President Trump has triggered punitive tariffs against Canada, Mexico and China for their role in the manufacture and delivery of fentanyl into the United States while disregarding their responsibility to secure the U.S. border.
In response, Canadian Prime Minister Justin Trudeau announced responsive tariffs against American goods. However, the responsive tariffs are primarily the products that Canada has exploited through the Free Trade Agreement (FTA) loophole.
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It is obvious Canada’s response is in consultation with the U.S. democrats, as is the customary norm for the Trudeau administration.
(Politico) – Canada’s prime minister, Justin Trudeau, on Saturday night made a televised address announcing concrete measures including a tit-for-tat 25% tariff phased in across C$155bn ($107bn) worth of American products. Trudeau said Trump had put at risk US consumers’ and industries’ access to much-needed Canadian critical minerals and resources including oil, energy and timber. The prime minister promised to work with Canada’s provinces to review dealings with the United States.
Addressing Americans, Trudeau said: “Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities. They will raise costs for you including food at the grocery store and gas at the pump. They will impede your access to an affordable supply of vital goods crucial for US security such as nickel, potash, uranium, steel and aluminum.”
Trudeau added: “They will violate the free trade agreement that the president and I along with our Mexican partner negotiated and signed a few years ago” – referring to the United States Mexico Canada agreement (USMCA) that was drawn up largely at Trump’s behest after he tore up the previous North America free trade agreement (Nafta) during his first term as US president. (more)
Keep in mind, through the past 20 years, Canada has essentially shut down their heavy manufacturing while worshipping the climate change agenda of the WEF team. Industrial products from Canada are a fraction of what they used to be. Instead, what Canada now has is an “assembly economy” where they import component parts -mostly from China- and then assemble them into finished goods for distribution into the U.S, a NAFTA and USMCA workaround.
There is no way for Canada to reciprocate at the same level as Team USA; the economy of scale just isn’t in their favor. However, on the automotive side, multiple manufacturers of vehicles (especially Toyota) are reliant upon cross border component auto parts in order to reach the U.S. market.
Both Canada and Mexico are used by China and the EU as an entry point into the U.S. market. Major investments by European auto manufacturers and Chinese companies will be impacted. The agricultural products are essentially moot.
President Trump’s moves on the tariffs are a good start to an economic issue that has gone unaddressed for too long.
President Trump imposed the tariffs under the International Emergency Economic Powers Act, a nearly 50-year law that gives the president sweeping power to impose sanctions after declaring an emergency. No president has previously used the law to impose tariffs, although Trump threatened to use it against Mexico in his first term and more recently against Colombia when they balked at accepting a planeload of migrants deported by the United States.
