Trump Slaps 35% Tariff on Canada, Threatens More for Other Countries
In a significant escalation of ongoing trade tensions, US President Donald Trump has announced a 35% tariff on Canadian imports, set to come into effect on the 1st of August. The move has prompted the European Union to prepare for a similar announcement expected on Friday.
Background
The imposition of this new tariff follows a series of trade restrictions put in place by the Trump administration, including levies on auto parts and industrial metals. The US president has also hinted at blanket tariffs of 15% or 20% on most other trade partners, including the European Union. This move is seen as a response to the tariffs imposed by Canada, the US's second commercial partner.
Key Developments
Trump announced the new tariff rate in a letter to the Canadian Prime Minister, Mark Carney, stating that the rate would increase if Canada retaliated. He also revealed his administration's plan to start sending letters on Monday to US trade partners, dictating new tariff rates to be imposed on goods they sell to Americans. As Trump put it: “I’m talking European Union, which is, as you know, many countries, and Canada. We’ll be putting them out over the next couple of hours.”
The new tariffs, which come on top of the 25% on auto parts and 50% on steel and aluminum, are intended to pressure nations into securing trade deals with the US. EU and US negotiators met over the weekend, working to strike deals that would help Europe avoid Trump's tariffs.
Implications and Reactions
The escalation of the trade war has raised concerns among trading partners, with many awaiting details on the new tariffs. The EU could learn about Donald Trump’s proposal on tariffs today, after he said overnight a group of US trading partners, including the bloc, would get a letter “today or tomorrow”.
The new levies are seen by some as a punitive measure, with the New York Times stating that at least for now, far more trading partners have gotten stiff tariffs than trade deals.
Conclusion
As the 90-day pause on tariffs set by Trump is due to end on the 9th of July, the world watches and waits. The president's supporters portray him as a top dealmaker, but the recent moves have shown a preference for tariffs over negotiated trade deals. With the new tariffs set to come into effect on August 1st, the implications for global trade remain uncertain.