‘We can play the game’: Trump hints at possible tit-for-tat tariff hikes

Washington: US President Donald Trump has said consumers might suffer “pain” from his sweeping tariffs on goods from America’s three biggest trading partners but he said it would be worth it, while indicating he was prepared to escalate the trade war and further target Canada.

The developments came as the new administration and its government efficiency chief, Elon Musk, launched an extraordinary attack on the US’s main foreign aid agency, USAID, which Musk called a “criminal organisation” that “must die”, adding to fears it will be dismantled.

Donald Trump addressing reporters at the White House last week.Credit: AP

Trump said he would discuss the tariffs with Canadian Prime Minister Justin Trudeau and Mexico’s leaders on Monday morning, US time. Talks with Mexico had been “very good”, he said, but he adopted a darker tone on Canada, accusing the US friend and ally of being “very abusive of the United States for many years”.

“If they want to play the game, I don’t mind, we can play the game all they want,” Trump told reporters at the airport after returning to Washington from Florida, hinting at possible tit-for-tit tariff hikes.

The 25 per cent tariffs on imports from Canada and Mexico, and an additional 10 per cent on goods from China, are due to begin on Tuesday (Wednesday AEDT). Trudeau has already ordered matching 25 per cent tariffs on $C155 billion ($170 billion) of US imports, including alcohol, fruit and vegetables, clothes and shoes. Mexican President Claudia Sheinbaum said she would announce her response on Monday (Tuesday AEDT).

While Trump is a long-standing advocate of tariffs, using them as an economic and political tool, he said consumers could face higher prices as a result of the escalating trade war.

Canadian Prime Minister Justin Trudeau immediately imposed retaliatory tariffs.Credit: AP

“This will be the golden age of America,” he posted in all caps on his Truth Social account. “Will there be some pain? Yes, maybe (and maybe not!) But we will make America great again, and it will all be worth the price that must be paid.”

The president also took aim at critiques from orthodox economists, who generally advocate free trade and oppose border taxes. In particular, he attacked the Murdoch-owned, pro-business Wall Street Journal, which carried a blistering editorial at the weekend accusing Trump of starting “the dumbest trade war in history”.

Trump called the newspaper “globalist” and “always wrong”. The White House followed up by highlighting a number of clippings from the past 35 years in which the paper opposed protectionism and backed free trade.

While Trump regularly portrays tariffs as taxes charged to foreign producers, in reality, they are paid by US importers. The costs are mostly passed on to consumers. Other members of Trump’s cabinet also said Americans could face higher prices.

Canada’s opposition leader, Pierre Poilievre, gave his support to dollar-for-dollar retaliatory measures.Credit: Bloomberg

Homeland Security Secretary Kristi Noem sought to blame US trading partners for any cost-of-living increase.

“If prices go up, it’s because of other people’s reactions to America’s laws,” she told NBC’s Meet the Press. “Canada can help us, or they can get in the way, and then they’ll face the consequences.”

Trump mused again on Sunday (Monday AEDT) that Canada should become the US’s 51st state, asserting the northern neighbour would “cease to exist as a viable country” without hundreds of billions of dollars of trade with America, which he portrayed as a subsidy.

“We don’t need anything they have,” he said.

But the response from Canada was uncompromising and bipartisan.

Conservative Party leader Pierre Poilievre, the man expected to become prime minister when elections are held later this year, gave his full support to the retaliatory measures announced by Trudeau, calling for dollar-for-dollar tariffs that would do the most damage to American companies while protecting Canada’s.

“There is no justification whatsoever for [Trump’s] tariffs or this treatment,” Poilievre said.

“Canada will never be the 51st state.”

Canada’s provincial premiers, led by Doug Ford in Ontario, also ordered state-owned liquor retailers and wholesalers to remove US alcohol products from their shelves and catalogues, and sports fans booed the US national anthem at games on the weekend.

Meanwhile, the Associated Press reported the Trump administration had placed two senior officials on leave from USAID after they refused to hand over classified material to inspectors working under the direction of Musk’s so-called Department of Government Efficiency.

Despite its name, DOGE is not a real government department. It has, however, been granted powers by Trump to embark on a series of drastic cost-cutting exercises across the government.

Amid a freeze on foreign aid that has caused chaos for emergency health clinics and humanitarian programs abroad, USAID’s standalone website abruptly disappeared over the weekend.

On Sunday (Monday AEDT), Musk made a barrage of posts about USAID on his social media platform X, calling it “a viper’s nest of radical-left Marxists who hate America” and accusing it of funding bioweapon research “including COVID-19″ (while the CIA now leans towards the theory the virus leaked from a lab in Wuhan, China, there is no suggestion it was deliberate).

“USAID is a criminal organisation,” Musk posted. “Time for it to die.”

Trump issued an executive order on his first day back in the Oval Office initiating a 90-day pause on foreign aid and a review of all spending programs. The order said the US’s foreign aid industry and bureaucracy were “not aligned with American interests and in many cases antithetical to American values”.

Dozens of senior USAID staff have been suspended and Reuters reported hundreds of contractors had been terminated or placed on leave.

Democratic senator Chris Coons said Trump “spent two weeks harassing and laying off USAID employees, and now his team is trying to gut the agency altogether”.

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