in as neighbors. To bid together, countries come together.”
It was a sentiment increasingly out of sync with the times. The same month that
Gulati had stood with his counterparts in New York announcing the joint bid,
Trump was busy demanding that Congress include funding for a wall along the
border with Mexico. He told then-Mexico President Enrique Peña Nieto and
then-Canadian Prime Minister Justin Trudeau that he wanted to renegotiate NAFTA,
using aluminum and steel tariffs as a cudgel.
Carlos Cordeiro, who displaced Gulati as U.S. Soccer president during the bid
process in 2018, became the driving force of the lobbying effort to sell the
idea to 211 national federations that would vote on it. In Cordeiro’s view,
according to two Americans intimately involved in the bid at the time, the bid’s
biggest challenge was assuring voters that the tournament would be more than a
U.S. event dressed up with the flags of its neighbors.
Teams fanned out across each of soccer’s six regional confederations to make
their pitch, each presentation designed to paint a picture of tri-national
cooperation, and returned to a temporary base in London to debrief.
“It was very pragmatic. It was like Carlos, or another U.S. representative,
would say this and talk about this. The Canada representative will then talk
about this. The Mexico representative will talk about this. And it was very much
trying to be even across the three in terms of who was speaking,” one person on
the traveling team said.
When the United Bid finally prevailed in June 2018, defeating a rival bid from
Morocco, Trump celebrated it as an equal triumph for the three countries.
“The U.S., together with Mexico and Canada, just got the World Cup,” he wrote on
Twitter, now known as X. “Congratulations — a great deal of hard work!”
THREE DIFFERENT TOURNAMENTS
What began with a united bid is turning into parallel tournaments: with
different fan bases, security procedures and off-field programs, all a function
of different policy choices in each host country.
Fans from Iran and Haiti are barred from entering the United States under travel
restrictions imposed by Trump, while other World Cup countries are subject to
elevated scrutiny that could block travel plans. (Official team delegations are
exempt.) Canada and Mexico do not impose the same restrictions, creating uneven
access across the tournament: fans traveling from Ivory Coast will likely find
it much easier to reach Toronto for a June 20 match against Germany than one in
Philadelphia five days later against Curaçao.
“FIFA recognizes that immigration policy falls within the jurisdiction of
sovereign governments,” read a statement provided by the FIFA spokesperson.
“Engagement therefore focuses on dialogue and cooperation with host authorities
to support inclusive tournament delivery, while respecting national law.”
A fan who does cross borders will encounte a patchwork of security régimes
depending on which government is in charge. Mexican authorities draw from deep
experience policing soccer matches, with a mix of traditional crowd-control
tactics and advanced technology like four-legged robots. The United States
is emphasizing novel drone defenses and asked other countries for lists of its
most problematic fans.
Ongoing immigration enforcement actions in the U.S. have also prompted concern
among the international soccer community and calls for a boycott of the
tournament. The White House this month issued clarifying talking points to host
cities to buttress the “shared commitment to safety, hospitality, and a
successful tournament experience for all.” The document confirms that U.S.
Customs and Border Protection and Immigration and Customs Enforcement “may have
a presence” at the tournament to assist with non-immigration-related functions
like aviation security and anti-human trafficking efforts.
No where is the fragmentation more glaring among countries than on human rights.
After previous World Cups were accused of “sportswashing” autocratic regimes in
Qatar and Russia, the United Bid made “human rights and labor standards” a
centerpiece of its proposal to FIFA. The bid stipulated that each host city by
August 2025 must submit concrete plans for how the city would protect individual
rights, including respect for “indigenous peoples, migrant workers and their
families, national, ethnic and religious minorities, people with disabilities,
women, race, LGBTQI+, journalists, and human rights defenders.”
“Human rights were embedded in the bid from the beginning,” said Human Rights
Watch director of global initiatives Minky Worden, who worked closely with Mary
Harvey, a former U.S. goalkeeper and soccer executive who now leads the Centre
for Sport and Human Rights, on the language. Harvey consulted with 70
civil-society groups across the three countries while developing the strategy.
That deadline passed without a single U.S. city submitting their plan on time.
Now just months before the kickoff, host cities have finally started to release
their reports, creating a patchwork of approaches. While Vancouver’s report
makes multiple references to respecting LGBTQ+ populations, Houston’s has no
mention of sexual orientation and identity at all.
