Donald Trump Proposes 35% Tariff Increase on Canadian Imports
Recently, it was reported that former President Donald Trump is considering a substantial increase in taxes on imported Canadian goods. Late last week, he made a statement, expressing his intention to impose a hefty 35% tariff on these products starting early next month. This move lands Canada among the list of countries to have recently received a tariff warning from the former president. Starting on the first day of August, these changes are set to be enacted. Through his Truth Social platform, Trump proposed this new tariff, marking a significant escalation from the previous rate of 25% imposed on Canadian imports in February. Furthermore, he also suggested implementing tariffs ranging from 15% to 20% on the majority of other trading partners, a percentage considerably above the current 10% rate set in April’s ‘Liberation Day’ baseline.
During an early Friday segment of CNBC’s ‘Squawk Box’, host Joe Kernen expressed skepticism regarding Trump’s renewed focus on Canadian imports. ‘It appears something has upset him,’ he conjectured, however, he was unable to identify any recent events that might have sparked this new tariff threat. When prompted for a potential reason behind Trump’s sudden decision, the responses showcased a noticeable lack of clarity.
Canadian authorities, towards the end of last month, made a notable announcement. They decided to abolish their digital services tax on American tech giants. This tax was a crucial factor behind Trump’s earlier decision to halt trade negotiations between the US and Canada. With Canada’s move to abolish the tax, it felt as though discussions were warming up again.
In the wake of Trump’s public comments regarding the new tariffs, there was a noticeable decrease in U.S. stock futures as some market participants were spooked. Following a record-setting close on the previous day, the S&P 500 saw a downward trend. Meanwhile, the Dow Jones Industrial Average fell by more than 300 points, representing a decline of 0.7%. The S&P 500 itself declined by 0.6%.
Reacting to the adjusted tariff rate, Canadian Prime Minister Mark Carney expressed defensiveness towards the proposed tariffs late on Thursday. Asserting his government’s commitment to the defense of Canadian workers and businesses, he assured that his government will continue fighting the cause throughout the ongoing discussions, which are due to conclude in early August. In a statement, Carney expressed his country’s desire to preserve lives and safeguard communities on both sides of the border.
Before departing for Texas from the White House on Friday, Trump engaged with the press. He mentioned that he had received a call from Canada, suggesting that his proposition was ‘fairly well received.’ As is common with these matters, Trump maintained an air of suspense about the outcome, stating, ‘We’ll see what happens.’
In light of the looming tariff deadline and the potential effect on international trade relations, Trump had some advice for nations worldwide: ‘Just keep working hard.’ His stance suggested a belief in resilience and hard work during these uncertain economic times.
In an interesting turn, Wall Street investors have coined a new term to symbolize Trump — ‘TACO,’ a clever acronym for ‘Trump Always Chickens Out.’ This satirical nickname refers to his apparent inconsistency in maintaining tariff policies and the consequent rollercoaster ride it has presented for the market.