I strongly suspect that Trump administration officials, in conjunction with Elon Musk, Sam Altman, and other technology leaders, are making extensive use of AI to form their policy and make strategic decisions.

I’ve recently been perplexed by the new policy to charge 25% tariffs on incoming goods from America’s two closest suppliers: Canada and Mexico.

Let’s ask AI

So I decided to put the question to 3 of the most advanced AIs I have access to using their “reasoning” models.

This is the prompt I started with:

A strange situation is unfolding. Donald Trump, now President of the United States, is putting 25% tariffs on goods coming in from its two largest trading partners: Canada and Mexico. On the surface, this doesn’t appear to have any value for the United States. Some have suggested it’s a way to help pay down the US federal debt. Others have suggested it’s a way to take over and absorb these countries. Others think it may simply be a way to “punish” politicians in Canada and Mexico that have opposing political policies. Speculate on the potential long-term benefits from such an odd strategy.

I let it run their full reasoning engine and come up with a long form reply, then I asked for brief, one paragraph summaries, and followed up by generating a list of the top 3 reasons. Here are the results:

gpt-o3-mini-high

“Trump’s strategy of imposing steep tariffs on Canada and Mexico is intended to serve multiple long-term goals despite its risks. By using tariffs as leverage, the U.S. hopes to secure more favorable trade concessions—potentially on issues like border security and immigration—while generating significant federal revenue that could help reduce the national debt. Additionally, these tariffs are expected to encourage domestic manufacturing by shifting production back to the U.S. and, in doing so, realign regional economic relationships and enhance American geopolitical influence. Ultimately, if Canada and Mexico adjust their policies to avoid the penalties, the move could foster a more assertive U.S. economic policy that reshapes trade dynamics in its favor, though such benefits remain highly speculative given the potential for retaliatory measures and global market disruptions.

In summary, the top three reasons are:

  1. Enhanced Negotiation Leverage: The tariffs are used as a bargaining tool to pressure Canada and Mexico into making concessions on border security, immigration, and related policies.
  2. Increased Federal Revenue: By imposing these tariffs, the U.S. aims to generate significant customs revenue that could help reduce the national debt over time.
  3. Promotion of Domestic Manufacturing: The higher cost of imported goods is intended to encourage companies to shift production back to the U.S., thereby strengthening domestic industry and economic resilience.”

Gemini Flash Thinking Experimental 01-21

“While some might argue that long-term benefits of imposing tariffs on Canada and Mexico could include incentivizing domestic production in the US, gaining negotiating leverage for trade deals or political concessions, and addressing perceived trade imbalances, these are highly speculative and debated. Economically, tariffs risk significant harm through higher consumer prices, reduced business competitiveness, retaliatory tariffs, and disrupted supply chains, potentially damaging international relations and creating economic uncertainty. The suggestions that tariffs are intended to pay down US debt, absorb Canada and Mexico, or punish foreign politicians are largely unsubstantiated and unlikely to be effective or realistic long-term strategies, making the overall long-term consequences of such a policy complex and potentially detrimental.

In summary, potential long-term benefits, as argued by proponents, of imposing tariffs on Canada and Mexico could be:

  1. Reshaping North American Supply Chains & Boosting US Manufacturing: Tariffs could incentivize companies to move production back to the US, aiming to strengthen domestic manufacturing, create jobs, and reduce reliance on foreign suppliers.
  2. Negotiating Leverage for Trade & Political Goals: Tariffs could be used as a tool to pressure Canada and Mexico to make concessions on trade agreements, market access, or even broader political issues, potentially achieving more favorable deals for the US.
  3. Addressing Perceived Trade Imbalances & Unfairness: Tariffs could be presented as a way to correct trade deficits and counter perceived unfair trade practices, aiming to create a more “level playing field” for US businesses.”

DeepSeek R1

“The Trump administration’s imposition of 25% tariffs on Canada and Mexico, while risky and controversial, could theoretically yield long-term benefits by incentivizing domestic industry growth, reshoring critical supply chains, and reducing reliance on foreign imports, potentially revitalizing manufacturing sectors and jobs. The tariffs might also serve as leverage to renegotiate trade terms in favor of U.S. interests, such as stricter labor standards or intellectual property protections under agreements like the USMCA, while pressuring neighboring nations to align policies with U.S. priorities. Additionally, protecting industries tied to national security and signaling resolve in trade disputes could enhance economic resilience and global bargaining power. However, these speculative gains depend on avoiding retaliatory measures, managing consumer cost increases, and balancing coercion with diplomacy to prevent trade fragmentation or strained alliances.