The FIFA spokesperson says the organization has embedded inclusion and human
rights commitments directly into agreements signed by host countries, cities and
stadium operators, and that dedicated FIFA Human Rights, Safeguarding and
Anti-Discrimination teams will monitor implementation and hold local organizers
to account for violations.
“All of these standards were supposed to be uniform across these three
countries,” said Worden. “It wasn’t supposed to be the lowest common denominator
with the U.S. being really low.”
Tag - NAFTA
With a roar of rockets and bombs, a gasp of international outcry and the death
of Iran’s supreme leader, President Donald Trump’s legacy became clearer than
ever.
He is burying the 20th Century: Its villains, its alliances, its political norms
and ceasefires. And he is unleashing a future of uncertainty and disruption with
no new equilibrium in sight.
Across both his terms as president, and in so many different areas of policy and
governance and culture, his signal achievements have been acts of demolition.
His Supreme Court appointees struck down Roe v. Wade, ending the seething
political and legal stalemate on abortion rights that governed America since the
1970s.
His military interventions in Latin America have brought the Cuban government,
one of the last surviving Cold War regimes, to the brink of collapse.
His tariffs and trade threats have blown apart the Reagan-Clinton policy
consensus on free trade, upending half a century of global commercial
arrangements and diplomatic relations.
His America First worldview and contempt for Europe’s political establishment
have increasingly relegated NATO’s charter, the 1949 accord forging the globe’s
most powerful military alliance, to antique status.
His acts of corporate favoritism and personal enrichment, and his use of the
justice system as a weapon of vengeance, have erased the post-Watergate regime
of legal and ethical norms for the presidency.
And in the first few hours of war in Iran, Trump’s attack killed the enduring
leader of the 1979 Iranian revolution, Ali Khamenei, a dictator as cruel as he
was ancient.
In every instance, Trump’s allies and admirers say he is completing the
unfinished business of a generation: doing the work that other American leaders
have been too weak or too conventional or too unpatriotic to do themselves.
In each case, too, Trump is tearing down old structures and systems without a
vision for replacing them. At age 79, Trump is himself a creation of the age he
is now unwinding, with a worldview molded in America’s prosperous, socially
turbulent decades after World War II. It is not evident that he’s interested in
designing the grand policies of the future.
Even if Trump had a modernizer’s imagination, there is not too much time left
for him to build a new world. Trump has about 35 months left as president –
about as long as it takes to make one major motion picture – and just eight
months before a midterm election that could sap his power.
It is not likely that before he leaves office we will see a stable global trade
order, thriving new governments in Havana and Tehran or a post-NATO order of
international security that reflects America’s overdue destiny as a Pacific
nation.
It is harder, still, to imagine that Trump might help lead a hard process of
legislative compromise on other issues that have been intractable for decades,
like abortion or the national debt — though he may be the one president who
could force a grand bargain on immigration.
Trump’s opponents have often criticized him for his vacant sense of history: his
too-hasty dismissal of 20th Century achievements like NATO and NAFTA and START,
his middle school-level commentary on figures like Abraham Lincoln and Andrew
Jackson, his weird public musings about Frederick Douglass being recognized more
and more.
This philistinism and historical ignorance was at the heart of Joe Biden’s case
against Trump. Biden deplored Trump as an insult to the American political
tradition and promised to make Washington work, repair broken norms and turn
over power to the next generation. His slow-moving, self-admiring, politically
dysfunctional administration achieved none of these things.
If there was a chance then to build a bridge to the 20th Century, Biden lost it.
The next time the country chooses a replacement for Trump, resurrecting the past
won’t even be an option.
For American policymakers and voters, there’s no longer any prospect of
mimicking détente with regimes in Iran and Cuba that are unraveling at this very
hour. Barack Obama pursued that aim as part of his own 21st Century agenda; that
path is now closed for good.
America’s credibility as a trade negotiator and commercial partner is already
changed forever; the next president will be unable to restore Bush-era trade
relations even if he or she wants to. NATO’s place in the world won’t return to
where it was in 1998 just because the next president says the right words about
Washington’s commitment to its allies.
This is already obvious to leaders looking at the United States from the outside
in.
“We know the old order is not coming back,” Prime Minister Mark Carney of Canada
said at the World Economic Forum last month. His speech, declaring an epochal
“rupture” in geopolitics, was the climactic event of Davos for a reason.
