Canada is left out of the most recent round of what may be the largest global trade war in nearly a century, despite U.S. President Donald Trump signing an executive order on Wednesday for global so-called “reciprocal tariffs.”
A White House fact sheet released shortly after Trump announced the policy in the Rose Garden said existing tariffs on Canada and Mexico “remain in effect” — including exemptions — “and are unaffected by this order.”
“This means USMCA compliant goods will continue to see a zero per cent tariff, non-USMCA compliant goods will see a 25 per cent tariff, and non-USMCA compliant energy and potash will see a 10 per cent tariff,” the statement said, using the acronym for the United States-Canada-Mexico Agreement that dictates North American free trade rules, which Canada refers to as CUSMA.
“In the event the existing fentanyl/migration IEEPA orders are terminated, USMCA-compliant goods would continue to receive preferential treatment, while non-USMCA-compliant goods would be subject to a 12 percent reciprocal tariff.”
Under the International Emergency Economic Powers Act (IEEPA), which Trump claims enables him to deploy tariffs to address a national emergency — in this case, the flood of fentanyl into the United States — the current levies on Canada and Mexico were put into effect on March 4.
Trump said that an exception for USMCA-compliant products, including car parts, will expire on Wednesday.
“For Canada and Mexico, the existing fentanyl/migration IEEPA orders remain in effect and are unaffected by this order,” the White House said.
In front of the assembled throng, Trump displayed a chart and declared that China will be subject to a 34% tariff rate, the highest on his list of reciprocal tariffs.
Trump mentioned a list of around 200 countries and trading blocs, including the European Union, Vietnam, India and the United Kingdom, that will be facing the “reciprocal” tariffs.
The list did not, however, mention Canada and Mexico.
According to Trump, the reciprocal tariffs would not be one-for-one but will instead take into consideration the tariffs and other trade restrictions imposed by other nations on American goods, with certain nations being subject to higher duties than others.
According to Trump, the United States is establishing a “minimum baseline tariff rate” of 10%, meaning that every nation that imposes tariffs on American goods will receive a minimum tariff rate of 10% on its goods entering the United States.
“We will charge them approximately half of what they are and have been charging us. So the tariffs will be not a full reciprocal. I could have done that. Yes. But it would have been tough for a lot of countries. We didn’t want to do that,” Trump said.
Trump said his move to launch tariffs would be remembered as “Liberation Day.”
“This is one of the most important days, in my opinion, in American history. It’s our declaration of economic independence,” Trump said.
The U.S. is also launching sector-specific tariffs on vehicle imports, including against cars made in Canada and Mexico.
Trump added, “Effective at midnight, we will impose a 25 per cent tariff on all foreign made automobiles.”
Some of the new rates that the United States will charge other countries include:
- China – 34 per cent
- European Union – 20 per cent
- Japan – 24 per cent
- India – 26 per cent
- Vietnam – 46 per cent
- Israel – 17 per cent
- United Kingdom – 10 per cent
Some of the highest rates of tariffs are being charged against some of the world’s poorest countries, including Bangladesh (37 per cent), Sri Lanka (44 per cent), Laos (48 per cent) and Botswana (37 per cent).
The highest rate, 50 per cent, is being charged to the southern African country of Lesotho.
More to
Come