In summary, the top 3 potential long-term reasons for imposing tariffs on Canada and Mexico could be:

  1. Revitalizing Domestic Industries: Tariffs might incentivize U.S. manufacturing growth, reduce reliance on imports, and create jobs by making domestic goods more competitive.
  2. Trade Deal Leverage: Aggressive tariffs could pressure renegotiation of agreements (e.g., USMCA) to secure favorable terms on labor, environmental standards, or intellectual property.
  3. Economic Resilience & Strategic Leverage: Protecting critical industries (e.g., energy, tech) and reshoring supply chains could bolster national security and deter foreign unfair trade practices.”

Summary of the summaries

Boiling it all down, all 3 models seem to agree that the primary goals are:

  1. Gaining leverage to renegotiate trade deals, and
  2. Ramping up domestic production

And that the policy will likely achieve those goals.

I guess that looking at it that way, it sort of makes sense.

What do you think? When it comes to geopolitical strategies, could AI already be more effective than human strategists in some ways?

Bonus: Explainer Video

Finally, I’ve used one of my experimental projects to use this analysis to produce an explainer video on this topic:

Double Bonus: What should Canada do?

For extra credit, I asked each model, “If all of this is true, and given that Canada is already in a weakened economic state, what are the top 3 things Canada should do at the Federal level to weather this storm and emerge in better economic condition?”

GPT

“The top three actions Canada should consider at the Federal level are:

  1. Diplomatic Negotiation and Trade Defense: Engage robustly with U.S. officials to negotiate critical exemptions—especially for essential sectors like energy—and leverage international institutions such as the WTO to contest unfair tariffs, thereby mitigating immediate economic damage.
  2. Economic Diversification and New Trade Partnerships: Accelerate efforts to diversify export markets by pursuing new trade agreements with regions like the European Union and Asia, reducing dependence on the U.S. market and cushioning the economy against retaliatory measures.
  3. Targeted Domestic Economic Stimulus: Invest in domestic industries most impacted by the trade conflict through fiscal stimulus, support for innovation and competitiveness, and workforce retraining programs, ensuring that affected sectors can adapt and emerge stronger in the long term.”

Gemini

“Canada could focus on these top 3 federal-level actions:

  1. Diversify Trade Beyond the US: Actively pursue new trade agreements and strengthen relationships with markets in Asia-Pacific, Europe, and other regions to reduce economic reliance on the US and open new growth opportunities.
  2. Invest in Domestic Strengths and Innovation: Strategically invest in key Canadian sectors, foster innovation and technology adoption, develop a highly skilled workforce, and improve internal trade to build a more productive and resilient domestic economy.
  3. Maintain Strategic Trade Diplomacy with the US: Continue dialogue with the US, focusing on mutual interests and advocating for fair trade, while also being prepared to strategically address trade disputes and protect Canadian economic interests.”

DeepSeek

“The top 3 federal priorities for Canada should be:

  1. Diversify Trade Markets: Reduce reliance on the U.S. by expanding exports to the EU, Asia, and emerging economies through new trade deals and export incentives.
  2. Invest in Innovation: Fund R&D, green manufacturing, and high-tech sectors to boost competitiveness and position Canada as a leader in critical industries like renewables and AI.
  3. Enhance Economic Resilience: Modernize infrastructure and upskill workers to lower business costs, attract investment, and prepare the workforce for future industries.”

Retaliation

I asked: >Is retaliation a good strategy?

GPT

“…although retaliation might offer some political leverage, its economic costs and potential to damage long‐term trade relationships typically make it a poor overall strategy.”

Gemini

“…retaliation is a powerful tool in trade policy, but it’s a double-edged sword. It can be effective in deterring unfair trade practices and creating negotiating leverage, but it also carries significant risks of economic harm, escalation, and damaged relationships.”

DeepSeek

“…Retaliation can be a short-term tool to force dialogue, but overuse risks economic and diplomatic fallout.”