Yet for all Trump’s zeal to crush big institutions and enemies and conventions
of the past, he has also failed so far to lock in an agenda for the future. Many
of his policies — on technology, energy and international security — can be
changed or undone with the stroke of a pen, as Biden’s were. Others, like
Trump’s landmark tax cuts, are unpopular and face a dim fate whenever Democrats
next win power. The variegated coalition that won the 2024 election for Trump,
and raised Republican hopes of a lasting realignment, fractured within months of
his inauguration.
If the 20th Century is finally dead, this country’s trajectory in the 21st is an
immense question mark.
That is the great challenge Trump has left for the next president. For a
visionary successor, it could also be an opportunity unmatched in recent U.S.
history.
BRUSSELS — After close to a decade of talks, the European Union is closing in on
signing a trade deal with Mexico. U.S. President Donald Trump could yet sink
it.
The deal updates a previous free trade agreement from 2000, and was concluded in
January 2025. Trade specialists on both sides have since been casting it in
bullet-proof legal language and translating it into all of the EU’s 24 official
languages. That would pave the way for a signing ceremony: a plum photo op for
Commission President Ursula von der Leyen, Council President António Costa and
Mexican President Claudia Sheinbaum.
The EU-Mexico Modernized Global Agreement, as it is called, should be an easy
win for both sides. It largely excludes the thorny issue of agriculture, and
cements an alliance between wealthy European economies and a populous Latin
American democracy with an enviable geography, straddling both the Atlantic and
Pacific, and sitting just south of the U.S. border.
But the U.S. president remains a wild card. Mexico is the U.S.’s number one
trade partner. Annual trade in goods between the two countries amounts to $840
billion, 10 times Mexico’s trade with the EU. And while Trump has turned his
wrath of late on northern neighbor Canada, he first rode to power on a promise
to build a wall on the Mexican border. He has, since returning to the White
House, imposed extra tariffs and even threatened military strikes against
Mexican drug cartels.
The timing of the revision of the United States-Mexico-Canada Agreement (USMCA)
— the successor of NAFTA — adds another wrinkle. The free-trade deal between the
three North American countries, is up for a review at the start of July. The
Trump administration has made noises that it wants major revisions — or even to
sink it altogether.
Signing a deal with the EU, with all the pomp and fanfare that entails, risks
antagonizing a White House that has made dominating the Western hemisphere under
the “Donroe Doctrine” a strategic priority. One EU diplomat who asked to remain
anonymous said that the Mexican side was slow-walking negotiations precisely for
fear of U.S. retaliation.
More broadly, Trump’s trade agenda is in disarray after the U.S. Supreme Court
last week struck down the sweeping tariffs he imposed last year. Trump has
announced a new, temporary global tariff of 15 percent, under Section 122 of the
Trade Act of 1974. For Mexico, the effective rate would be lower, at 5.2
percent, thanks in large part to the USMCA.
BAD TIMING
The updated EU-Mexico agreement has had a difficult birth.
The two sides first announced that they had reached an agreement in 2018. But
the change of the government in Mexico with the election of the left-nationalist
Morena party, led by Andrés Manuel López Obrador, reset talks. Obrador had made
state control of energy utilities a key plank of his program, requiring a new
round of negotiations. But in January last year, the EU announced once again
that the two sides had reached a deal.
The revised agreement clears the way for more integration of Mexico’s
manufacturing-heavy economy with European industry, particularly in the
automotive sector. It also paves the way for more European investment in
Mexico.
For Mexico, it would be one way to lessen its overwhelming dependency on the
U.S. economy. But it’s that same dependency makes the revised deal delicate.
“The U.S. is an important variable for trade for every country, but for Mexico
it’s a crucial partner,” said Renata Zilli, a researcher at think tank European
Centre for International Political Economy who is based in Mexico City.
Zilli explained that, over the past three decades, Mexico had deepened its
integration in the U.S. supply chain. American businesses had taken advantage of
lower salaries to open up factories south of the border which then shipped
everything from car and airplane parts, to toasters and refrigerators, back to
the U.S.
The end result had been respectable growth and a more industrialized economy
compared with commodity-heavy South American economies. But it’s also left
Mexico increasingly dependent on the U.S.
Trump has in his second term, meanwhile, amped up the hostile rhetoric, with
threats of military action against drug cartels south of the border, something
that would precipitate a political crisis. The capture of Venezuelan leader
Nicolás Maduro by U.S. special forces has further escalated tension in the
region.
“There’s a mixed agenda on security issues, on fentanyl. This complicates a lot
the trade agenda,” said Zilli. “Our priority is trying to manage the
relationship with the U.S.”
