Tariffs again
Trump has imposed more tariffs on Canada, Mexico, and China:
The extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl, constitutes a national emergency under the International Emergency Economic Powers Act (IEEPA).
Until the crisis is alleviated, President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff.
President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.
I guess whatever they did initially in response to the earlier threat of tariffs by Trump didn’t work, and now he’s doing this.
Canada has retaliated with tariffs of its own:
Today, the Honourable Dominic LeBlanc, Minister of Finance and Intergovernmental Affairs, and the Honourable Mélanie Joly, Minister of Foreign Affairs, announced that in response to unjustified U.S. tariffs, the Government of Canada is moving forward with 25 per cent tariffs on $155 billion worth of imported goods, beginning immediately with a list of goods worth $30 billion. The scope of the Canadian counter tariffs will be increased to $155 billion if the current U.S. tariffs are maintained. The scope could also be increased if new tariffs are imposed. This was not the outcome Canada hoped for – but we must respond in order to protect our economy and Canadian jobs.
The first phase of Canada’s response includes tariffs on $30 billion in goods imported from the U.S., effective as of 12:01 a.m., March 4, 2025. The list includes products such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and certain pulp and paper products.
Minister LeBlanc also announced that, should the U.S. continue to apply unjustified tariffs on Canada, the government intends to impose additional countermeasures on $125 billion in imports from the U.S., drawing from a list of goods open for a 21-day comment period, which would bring the scope of countermeasures to a total of $155 billion worth of products. The list includes products such as electric vehicles, fruits and vegetables, beef, pork, dairy, electronics, steel, aluminum, trucks, and buses.
It goes on.
I’ve said before that I don’t really understand this tariff business, especially in regard to Canada. Does Trump really think that this will cause Canada to get tougher about fentanyl? That doesn’t seem to be the way it’s going at the moment.
My gut feeling is that Trump wants to do this anyway, and although he’s sincere about wanting a reduction in fentanyl importation his real goal is that he thinks the tariffs will serve to further protect American businesses. His actions seem overly broad to me and needlessly antagonistic, and I don’t think they will accomplish his goals. But I’m open to being talked out of that notion. Help me out here, folks.
Can’t fentanyl be made in USA?
Anyway, ya have to laugh at Mexico and Canada retaliating by adding tariffs which will raise the cost of American products to Canadians.
I really doubt we’ll notice the retaliatory tariffs much. There are far more tariffs in effect than most people are aware of.
As for the new ones, for example in my state I’m already taxed about $0.50 per gallon for gas or diesel. The US is the world’s largest oil producer, has been for like 7 years in a row, and Canada is maybe half the imported gas, so we’d see much less than 10% increase in gas prices, probably swamped by demand fluctuations and/or more taxes.
I don’t know if there is anyone regularly posting here who is more negative about protective tariffs than I am, whether ours or other countries’, for what it’s worth.
There’s been a lot of moves away from Chinese imports and we probably shouldn’t be buying the Mexican avocados since the cartels took over so much avocado production.
Canadians I’m sure will continue to duck across the border to buy dairy products and flood the factory outlet stores. Supposedly Canadian’s protective policies are popular in Canada but the revealed preference of Canadians near the border is to evade them.
[Comment I posted on Open Thread]
Re: Tariffs
TommyJay:
Economics is not my strong suit. However, I do wonder if Trump’s new tariffs aren’t a more important story than the amount of coverage they receive.
I appreciate Trump’s motivations but tariffs are known to be blunt economic tools.
–“Trump’s trade war draws swift retaliation with new tariffs from Mexico, Canada and China”
https://apnews.com/article/trump-tariffs-canada-mexico-china-643086a6dc7ff716d876b3c83e3255b0
It is my understanding that Canada, Mexico, China and EU already impose higher tariffs on US goods than US has imposed on them in the past. If they didn’t have such high tariffs maybe Trump would not have imposed these tariffs.
Canada is our largest trading partner, or close to it, with about $900 billion total trade and a trade deficit of about $64 billion (favoring Canada). We have about as much trade with Europe, but our trade deficit is $200 billion.
President Trump has said the administration is going to apply reciprocal tariffs. The administration is analyzing tariffs with all our trading partners and in early April the president will have the list and our tariffs will match those that are imposed on our goods.
