News Analysis:

“Is Trump serious about tariffs?” This has been the question hanging over not just world markets but the whole world economics.

The popular wisdom had become that he wasn’t really that serious, and the key bit of evidence for that was his appointment of hedge fund investor Scott Bessent as Trump’s preferred Treasury secretary.

The answer overnight, though, was pretty brutal. Yes, he is serious, and in the most unexpected way. By choosing to target Mexico and Canada as well as China, he is confirming threats made on the campaign trial that appeared the most fanciful.

For starters he is willing to blow up the Mexico-Canada America trade deal that he signed in his first term, on day one of his second term. What does a Trump free trade deal even mean now, if the new White House is willing to tariff your country?

And specifically, the rationale for these moves is not mainly or even much about trade or economic policy. These tariffs are about getting Mexico, Canada and China to alter their policies on crackdowns over migration and illicit drugs.