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Trump walks back tariffs on Mexico, Canada for another month

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From The Center Square

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Stocks sunk Thursday afternoon despite President Donald Trump’s decision to grant major exceptions to the 25% tariffs he put on Mexico and Canada earlier this week.

All three major U.S. market indexes were in the red by the time of Trump’s afternoon bill signing. Trump said Thursday in the Oval Office that steel and aluminum tariffs were on track for next week without modifications.

Trump shrugged off the stock losses, blaming the decline on “globalists.”

“I think it’s globalists that see how rich our country is going to be and don’t like it,” he said.

Trump has promised that his tariffs would shift the tax burden away from Americans and onto foreign countries, but tariffs are generally paid by the people who import the products. Those importers then have a choice: They can either absorb the loss or pass it on to consumers through higher prices. He also promised tariffs would make America “rich as hell.” And he’s used tariffs as a negotiating tactic to tighten border security.

Trump granted temporary tariff relief to both Canada and Mexico on Thursday by exempting goods under the United States-Mexico-Canada Agreement from tariffs until April 2.

On April 2, Trump plans to announce broader reciprocal tariffs against countries that impose tariffs on U.S. goods or keep U.S. goods out of their markets through other methods.

Since imposing his latest round of tariffs on top of trading partners this week, Trump has been paring them back. On Wednesday, Trump said the Big Three automakers – Ford Motor Co., General Motors Co. and Stellantis NV – would be exempt from his tariffs for a month.

In February, Trump took a step forward on his plan to put reciprocal tariffs on U.S. trading partners by signing a memo directing staff to come up with solutions in 180 days. Trump previously said he would put those tariffs in place on April 2 to avoid any confusion on April 1.

In his joint address to Congress on Tuesday, Trump said all countries would have to either make their products in the U.S. or be subject to tariffs.

“Whatever they tariff us, we tariff them. Whatever they tax us, we tax them,” Trump said. “If they do non-monetary tariffs to keep us out of their market, then we do non-monetary barriers to keep them out of our market. We will take in trillions of dollars and create jobs like we have never seen before.”

The United States-Mexico-Canada Agreement, or USMCA, governs trade between the U.S. and its northern and southern neighbors. It went into force on July 1, 2020. Trump signed the deal. That agreement continued to allow for duty-free trading between the three countries for products largely made in North America.

U.S. goods and services trade with USMCA totaled an estimated $1.8 trillion in 2022. Exports were $789.7 billion and imports were $974.3 billion. The U.S. goods and services trade deficit with USMCA was $184.6 billion in 2022, according to the Office of the United States Trade Representative.

Business

US Treasury Secretary Says Tariffs Will Go Up For Any Leader Acting Like ‘Numbskull’ Justin Trudeau

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From the Daily Caller News Foundation

By Harold Hutchison

U.S. Treasury Secretary Scott Bessent told Fox Business host Larry Kudlow Thursday that world leaders emulating “a numbskull” like Canadian Prime Minister Justin Trudeau could see higher tariffs from the United States.

President Donald Trump announced Monday that new tariffs on Canada, Mexico and China would go into effect, citing “vast amounts of fentanyl” pouring into the United States. After noting Trudeau’s defiant response, which included retaliatory tariffs, Bessent, during the interview by Kudlow at the Economic Club of New York, urged world leaders to negotiate.

“As President Trump has said many times, ‘tariff’ is his favorite word. I would say the ‘reciprocal’ is probably his second favorite word. And I think we have to be open to the idea. If you want to be a numbskull like Justin Trudeau and say, ‘Oh, we’re going to do this,’ then it’s going to — tariffs are going to go up,” Bessent told Kudlow. “But if you want to sit back, have a discussion with the Commerce Department, USTR, they all have my phone number too. I am happy to have a discussion with our foreign counterparts, that says that, ‘Here’s what we think you are doing.’ And the tariffs are the actual easy part. Because we know India does this on U.S. motorcycles. Germany does this on — or EU does this on American cars. That’s a quantitative number.”

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Trump delayed the imposition of the tariffs on Mexico following a conversation with Mexican President Claudia Sheinbaum, thanking her for her “hard work.” Bessent said tariffs were not the only barriers American products faced.