Will be interesting to see how this works in practice.
Maybe it is still about Canada not doing enough to protect their borders (seaports)?
Trump has repeatedly said he wants trade fairness. He is pissed that tariffs charged to us are much larger than we charge other nations. Canada trade is a very small portion of our overall GDP, while the USA trade (exports to the USA) is relatively huge to Canada. As it is to all other countries, as we represent 25-30 percent of total global GDP.
Good luck to any country trying to out-last us on tariffs. Trump understands he has all the leverage. If he can get our trading partners to treat us fairly it will be a massive gain to our economy. May be some short term pain, but not for long unless Canada wants to see its economy collapse. Mexico is in the same boat.
This was the original Howard Lutnick video I saw this morning, on Kudlow. It was worth watching again because of the “color” Lutnick provides in the first couple minutes, about the negotiations involved in this new 25% tariff. Also, near the end he mentions the Canadian dairy tariffs and the “digital tariff.” I’ve never heard of the latter before.
I’m generally not happy with the idea of the Canadian/Mexico tariffs, but the ramifications are certainly unclear to me. (Other than losing a truck-load of money, on paper, personally, in the markets!) It feels like the opening move in a chess game, though I hope that’s overstating the complexity.
Will the link below work??
Watch the latest video at foxbusiness.com
Trump needs to explain this clearly without exaggeration or bombast.
People, me included, do not understand tariffs, and more importantly trade restrictions; and it is hard to get accurate information from open sources.
Trump has alluded to restrictions that both Mexico and Canada–as well as others–put on U.S. products. Expain that Mr President. Inquiring minds.
Many countries relying on exports to the US have tariffs on US goods. It has been a sweet deal for them and has worked wonders for their development. I’d be very interested in what an analysis reveals about the situation. That said, I have no idea how things will work out with the current tariffs, but Trump is happy to use his leverage and seems pretty flexible in responding. Speak loudly and wave a club seems his style. We will see.
Soft soap attempts to change fentanyl policy in our neighbors have gone ignored. Escalation is the only alternative.
Dwaz sums it up for me, too.
@Chuck:and has worked wonders for their development
By sucking money from everybody in their country into the pockets of the connected, sure…
4 L of 2% milk in Vancouver is $6.99 CAD, about $4.80 USD. $3.69 where I live in Western Washington for 1 gal: 30% more money for 5% more milk in the container….
That’s why Canadians load up on milk across the border, and signal their virtue by telling pollsters they support dairy protectionism.
I believe it was in the Bush admin where a tariff was placed on imported steel. This re-invigorated the US steel industry–to an extent, anyway. So, a win.
Thomas Sowell noted that the increased price of steel resulted in fewer projects, large and small, requiring steel and the jobs lost thereto exceeded those saved or started in the industry itself.
But the former were concentrated in big firms, represented by unions, and–presumably not corporate-owned–legislators.
The latter were spread out without a concentrated voice.
“Needlessly antagonistic” is an apt description.
• The tariffs support two different high-level objectives: 1) Stop the Illegal Immigration & Fentanyl Drug trade, and 2) Stop one-sided tariffs.
1.a) The China tariff – 10% – is primarily due to China’s lead in the manufacture of fentanyl and of the chemicals used to make fentanyl; which is then exported to Mexico and Canada to support fentanyl distribution into the USA – see 800,000+ USA deaths.
1.b) The Mexico and Canada tariffs – 25%, 25% – are due to those countries unwillingness to stop the flow of illegal immigrates and fentanyl into the USA. And that they have treated control of their shared USA border as largely an USA responsibility – see shared sovereign nations responsibility.
• I’ll add that most people understand that illegal immigration & drugs has been an ongoing issue with Mexico. And that the Mexican government has allowed the issues to proliferate – see corruption.
• However, many may not be aware that Canada now has same issues, and that the current Canadian government has allowed the same issues to proliferate in Canada – see corruption.
• From what I have read, the commercial truck traffic^^ that supports most of the transit of Canadian goods into the USA is the “pipeline” for the drug distribution – versus the multi-channel trucks, small planes, tunnels, etc. approach for Mexico.
