Trump triggers trade turmoil with new tariffs on Canada
Donald Trump announced new tariffs on Canada, including a 250 per cent tax on dairy products. "It's yet another twist in a serpentine trade policy that seems to shift on an hourly basis," writes CNN. The President of the USA had earlier decided to suspend the second tranche of fees for Canadian goods.
The President of the USA Donald Trump on Friday, 7th March, announced plans to introduce new tariffs on Canadian products, including timber and dairy products. This would happen within a few days.
In his Friday address at the White House, Trump stated that Canada has been "cheating" the United States for years regarding timber and dairy products. He pointed to the Canadian tariff of about 250 per cent on American dairy products, announcing that the USA would respond in kind.
- We may do it as early as today, or we’ll wait till Monday or Tuesday, but that’s what we’re going to do. We’re going to charge the same thing - said the US President.
Another turn in US trade policy
"Trump’s announcement gave investors, businesses and consumers another strong dose of whiplash. Just one day earlier, on Thursday, Trump announced a one-month pause on all tariffs on Canada and Mexico on products that comply with the US-Mexico-Canada free trade treaty, known as the USMCA. That had, at least temporarily, given many industries, especially autos and agriculture, a major sigh of relief," reports CNN.
The markets reacted to Trump's announcements with declines, although they later partially recovered losses. Michael Block, a market strategist at Third Seven Capital, noted that "the market has trouble digesting Trump's multi-dimensional chess game."
"Layoffs are mounting, hiring is slowing, consumer confidence is eroding and inflation is picking up again. Tariffs could worsen all of those factors," writes CNN, but it also notes that the Canadian fees on US dairy products, including 241 per cent on milk, have long caused dissatisfaction among American farmers.
Trump has also criticized Canadian tariffs on American timber for weeks, asserting that the USA can do without them. However, experts warn that the fees might raise the cost of building homes in the USA, where 30 percent of timber comes from Canada. Currently, there are anti-dumping and countervailing duties of 14.5 percent on it.
