President Trump’s recent reciprocal tariffs do not apply to Canada and Mexico, who remain subject to existing duties. Both nations benefit from exemptions under the USMCA, but still face current tariffs on specific goods, including those related to energy and fentanyl. Leaders of Canada and Mexico are preparing to respond strategically to these tariff developments.
On April 2, 2024, President Donald Trump announced his reciprocal tariffs, stating that the United States had been “looted, pillaged, raped, plundered” by other nations. This announcement led to a wave of tariffs, starting at 10 percent and reaching as high as 45 percent on imports. Fortunately for Canada and Mexico, they were exempted from these new tariffs, allowing both countries to breathe a sigh of relief.
Despite the exemption, it is important to note that Canada and Mexico are not without tariffs altogether. They already face existing tariffs, including a 25 percent duty on fentanyl-related products and a 10 percent tariff on Canadian energy and potash imports. Additionally, new automotive levies set to take effect will further impact trade with these countries.
The exemption of Canadian and Mexican goods from the April 2 tariffs is attributed to prior tariffs established by Mr. Trump earlier this year. Under the US-Mexico-Canada Agreement (USMCA), goods entering the United States from Canada and Mexico remain exempt from the reciprocal tariffs. However, should Canada and Mexico negotiate any new trade deals, they may still encounter Mr. Trump’s base tariff rates.
Canadian Prime Minister Mark Carney expressed a commitment to counter the tariffs, stating, “We are going to fight these tariffs with counter-measures. We are going to protect our workers.” Mexican President Claudia Sheinbaum is expected to provide a formal response in her upcoming press conference.
In a broader context, the reciprocal tariffs encompass a range of nations, with China facing a considerable 34 percent tariff due to its significant trade surplus with the United States. Other nations like India, the European Union, and several Asian countries also face varying rates. Notably, countries such as Cuba, Belarus, North Korea, and Russia are excluded from this new wave of tariffs due to existing sanctions limiting trade opportunities.
In summary, Canada and Mexico successfully avoided Donald Trump’s April 2 reciprocal tariffs, although existing and new tariffs still apply to their goods. The exemptions are facilitated by the USMCA and prior tariffs on fentanyl and energy products. Leaders from both nations have responded with plans to counteract any impacts of these tariffs while maintaining their commitments to protect their domestic workers.
Original Source: www.hindustantimes.com
