Vipal Monga
Appearances
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
It's a game of psychology at this point. People are just trying to read Trump because I think everyone realizes in the end that despite the people around him, the only guy who makes a decision is Trump ultimately. So they are trying to use whatever levers they think work with this very complicated man.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
So Canada has taken a very strong position against the tariffs. They've immediately come out of the gate and said they're going to retaliate dollar for dollar. And they're specifically trying to target red states that they feel will hurt Republicans and get those Republicans to talk to Trump and get him to back off. The European Union also has decided to go for retaliatory tariffs.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
And they're making the same calculation as Canada to some extent. They think that Trump is a bully and bullies don't particularly respect people who roll over. So you've got to hit back. Punch him in the mouth is the attitude. And it's early to say whether that works or not. We do know that he's a very emotional leader. And when people do retaliate, he has not reacted well in the past.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
So Mexico also has a lot at stake, in theory as much at stake as Canada does. But Mexico has decided not to retaliate for now. President Claudia Sheinbaum, she's very forceful with Trump apparently in the calls, but extremely respectful when they talk.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
And they've decided not to hit back in the hopes that what they're creating is an environment where Trump goes easier on them when he finally comes out with his full slate of tariffs.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
The UK has a lot at stake because since Brexit, they've been trying to create trade deals with the US, world's largest economy, in a way to help fix their own economic problems.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
It's a game of psychology at this point. People are just trying to read Trump because I think everyone realizes in the end that despite the people around him, the only guy who makes a decision is Trump, ultimately. So they are trying to use whatever levers they think work with this very complicated man. Now, that's in the short term.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
In the longer term, a few of the people I've talked to, particularly in Canada, think that Trump's strategic approach has been terrible. There's a theory that if you cook the frog slowly, they won't notice they're being cooked. But what Trump did was he turned up the heat all the way and the frog is effectively totally cooked.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
And what this has done is made the country's leaders, all of them, focus on things that they've avoided for the past, which is building up their own industrial capacity, building out trade agreements with other countries like Europe. finding other sources for their resources than the United States. So in the longer term, this could really hurt the U.S.
WSJ What’s News
Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War
's position in the world as other countries realize that they need other sources, other markets to look to.
WSJ What’s News
Tariffs on Canada and Mexico Go Into Effect at Midnight, Trump Says
That makes the prospect of adding tariffs to this entire supply chain really frightening for carmakers. And will tariffs be imposed on that part every time it crosses one of those borders? We don't really have any detail on how this actually would play out.
WSJ What’s News
Tariffs on Canada and Mexico Go Into Effect at Midnight, Trump Says
But based on what Trump has said and what we've heard out of our Washington sources is that each time the part crosses the U.S.-Canada border or the U.S.-Mexico border, there would be a 25% tariff on that part. Now, you start off with, let's say, a little part that goes into transmission. That part in itself might be a couple hundred dollars.
WSJ What’s News
Tariffs on Canada and Mexico Go Into Effect at Midnight, Trump Says
That part is added to another piece of equipment that becomes a much more expensive piece of equipment. So you can see how the numbers really add up very quickly.
WSJ What’s News
Tariffs on Canada and Mexico Go Into Effect at Midnight, Trump Says
The integration of the supply chain is something that has taken decades, that won't be very easy to unwind. To be easy to destroy, but to recreate and unwind is a really hard task.
WSJ What’s News
Tariffs on Canada and Mexico Go Into Effect at Midnight, Trump Says
We've been reporting a lot about how tightly integrated the automotive supply chain is across North America. It's Canada, the US, and then Mexico. You cannot make an automobile in North America without parts touching all three of those countries. So, for example, to make a transmission...
WSJ What’s News
Tariffs on Canada and Mexico Go Into Effect at Midnight, Trump Says
What you have to do is send parts from Ontario through Pennsylvania, Ohio, Illinois, and back again, as well as Mexico, before the part is finally installed in a car in Ontario, which is then sold all across the United States. Just that one part goes across the borders six or seven times, depending on how you count.