Description
Trump’s attacks first on the North American Free Trade Agreement (NAFTA) during his first presidency, and on NAFTA’s successor, the United States-Mexico-Canada Agreement (USMCA) during his second presidency, dramatically overturned complacent assumptions about the path-dependency of regional agreements. Trump’s initial aspiration was to rip up NAFTA, but he was convinced to renegotiate it (Macdonald 2023). During his second term, however, he doubled down on his weaponization of U.S. trade theory. Since his second election, Trump has employed tariffs and tariff threats within the region to coerce Canada and Mexico to comply with his erratic demands, generate revenues to fund tax cuts, and to encourage uncertainty and incentivize investors to relocate investment to the United States. These efforts conform to a right-wing populist version of neo-mercantilism as well as a neo-imperialist logic. Canada and Mexico have adopted new economic strategies that contain elements of neo-mercantilism but also seek to cling to the old NAFTA/USMCA model, resulting in weak and contradictory policies.
This paper will analyse the economic, political and social assumptions underlying the brand of neo-mercantilism employed by the three North American governments. It will be based on an analysis of government policies as well as statements and social media comments issued by leaders of the three countries and some key economic advisors. Drawing on the classic article by Brenner, Theodore and Peck (2010) on “variegated neoliberalism,” it will argue that neo-mercantilism is similarly variegated, and that different versions of the economic theory are competing and interacting within the North American regional space.
