Canada and Mexico Navigate Trump’s April 2 Tariffs Amid Existing Levies
On April 2, Donald Trump announced reciprocal tariffs impacting several nations but exempted Canada and Mexico, allowing them to avoid the baseline import rates. However, they remain subject to existing tariffs. The USMCA agreement plays a crucial role in their exemption, while both nations prepare countermeasures against ongoing tariffs related to various goods.
On April 2, U.S. President Donald Trump announced a new series of reciprocal tariffs, claiming that the U.S. had been “looted, pillaged, raped, plundered” by other nations. However, Canada and Mexico were notably exempted from these tariffs, enabling them to avoid the starting rate of 10 percent on imports up to 45 percent, which affected other countries.
While the exemption from the April 2 tariffs was a relief for Canada and Mexico, they are still subject to existing tariffs. Canada and Mexico will face ongoing 25 percent tariffs on specific goods related to fentanyl, with Canadian energy imports facing a 10 percent tariff. Furthermore, impending levies on automotive products will soon come into force.
The exemption for Canada and Mexico is largely due to the provisions of the US-Mexico-Canada Agreement (USMCA), which allows for continued tariff-free imports. However, if further agreements regarding tariffs are reached, they will still need to contend with Trump’s new baseline rates. Canadian Prime Minister Mark Carney has indicated a strong stance against the tariffs, stating, “We are going to fight these tariffs with counter-measures. We are going to protect our workers.”
Mexican President Claudia Sheinbaum also plans to provide an official response at an upcoming press conference. It is noteworthy that other countries, such as Russia, Cuba, Belarus, and North Korea, were not included in Trump’s tariff list as they are already under sanctions which hinder any significant trade activity.
The reciprocal tariff rates vary widely for other nations; for instance, India is facing a 26 percent tariff, while the European Union is subject to a 20 percent tariff. Conversely, China is anticipated to encounter a significant 34 percent tariff due to its substantial trade surplus with the U.S.
In conclusion, Canada and Mexico successfully avoided the new reciprocal tariffs introduced by President Trump on April 2, primarily due to existing tariffs and agreements under the USMCA. Despite this exemption, ongoing tariffs will still be applied, particularly on specific goods like automotive products. The responses from leaders in both countries indicate a clear intention to address these trade challenges while also acknowledging the broader context of international trade relations and tariffs.
Original Source: www.hindustantimes.com
