WASHINGTON:
Amid escalating trade tensions between the United States and Canada, President Donald Trump has indicated that new tariffs on Canadian dairy and lumber products could be imposed within days. This move follows a previous round of levies aimed at addressing what Trump describes as unfair trade practices.
Since assuming office in January, Trump has implemented a series of tariffs and trade threats targeting both allies and adversaries, including Canada and Mexico, with duties of up to 25% on certain imports. On Thursday, the president offered a temporary exemption for goods from these countries under the North American trade pact, the United States-Mexico-Canada Agreement (USMCA). However, he has pledged to introduce broader “reciprocal tariffs” as early as April 2 to address practices deemed unfair by Washington.
On Friday, Trump hinted that the new tariffs could be announced imminently, stating, “Canada has been ripping us off for years on tariffs for lumber and for dairy products.” He added, “They’ll be met with the exact same tariff unless they drop it, and that’s what reciprocal means.” The president noted that the tariffs could be introduced as soon as Friday or delayed until early next week.
**Economic Concerns**
Economists have warned that widespread tariffs could negatively impact US economic growth, drive up inflation, and dampen business and consumer confidence. Despite these concerns, Trump continued to criticize Canada’s trade practices, saying, “It’s not fair. Never has been fair, and they’ve treated our farmers badly.”
**Potential for Higher Tariffs**
In an earlier interview with Fox Business, Trump suggested that tariffs on Canada and Mexico could increase in the future. When asked if businesses might gain more clarity on his trade policies, he responded, “I think so. But, you know, the tariffs could go up as time goes by.”
White House senior adviser Peter Navarro, in a separate interview with CNBC, dismissed claims of uncertainty surrounding Trump’s trade policies. “The uncertainty is created by the fact that people don’t take President Trump at his word,” Navarro stated.
**Market Reactions and Exemptions**
Trump’s decision to temporarily exempt some tariffs on Canada and Mexico came after stock markets experienced significant declines as the initial 25% tariffs took effect earlier in the week. The White House explained that the adjustments under the USMCA recognize “the unique impact that these tariffs could have on American automotive manufacturers.”
A White House official, speaking on condition of anonymity, revealed that approximately 62% of Canadian imports will still be subject to the new tariffs, though many of these are energy resources facing a lower 10% rate. For Mexico, around 50% of imports will be affected by the levies.
The ongoing trade disputes highlight the complexities of balancing economic interests and diplomatic relationships, as the Trump administration continues to push for what it views as fairer trade practices.
