Suffering from a case of tariff whiplash? Here’s what you need to know
The Trump administration has announced a new suite of commercial measures on dozen countries on Wednesday. And if the new rules have a head that swims, you are not alone.
In short, Canada has been spared in the worst, but the current measures will still have enormous implications for this country and the rest of the world.
Here are the answers to some frequent tariff questions.
Ok, so what happened yesterday?
The President of the United States Donald Trump has announced large new rates on most of the world in front of a crowd gathered at the rosette of the White House, for a day he called “liberation day” in view of the event.
The president said he would apply “a minimum basic rate of 10 %” on all goods that enter the United States, which will come into force on April 5. For the countries that tells the most traverse in the United States, that number salt. Those rates of the “worst transgressor” come into play on April 9th.
The representatives of the President of the United States Donald Trump were doing the tour on Thursday morning, defending his global tariff plan while the equity indexes collapsed in response.
Everything was detailed on a large graph, divided by country, that the president used to articulate his message to the crowd.
Canada and Mexico were both free from that figure of 10 % and further rates.
Does it mean that Canada is without rates?
No, there are not just new ones.
The aluminum and steel that went from Canada to the United States had already been tariffs at 25 % before today. Those rates will continue.
Also a 25 % rate on all cars made abroad – including the Canadians – enters into force today. This measure was the one we saw coming, since the White House announced those details at the end of March.
Are there any exceptions?
Yes, because nothing can be simple in a commercial war.
The goods that comply with the US-Messic (Cusma) agreement of Canada will not see rates, but those that are not will be taxed at 25 %. Energy and potassa does not comply with Cusma would see a 10 %lower rate.
The White House has also said that importers who bring cars to the United States under Cusma will have the opportunity to certify their US content. The 25 % rate would therefore only apply to the parts of the car that are not American.
And the rest of the world?
In general, Asia has been hit hard by new rates. China has obtained a rate of 34 %, Vietnam will pay a rate of 46 %, Thailand was 36 %and that of Cambodia was 49 %, to name a few.
Many Latin America countries – such as Colombia, El Salvador and Argentina – are taxed at 10 %.
Also the European Union received a 20 % tariff rate on all goods.
Lesotho and Saint Pierre and Miqualon, a small group of French islands off the coast of Terranova, have the highest tariff rates at 50 %.
Why is Trump doing it?
Trump has defined these “mutual rates”, which means that the United States do to others what they believe has been done to them.
A truly mutual rate would simply correspond to what other countries accuse the importers of the United States to bring goods to the country. For example, if Canada were to put a 5 % rate on wine that entered the country from the United States, a mutual rate would also see the United States impose a 5 % rate on Canadian wine. Many of these new withdrawals are not mutual rates.
The president REALIZATED AGAIN AGO yesterday That the United States “subsidize” many other countries allowing them to send more than their goods to the United States that the United States send them.
For example, he has often repeated that the United States subsidized Canada for an amount of $ 200 billion per year. This is false, however – the figure for 2024 was $ 63.3 billion USA. And that number is actually the commercial deficit between the two countriesIn the sense that the United States acquire more from Canada than we buy from them.
The president also stated that these measures will report production in the United States – something he supports “Make America rich again. “
The administration also mentioned an emergency of drugs and migrant on the border as justification for its rates on Canada, however, once again, again, The validity of this request was contested. So far the White House has used a national emergency declaration to put the rates on Canada.
The White House said yesterday that if that emergency should disappear, then the rate on goods that do not respect the USMCA drops from 25 % to 12 %.
Does Canada have retaliation rates taking place right now?
YES. Canada imposed rates of 25 % for the first time on US goods for a value of $ 30 billion on March 4th. Another $ 29.8 billion in American goods was slapped with the same 25 % on March 13.
Prime Minister Mark Caryy announced another 25 % rate on Thursday, this time on all cars arriving in Canada from the United States, this corresponds to the huge car rates that enter into force in the United States today.
How bad are the car rates for Canadians and car manufacturers here?
It is expected that it will have a devastating impact.
Already today, the assembly system of Stellantide in Windsor, Ontario, says Are stopping the operations For two weeks, largely due to these rates on the automotive industry. A star spokesman said about 3,200 Canadians would be affected by the closure.
Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Association, states that the North American vehicle industry operates on a “Just-in-Time” model, which means that the parties reach the factories just before needing them. It helps the industry to be efficient, but it is also the reason why impacts feel so suddenly.
He adds that these rates will increase the costs for car manufacturers, who will be transmitted to consumers and in the end they will mean less people who buy, with consequent less production in factories. Economist and Professor Colin Mang called CBC at the beginning of this week The rates could increase the adhesive price of a new car by thousands of dollars.
Kingston says that the sculpture for cars based on what they are made by the American parts is positive – over 50 % of a car that has been assembled in Canada could have parts made in the United States, so that it will consider the 25 % rate considerably.
But he adds that he does not want to hold the situation – he says it is still a “significant cost”, only one that is slightly lower than what their European or Asian competitors will have to face.
Will this also damage the American automotive industry?
YES. The North American car industry is massively intertwined. Some parts cross the boundaries between Mexico, Canada and the United States a handful of times before ending up in the car.
Canada and the United States signed an automotive pact in 1965 and since then they have worked together to build a singular automotive industry that would be as efficient and convenient as possible.
The Stellantis car manufacturer has confirmed that it is closing its assembly system in Windsor, Ontario, for two weeks, largely due to the US rates on imported vehicles. Unifor Local 444 estimates about 4,500 people work in various jobs and commercials in the factory.
THE The star of Stellantis said That the assembly plants both in Canada and Mexico will be temporarily to a minimum. The company also stated that 900 employees in the US will be temporarily fired, although no plant will stop production.
Outside North America, the German car manufacturer Volkswagen also said They will charge an import commission On all the cars affected by the 25 % rate from the United States, they also interrupted the shipments of vehicles from Mexico to the United States by train and say that the cars coming from Europe by ship will remain in the ports, according to the Wall Street Journal.
Ok, enough details. What does all this mean in the general picture?
Overall, these rates will increase costs and have an impact on the global order as we know it.
Eric Miller, head of Washington’s Rideau Potomac consultancy, said that this will mean that less international trade will take place all over the world, which will reduce the choice of consumers and damage people’s income all over the world.
Trump’s goal is also to move where the production takes place, reporting it from abroad to the United States, but the transfer of this type of structures takes a long time and a lot of money. Given the nature stop-and-star of the tariff policy of the US administration so far, the commercial expert Chad Bown he told CBC It is not sure that companies will still want to make those enormous changes.
The punitive actions towards the United States is also likely to follow Miller, as other countries try to react to Trump rates. This will further guide a wedge in the relationships of the United States with other western countries such as the United Kingdom and Australia, he says.
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“It will be underlined to these traditional allies that the United States is not a reliable ally with a little quotation that can be counted and trusted,” Miller said at the CBC Front burner.
Miller says that these changes bring a brusque firm to the way the world tends to do business.
“You have essentially seen an invasion of the economic model that the world and North America have pursued since the mid -1980s, where there is less economic interdependence, there is less international trade. There is less opening to international trade,” Miller said.
And Miller says that the world order could never return as it was before Wednesday.