^^ = have also read that this is linked to the exponential growth in corrupt Canadian immigration practices (money, improper vetting) – see ownership of commercial driving schools and truck operators
• And that Canada has seen exponential growth in the exploitation of what is a highly integrated manufacturing pipeline – see parts delivered to USA factories – and what has always been a relatively open Canada & USA border – see previous shared values & trust.
2) The pending new reciprocal tariffs – April 2 – will be due to tariffs that another country has on USA goods. If country A has a x% tariff on USA good 123, then the USA will add a x% tariff on country A’ 123 goods – see stop one-sided use of tariffs against USA.
• Countries can reduce or eliminate the USA tariff on their goods if they reduce or eliminate their tariff on USA goods. Manufactures can avoid the new USA tariffs – if the current country of origin will not reduce/ eliminate their tariffs – by moving manufacturing to the USA.
Lastly, most of the Legacy Media coverage about the 25% Mexica and Canada tariff is about what may happen, versus what is happening to the USA. The governments of China, Mexico and Canada are not some hapless, innocent victims, and they are all well aware of the damage that they are doing to the USA.
Once again, Trump recognizes the issues, and more importantly, is trying to do something about these destructive issues by: a) being clear about who is being held responsible, b) taking a “carrot & stick” approach, and c) using a tool that has always been available to USA Presidents – see will & backbone.
Trump has also floated the idea of abolishing income tax and making up the required revenue by way of tariffs. Even a relatively lean federal government would require much more tariff revenue than it receives at present to make that happen.
Of course, an absurd number of the estimates you find floating around assume that tariffs won’t change behavior.
The elimination of income tax would be great, though. Not so much because I hate paying income tax (although I do) but because it’s also a domestic surveillance program. Note, for example, all the hullabaloo surrounding leaked tax filings.
Grok, tell me about Canadian tariffs on US products:
“Canada has long maintained high tariffs on certain U.S. agricultural products to shield its domestic producers. For example, dairy products face some of the steepest tariffs under Canada’s supply management system: milk at around 270%, cheese at 245%, and butter at nearly 300%. Poultry and eggs also see significant tariffs, such as 238% on chicken and 245% on eggs. These measures ensure that Canadian farmers remain competitive against U.S. imports, though they have been a point of contention in trade negotiations.
Beyond agriculture, Canada applies tariffs to other U.S. goods, though many are reduced or eliminated under USMCA for qualifying products. For instance, prior to retaliatory actions, tariffs on U.S. cars could reach 25%, and industrial materials like steel and aluminum have faced duties in past trade disputes (e.g., 25% on steel and 10% on aluminum in 2018, later lifted in 2019)”
Free trade, no tariffs (nor slavery) anywhere, is best for consumers all over the world. Most countries have a variety of tariffs on US products, to help their own less efficient producers stay in business against more efficiently produced, thus cheaper, imports.
@David’s examples of Canadian tariffs show this clearly.
@that guy’s notes seem most true.
Tariffs also give the country some money so that the deficit is lower, and high deficits have similar hidden costs to those Thomas Sowell points out on tariffs—good stuff not done.
News that doesn’t list current tariffs and trade balances is missing important info. Most countries have a trade surplus with the US—yet virtually everything imported could have been produced in the US, tho at much much higher prices for various rare earth minerals, and often only slightly higher prices for Japanese made cars, or German made.
Tariffs, or not, also usually lead to more corruption.
Lots of complex interactions means that the new tariffs are both somewhat good and somewhat bad, in not clearly determined amounts. They certainly show Trump is willing to treat his “allies” as those allies treat him. Most of the Free World has been free riding, to some extent, on the US. The free rides are ending.
It’s human nature to take long term free rides for granted, like failing to pay 2% of your budget into NATO despite prior agreements to, and then be upset when the free ride ends. No more Mr. Nice Guy, paying more to make up for those paying less.
Tariffs are also part of Trump’s push to get European countries to pay more for defense. Trump being a bully? Trump stopping the US from being a patsy?
Whenever a big strong patsy starts wanting equal treatment from smaller guys who have bullying the big guy, the standing up for himself is like a form of bullying, relative to prior patsy status. Many Reps feel the GOPe acted like patsies, and prefer a Trump who will fight. In some trade & defense issues, the US has been carrying an unfair burden.