“But, also, what are non-tariff barriers? Apple cannot sell the new iPhone 16 because of local content laws in Indonesia. Are — are you manipulating your currency? Are you suppressing the value of that? Are you unfairly subsidizing select industries either via bank lending or suppressing labor markets?” Bessent asked.

Bessent also noted fines that the European Union was imposing or threatening to impose on American tech companies like AppleGoogle and X, formerly known as Twitter.

“Something that’s come to our attention recently, the EU is putting these gigantic fines on our U.S. tech companies, and that’s a form of — that’s a non-tariff barrier too,” Bessent told Kudlow. “So we’re going to look at that and then talk about what could happen on a reciprocal basis. It’s going to be — much of that will come out April 2. And we will then — it’s going to be path-dependent based on our trading partners and there will be a discussion. When Prime Minister Keir Starmer and team U.K. were in the White House on Thursday, we had a very good discussion about getting — going on all of this and more.”

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Next federal government should reverse Ottawa’s plastics ban

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From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

As noted by the Trudeau government, plastic substitutes contribute to lower air quality and “typically have higher climate change impacts” due to higher GHG emissions.

Recently at the White House, President Donald Trump signed an executive order reversing the Biden administration’s plan to phase out plastic straws. The Trudeau government, however, continues with its plan to ban single-use plastics, even though this prohibition will have minimal impact worldwide, will actually increase waste in Canada, and force a transition to alternatives that impose greater environmental harm. Rather than doubling down on a flawed policy, the next federal government should reverse Trudeau’s plastic ban.

In 2021, the Trudeau government classified plastic items as “toxic,” paving the way for the ban on the manufacturing, importing and selling of checkout bags, cutlery, stir sticks and straws—all single-use plastics. In 2023, the Federal Court deemed the designation “unreasonable and unconstitutional”—but the Trudeau government defended the measure and is appealing, with a ruling expected this year.

According to the latest available data, Canada’s contributes 0.04 per cent to global plastic waste. The United States contributes 0.43 per cent—more than 10 times Canada’s share. But neither country is a major contributor to global plastic waste.

According to a 2024 article published in Nature, a leading scientific journal, no western country ranks among the top 90 global plastic polluters, thanks to their near-total waste collection and controlled disposal systems. Conversely, eight countries—India, Nigeria, Indonesia, China, Pakistan, Bangladesh, Russia and Brazil—generate more than half of global plastic waste. And nearly 75 per cent of the world’s ocean plastic comes from Asia with only six countries (Philippines, India, Malaysia, China, Indonesia and Myanmar) accounting for most of the world’s ocean plastic pollution.

The Trudeau government’s own science assessment, cited in the court appeal, states that 99 per cent of Canada’s plastic waste is already disposed of safely through recycling, incinerating and environmentally-friendly landfills. Despite these facts, plastic has become a target for blanket restrictions without fully considering its benefits or the downsides of switching to alternatives.

Consider this. Plastics are lightweight, durable and indispensable to modern life. From medical devices, food packaging, construction materials, textiles, electronics and agricultural equipment, plastics play a critical role in sectors that improve living standards.

Alternatives to plastic come with their own environmental cost. Again, according to the government’s own analysis, banning single-use plastics will actually increase waste generation rather than reduce it. While the government expects to remove 1.5 million tonnes of plastics by 2032 with the prohibition, it will generate nearly twice as much that weight in waste from alternatives such as paper, wood and aluminum over the same period. Put simply, the ban will result in more, not less, waste in Canada.

And there’s more. Studies suggest that plastic substitutes such as paper are heavier, require more water and energy to be produced, demand more energy to transport, contribute to greater smog formation, present more ozone depletion potential and result in higher greenhouse gas (GHG) emissions.

As noted by the Trudeau government, plastic substitutes contribute to lower air quality and “typically have higher climate change impacts” due to higher GHG emissions.

While plastic pollution is a pressing global environmental issue, Canada is not a major contributor to this problem. The rationale behind the Trudeau government’s plastic ban lacks foundation, and as major economies including the U.S. go back to plastic, Canada’s plastic prohibition becomes increasingly futile. The next federal government, whoever that may be, should reverse this plastic ban, which will do more harm than good.

Julio Mejía

Policy Analyst

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute
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