Good morning, and Happy Monday.

Tariffs All the Way Down

It was tariffs all the way down in Washington, Ottowa, and Mexico City this weekend as President Trump’s 25% import taxes kicked in, spurring retaliatory measures from Canada and Mexico.

Meanwhile, in addition to attacking close allies, 10% tariffs were also levied against Chinese imports. [More - Bloomberg]

According to some report, in addition to the tarrifs, de minimus entries and duty drawback rules concerning Chinese imports are being suspended. De minimus rules allow small packages from China to enter the US without duty being paid - this is what the entire dropshipping industry, fast fashion, and half of Amazon stores rely on. So imports to the US are interrupted or more expensive.

Meanwhile, duty drawback allows manufacturers to obtain refunds for duty paid on imported parts that are later exported as whole goods. Meanwhile, the profit margin of the exported item goes down.

I’ll leave the Wall Street Journal to sum this up.

Meanwhile, USAID is the first government department that is coming under the full scrutiny of Elon Musk’s Department of Government Efficiency (DOGE). USAID was hit by the spending freeze early last week and the Agency’s website went dark on Friday. Musk has vowed to kill the agency that is responsible for distributing billions of dollars of aid and life-saving support to countries worldwide. [More - AlJazeera]

Comment - Why USAID has provoked so much anger is unclear. The agency provides an enormous amount of global good, provides the USA with substantial goodwill and is a key lever of America’s soft power. As it only accounts for 0.2% of the federal budget, it will make almost no dent in the trillions Musk hopes to cut from the government, and America will be weaker for the agency’s demise.

Global Stability Ratings

Here are the complete global stability rankings for all countries and territories covered by Decis Intelligence.