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Canada and Mexico are being spared from most of the sweeping tariffs announced by U.S. President Donald Trump today. In a lengthy speech from the White House Rose Garden, Trump unveiled his latest trade measures aimed at nearly every US trading partner to one degree or another.
While the Canada-United States-Mexico Agreement (CUSMA) remains intact, a 10 per cent tariff will apply to goods outside the trade deal, and a 25 per cent duty on Canadian steel, aluminum, and autos remains in place.
The new measures also impose a 10 per cent baseline tariff on imports from all other countries, with even higher tariffs targeting nations Trump claims engage in unfair trade practices.
While CUSMA exempts Canada and Mexico from most new tariffs, the decision to maintain levies on key sectors has drawn criticism. The North American auto sector is highly integrated, and steel and aluminum are used by most of the manufacturers in the USA.
When combined with 34 per cent tariffs on goods from China, 49 per cent on goods from Cambodia, and 32 per cent on goods from Taiwan, Democratic Senator Amy Klobuchar of Minnesota argues the move amounts to a tax on the middle class and estimates it will cost the average American family more than $5,000 per year.
The auto industry is bracing for further disruption as a 25 per cent tariff on Canadian-made vehicles takes effect at midnight, April 3. Prime Minister Mark Carney responded to the announcement by vowing to challenge the auto tariffs and provide support for affected workers.
Carney did not offer specifics but indicated that countermeasures would be considered. The move has prompted concerns from industry leaders, who fear the unpredictability of Trump’s trade policies could deter investment and disrupt supply chains.
Economic analysts point to the mixed success of Trump’s previous tariff policies, which aimed to revive U.S. manufacturing but fell short of their goals. While tariffs make foreign goods more expensive, critics argue they do not necessarily lead to domestic growth. In contrast, policies under the Biden administration saw an increase in manufacturing investment through targeted public spending and infrastructure projects.
With Trump’s latest round of tariffs now in motion, Canadian officials are watching closely to determine the broader impact on trade and economic stability in North America. Meanwhile, after-hours trading on US stock indexes are showing sharp declines as investors seek to limit their losses and exposure to the US economic turmoil.
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