Trump's Trade Threats: Canada and the Looming Tariff Deadline

In-Depth Analysis

The USMCA, also known as CUSMA, is an existing trade agreement between Canada, the United States, and Mexico. Trump wants to replace key parts of the agreement. At issue are autos, steel, aluminum and other goods from Canada. The United States has for many decades targeted Canadian softwood as unfair trade because it says the fees that producers in Canada pay to chop down trees on Crown land are too low. It has also repeatedly alleged that Canadian producers are dumping lumber into the U.S. market at below fair value. Without an agreement by Aug. 1, Canadian exports to the U.S. will face an across the board tariff of 35 per cent. Even if this is raised to 35 per cent after Aug. 1, most Canadian products would be exempt. Trump’s targeting of Canada is part of his larger global trade war, which is aimed at reaching deals in which other countries accept more protectionism in the U.S. economy.

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FAQ

What is the key concern for Canadian businesses?

Maintaining the existing exemption from tariffs for goods complying with the Canada-U.S.-Mexico Agreement (CUSMA).

What could happen if no trade deal is reached by August 1?

Trump has threatened a 35% tariff on Canadian goods entering the U.S.

What are Canada's priorities in trade talks?

Removing or reducing Trump’s Section 232 tariffs on Canadian products such as steel, aluminum and autos and prevent further such levies on products such as copper.

Takeaways

The clock is ticking for a new trade deal between the U.S. and Canada.
Businesses should closely monitor the situation and prepare for potential tariff changes.
Keeping the CUSMA exemption is critical for the Canadian economy.
Canada is negotiating to remove or reduce Trump's tariffs on various Canadian products.

Discussion

Do you think a trade deal will be reached by the deadline? Share your thoughts in the comments below! Share this article with others who need to stay ahead of this trend!

Sources

Trump says US may not reach trade deal with Canada Deal or no deal, Trump’s looming 35% tariff has business worried about current exemptions Trump says trade deal with Canada may not be reached

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