The exact timing of a signature remains unclear. One person familiar with the
negotiations, and who asked to remain anonymous, says that the two sides are
aiming to get a deal done by the end of June. Meanwhile, the USMCA agreement is
up for revision in July.
Juan Carlos Baker, former Mexican vice minister of trade who is now an academic
specializing in international trade at the Panamerican University, said signing
the modernized agreement sooner rather than later could benefit Mexico,
precisely by showing the Trump administration that the country has other
friends.
“What we need to do is expand our options,” said Baker, who helped negotiate the
agreement before the election of Morena. He said that he believed that there in
the end, the U.S. would ratify an updated USMCA.
“It’s just posturing,” added Baker. “We buy the most and sell them the most. If
you take Mexico out of the supply chain, you take the wheel off the car.”
President Donald Trump has settled on tariff rates for most of the country’s
largest trading partners. The rest of the world stands in limbo.
A White House official confirmed that Trump plans to sign new executive orders
on Thursday imposing higher tariff rates on several countries that have been
unable to reach negotiated trade agreements by his self-imposed Friday deadline.
It could include a number of America’s biggest trading partners, including
Canada, Mexico and Taiwan. That’s sent their leaders, as well as officials from
other sizable economies scrambling to try and secure a last-minute deal or
extension — although most are downbeat about that prospect.
“U.S. trade negotiators are squeezing Taiwan like a lemon,” said a person
familiar with U.S.-Taiwan trade talks granted anonymity because of their
sensitivity. “The U.S. wants it all in terms of access to Taiwan’s markets.”
Unlike with his previous tariff deadlines, the White House insists Trump will
follow through this time, and not issue another extension, which he’s done twice
since first rolling out his “reciprocal” tariffs on dozens of trading partners
on April 2.
“THE AUGUST FIRST DEADLINE IS THE AUGUST FIRST DEADLINE — IT STANDS STRONG, AND
WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!” Trump posted on his social media
platform, Truth Social, on Wednesday.
Later Wednesday, the president made a dizzying series of other trade moves,
rolling out executive orders raising tariffs on Brazil to 50 percent, setting
new tariffs on semi-finished copper products and ending a tariff exemption for
low-value packages from overseas. He also announced a preliminary agreement with
South Korea, setting duties on the country’s products to 15 percent in exchange
for pledges to invest more than $350 billion in the U.S., purchase more than
$100 billion worth of U.S. energy and lower tariff barriers.
He announced another agreement with Pakistan, “whereby Pakistan and the United
States will work together on developing their massive Oil Reserves,” though he
didn’t say anything about lowering their tariff rate.
The president has already used the threat of steep new tariffs to reach
preliminary trade and investment agreements with Japan, the European Union, the
United Kingdom, South Korea and several fast-growing Southeast Asian countries,
setting rates between 15 percent and 20 percent. The administration has also
maintained a detente with China, although Trump has yet to decide whether to
extend a separate, Aug. 12 deadline for duties to spike back up to around 80
percent.
The president plans to sign new executive orders by midnight Thursday to impose
those agreed upon duties and avoid tariffs snapping back to the original levels
he announced back in April, the White House confirmed. It’s not yet clear, the
official said, whether Trump will hold a public event to declare victory in the
global trade war he launched months ago or simply sign the new executive orders
in private before they are released.
In interviews, officials and representatives from six countries that have not
yet struck an agreement with the president to lower their April 2 rates said
they are pessimistic they will be able to finalize a deal between now and then,
despite concessions they’ve offered to the administration. All of them said that
the higher tariff rates would be punishing for businesses in their countries
that rely on exports to the U.S.
“There’s not a hell of a lot they can do,” said Mark Linscott, a former U.S.
trade negotiator. “I mean, if you’re too small to be given the attention to try
to negotiate a lower tariff, you’re kind of stuck with just taking what the
administration dishes out and then after that, seeing how you can mitigate
that.”
Treasury Secretary Scott Bessent on Tuesday echoed that scenario, though he
sought to play down the impact.
“I would think that it’s not the end of the world if these snap back tariffs are
on for anywhere from a few days to a few weeks, as long as the countries are
moving forward and trying to negotiate in good faith,” Bessent said in an
interview on CNBC.
