Trump’s Tariff Tantrum: Nickel-and-Diming America into Weakness

How tariffs on key imports like nickel and agricultural products are weakening U.S. economy and defence, while strengthening China’s hold on global supply chains

President Trump’s tariffs—25 per cent on goods from Canada and Mexico, and 20 per cent on those from China—have sparked a range of economic headache. Ontario Premier Doug Ford has pledged to cut off U.S. energy supplies, including critical minerals like uranium, potash, and nickel, which could leave 1.5 million Americans in states like New York, Michigan, and Minnesota without power. Ford pledged to cut off U.S. energy supplies “with a smile on my face”.

Meanwhile, China has imposed tariffs on U.S. agricultural products, hitting farmers hard as they lose access to key markets like China and Mexico. Proposing a retaliatory response of 10-15 per cent tariff on all U.S. agricultural products and foods, from wheat, corn and cotton to soybeans, beef, chicken and dairy.

Midwestern farmers risk losing access to China and Mexico, their largest markets for soybeans and wheat. With USAID shut down by the Trump administration, there’s no backup to purchase surplus commodities for overseas aid.

In this high-inflation environment, things are looking grim. But what’s truly worrying is the impact on nickel, an often-overlooked yet essential metal that’s critical for everything from cars to defence systems. By slapping tariffs on Canadian nickel, the U.S. risks a major self-inflicted wound.

Nickel and National Security: How U.S. Tariffs Could Strengthen China.

How many of you have ever thought about nickel? It’s a metal that’s basically the “reliable sidekick” of the element world. Not as flashy as its big brothers gold or silver, but always there when you need it—whether it’s in your pocket change or in jet engines. It’s tough, rust resistant and has a knack for making superalloys that help your car, plane or even submarine stay in one piece. Frankly, without it we would all be in a serious predicament.

So why is President Donald Trump, who sexually abused the writer E. Jean Carroll, waging a trade war with Canada? After all, while nickel is a critical metal for U.S. defence and manufacturing, America’s supply chain is alarmingly weak. The country has just one operating nickel mine—Lundin’s Eagle Mine in Michigan—and no completed nickel refinery. All of Eagle Mine’s output is exported to a refinery in Sudbury, Canada, before being sold back to U.S. firms.

According to the U.S. Geological Survey (USGS), nearly half (46%) of America’s primary nickel imports between 2019 and 2022 came from Canada. Nickel is primarily used in alloys and steels, electroplating, and other industrial applications, including catalysts and chemicals. In defence, it is indispensable. Nickel-based superalloys make up 50–60% of turbine blades and discs in military jet engines, while warships, submarines, and armoured vehicles rely on nickel-containing stainless steel for durability and corrosion resistance. The metal is also vital for missile guidance systems, ammunition, and other weaponry.

Yet, the U.S. could soon undermine its own supply chain. Canada’s largest nickel mine, Raglan, operates at a total cash cost of $416.47 per ton—far higher than Indonesia’s Sorowako mine, where costs are just $243.30 per ton. If Trump’s trade war results in $260 million in tariffs on Canadian nickel, U.S. manufacturers will likely shift to cheaper Indonesian nickel, much of which is controlled by Chinese companies.

The consequences would be severe: job losses in American car manufacturing, increased dependence on China for a vital strategic resource, and a weakened national defence supply chain. By imposing tariffs on a key ally, the U.S. risks handing China even greater control over an industry essential to both economic and military security.

Trade Wars Are Lost Causes for Three Reasons…

If your goal were to weaken the U.S. economy and defence while eroding public confidence in the MAGA movement, a 25 per cent tariff on Canada would be the perfect strategy.

I have written previously about why tariffs make for bad trade policy, so I will keep this section brief.

Firstly, any tax imposed on imports effectively acts as a tax on exports as well.

Tariffs on imports can have unintended consequences that harm other sectors of the economy. A 25% tariff on Mexican steel and aluminium might seem like a win for U.S. steel manufacturers by reducing competition, but it would also drive up costs for industries that rely on steel, such as carmakers and construction firms. This, in turn, leads to higher prices for consumers and disrupts supply chains.

Moreover, tariffs on imports often trigger retaliatory measures. Mexico, the largest buyer of U.S. corn, could respond with its own tariffs, hurting American farmers by reducing exports and pushing down prices. A similar pattern emerges with beer: a tariff on Mexican-brewed Modelo would not only reduce sales but also harm U.S. barley exports to Mexico.

The bottom line: tariffs on imports act as hidden taxes on exports, creating economic ripple effects that ultimately hurt consumers, manufacturers, and farmers alike.

Secondly, all products are also inputs.

Journalists often focus on how tariffs raise prices on everyday consumer goods, but the biggest economic damage comes in ways most people don’t immediately see.

Take Vitro, Mexico’s largest glass producer. A 25% tariff on its flat glass would drive up costs for construction companies, making new apartments more expensive. Similarly, while most people only think about aluminium in terms of canned goods, tariffs on Mexican or Canadian aluminium would raise costs for airlines, making flights less affordable.

The key lesson: tariffs don’t just affect finished products—they increase costs for industries that rely on those materials, ultimately making life more expensive for consumers in unexpected ways.

Thirdly, American memories might be short, but others will remember their past actions.

Trump’s 2018–2019 trade war with China led Beijing to reduce its economic reliance on the U.S., a shift that has had long-term consequences for American exporters. Despite a 2020 trade truce, China never fulfilled its pledge to increase U.S. imports and instead diversified its trade relationships, particularly with the European Union.

Data from the Peterson Institute for Global Economics shows U.S. exports to China falling behind foreign competitors, with key industries like automobiles, Boeing jets, and semiconductors losing market share. Meanwhile, China has steadily decreased its dependence on U.S. trade, a lesson it learned from past tariff battles.

If history is any guide, other trade partners—like Canada, Mexico, and the EU—will also remember U.S. economic aggression and act in their own long-term interests. MAGA voters may soon realize that in global trade, there are no free punches—and “America First” may ultimately mean “America Alone.”

Key takeaway: Americans might have short memories but the victims of their trade warfare do not, the U.S.A. is burning bridges it will sorely miss in future years and decades.

---

Dean M Thomson is currently a lecturer with Beijing Normal - Hong Kong Baptist University, United International College (UIC).

My work is entirely reader-supported. To receive new posts and support my work, please consider becoming a free or paid subscriber

Alternatively why not make a one-off donation? All support is appreciated