(Listen to “everyday”: Raise your elbow: Canada’s response to Trump’s trade war)
Next: Ford met with his Washington counterpart along with his new Minister of International Trade, Dominique LeBlanc and his new Minister of Finance, François Philippe Champagne. The message they received was that “the Canadian and other countries with cross-haired hair that President Trump had no way of avoiding new sweep tariffs on April 2.”
(Read: tariff pain first, later trade, the US speaks at a major conference to Canada)
These tariffs will be “mutual.” In other words, the US will apply the same tariffs on exports from Canada where Canada exports from the US.
The first free trade agreement signed under the Trump administration is that because of the USMCA (or Cusma, known as Canada), Canada has relatively few tariffs on US imports besides some of the agricultural products that are part of its supply management system, particularly dairy products. Therefore, in theory, mutual tariffs may be relatively ineffective.
But there are wild cards. Trump sees taxes as tariffs as tariffs, as value-added taxes, such as goods and services taxes, do not apply to exports. This is a view that most trade economists do not share. It is unclear how Trump will do after the GST and how it will affect trade between Canada and the US.
A much larger trade problem could explode on April 2, when Trump stopped 25% tariffs on most Canadian exports and 10% tariffs on energy, a catastrophically and potentially catastrophically halted. (These fees are already levied on Canadian exports that are not certified as compliant with the USMCA North American Content Rules.)