Trump briefly imposed “reciprocal” tariffs of between 10 and 50 percent on
nearly 60 trading partners in early April, before pausing them for 90 days. He
then extended the deadline from July 8 to Aug. 1, while sending letters
threatening different — and in some cases, even steeper duties — to more than
two dozen partners. Thirty-two of the countries that were initially hit with the
duties in April did not receive a letter from Trump.
On Wednesday morning, Trump announced he plans to impose a 25 percent tariff on
Indian goods, which did not initially receive a letter setting a tariff rate. In
true Trumpian fashion, he later suggested there may still be some negotiating
wiggle room with New Delhi before Friday.
Another 22 countries received a letter setting new tariff rates effective Aug. 1
and don’t appear on track to make a deal. The list includes major trading
partners whose negotiations with the Trump administration have stalled,
including Taiwan, and smaller countries facing soaring tariff rates as high as
50 percent, like Lesotho and Madagascar.
It also includes the two countries the United States trades with most — North
American neighbors Canada and Mexico. Canadian Prime Minister Mark Carney sent
his top aide and other leading trade officials to Washington for talks this
week. And Mexican President Claudia Sheinbaum said earlier this week that she
still hoped to reach an agreement by Friday. But “it’s extremely wishful
thinking,” said Pedro Casas Alatriste, the executive vice president and CEO of
the American Chamber of Commerce in Mexico, though he added, “I still have a
little percentage of hope that something might happen.”
The lack of urgency stems in large part from the fact that most products coming
from Canada and Mexico currently do not face a tariff if they’re compliant with
the U.S.-Mexico-Canada Agreement, a renegotiated version of the NAFTA trade deal
that Trump signed during his first term.
“Canada has a very important USMCA exemption that is in the self-interest of the
U.S. to maintain and could give Canada a bit more breathing room to work toward
the right deal versus a rush deal,” said one Canadian official.
White House officials have been candid that they are primarily focused, at this
point, on negotiating deals with a handful of big countries, while dictating new
tariff rates to the rest of the world.
“We’re now negotiating with various other countries and the rest we’re just
sending out the bill to, the bill, we send a letter saying you pay a certain
tariff,” the president told reporters Wednesday at the White House. “Obviously
that’s most of them because you have, as you know, hundreds of countries, a lot
of countries out there.”
But negotiations with some major economies have bogged down.
Trade negotiators for Taiwan have been working for months to try to stave off
a 32 percent tariff, pursuing a two-pronged strategy of trade talks backed by
pledges to ramp up purchases of U.S. products including agricultural
commodities, liquified natural gas and weapons to reduce its $73 billion trade
deficit with the U.S. Talks continue this week in Washington but so far there’s
been no breakthrough
That places Taiwan’s President Lai Ching-te in a position of political double
jeopardy — submit to onerous trade terms and risk blowback from key segments of
his constituency or refuse the administration’s terms and risk alienating Trump
at a time when it faces a potential Chinese invasion risk as early as 2027. “For
Taiwan the danger of displeasing Donald Trump is existential,” said the person
familiar with those negotiations.
“I think every leader is facing this dilemma of negotiating directly with the
president and anticipating that he will push for further concessions than what
have been discussed at the negotiator level,” Linscott said. “And, if a deal is
struck, [Trump] will then make some pretty substantial claims in terms of what
the U.S. got.”
The Trump administration’s justification for hiking tariff rates up to 50
percent on some countries is based on the fact that the U.S. buys far more from
those places than it sells to them. That’s a challenge for tiny countries like
Lesotho and Madagascar in southern Africa, which send textiles to the U.S.
through the African Growth and Opportunity Act, but import little in the way of
American goods.
It’s also presented problems for larger trading partners like Switzerland, whose
government does not impose duties on U.S. industrial products but has a large
trade imbalance because of the all the pharmaceuticals, high-end machinery and
other Swiss goods it sells in the U.S.
Rahul Sahgal, the CEO of the American-Swiss Chamber of Commerce, said that many
of the country’s consumer businesses, like the sneaker brand On, haven’t been
deeply harmed by the 10 percent tariff, but that would change if the tariff
jumped to 31 percent, which would be far more difficult for companies to absorb.
While the Swiss have continued to negotiate with the Trump administration,
Sahgal pointed out it would be nearly impossible for the country’s population of
just 8.8 million people — about the number of people living in New York City —
to consume enough American imports to rebalance the two countries’ trade
relationship.
“Even if we were to eat a steak every day and every third, drink a bottle of
bourbon and buy a Harley Davidson, it would hardly change the trade balance,”
Sahgal said.