Latest news with #InuManak
Yahoo
3 hours ago
- Business
- Yahoo
Trump's global tariff pause is supposed to expire soon. What's at stake for Canada?
U.S. President Donald Trump's three-month pause on his sweeping global tariffs is set to expire in just a few days, unless he opts to give countries extra time to negotiate deals — as his advisers have suggested this weekend. Ahead of the deadline, some trade experts say Canada still faces big risks, despite avoiding that round of levies back in April. "What the president needs is a bunch of wins by July 9 because he needs to show that his strategy is working," said Inu Manak, a fellow for trade policy at the Council on Foreign Relations, during an interview with CBC's The Housethat aired Saturday. On April 2, Trump held up a list in the Rose Garden of the White House and announced what he called "reciprocal tariffs" on more than 150 countries, including China and the European Union. The rates for individual countries on the list varied from 10 per cent to more than 40 per cent. Canada wasn't on that list, though other tariffs Trump had previously imposed on Canadian goods remained. One week after he unveiled the list, the president backed down and said he would freeze the global tariffs for 90 days to allow each country to negotiate deals with his administration. The problem for Canada is Trump hasn't closed many deals in those 90 days, Manak said. So far, the U.S. has reached agreements with Britain and Vietnam. Negotiations with other top markets like China, India, the European Union and Japan are ongoing. "If we don't see a lot of deals coming out of this, what we're likely to see is [Trump] to get more agitated and ask for more concessions from the countries that he knows he can push a little harder," Manak said. "So I think for Canada, that would be a very bad situation." Carlo Dade, international policy director at the University of Calgary's School of Public Policy, told CBC News "there's a risk every day of the week that [Trump] decides to come after Canada. That is not an exaggeration." "We're open to this potential as long as the president has unrestrained power to implement tariffs whenever, wherever, however he wants," he said. Trump used a law called the International Emergency Economic Powers Act (IEEPA) to apply the worldwide tariffs and his earlier fentanyl tariffs on Canada and Mexico. The law is intended to address "unusual and extraordinary" threats during national emergencies. In late May, the New York-based U.S. Court of International Trade ruled Trump exceeded his authority by invoking IEEPA. The White House swiftly appealed and a federal appeals court allowed IEEPA tariffs to remain in effect while it reviewed the decision. WATCH | Europe gets a reprieve on tariffs: Manak said another challenge is Trump isn't facing political consequences for his tariffs right now — and no major economic fallout, either. "Right now, he's kind of sitting at a point where he feels he can kind of get away with maintaining the pressure that exists. And that pressure is enough to get other countries to the table," she said. At a White House news conference at the end of June, Trump told reporters the U.S. "can do whatever we want. We could extend [the July 9 deadline]. We could make it shorter. I'd like to make it shorter." On Sunday, U.S. Treasury Secretary Scott Bessent suggested the July 9 deadline is being pushed back by about a month. He said on CNN's State of the Union that the Trump administration would send letters to trading partners "saying that if you don't move things along, then on Aug. 1 you will boomerang back to your April 2 tariff level." "So I think we're going to see a lot of deals very quickly," Bessent told host Dana Bash. He also said Aug. 1 is "not a new deadline." Commerce Secretary Howard Lutnick told reporters Sunday the higher tariffs would take effect on Aug. 1, but Trump was "setting the rates and the deals right now." Fen Osler Hampson, co-chair of the Expert Group on Canada-U.S. Relations at Carleton University, said Canada could leverage the economic uncertainty from Trump's tariffs and "put the pedal to the metal" to expand trade with European and Asian allies. Hampson added that Canada already has good trading relationships with those regions through the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).With U.S. tariffs, Hampson said those countries are "going to be looking for other market opportunities, both to sell and buy. I think our challenge is to get serious and to realize the real dividends that can come from those two major regional trading agreements." Diversifying Canada's trading partners is one of Prime Minister Mark Carney's top goals — and a key objective for International Trade Minister Maninder Sidhu. "I think Canada has a lot to offer and we should be screaming that at the top of our lungs," Sidhu told CBC's The Housein an interview that aired Saturday. Canada has already deepened its trade relationships with countries such as Ecuador and the United Arab Emirates since Carney and Sidhu came into office. But key markets that could make a big dent in easing Canada's reliance on U.S. trade — like the U.K., India and China — are thornier due to fraught diplomatic relationships and other irritants. Colin Robertson, a former Canadian diplomat and vice-president at the Canadian Global Affairs Institute, agreed that Canada can do more trade with other countries, but added a note of caution: businesses, not governments, are the only ones who can decide which companies they trade with. "Ultimately, business has to see a business opportunity," Robertson said, adding that the U.S. continues to be the market with the easiest access for Canadian businesses. On The House, Sidhu told guest host Janyce McGregor that Canadian businesses were indeed comfortable dealing with the U.S., but now they're asking him to help facilitate access to more countries. Carney and Trump continue to negotiate a Canada-U.S. trade deal, after setting a deadline of July 21. Hampson said the deadline helps Canada hold the Americans' attention as the Trump administration negotiates with other countries. The Americans also have an interest in getting a deal done soon, Robertson said."If [the Americans] can't do it with Canada, their ally and their partner, it's much harder to do with Mexico, much harder with China," he said. "We should be the lowest of the hanging fruit from the American perspective." Trade discussions hit a roadblock in late June when Trump announced he would walk away from the negotiating table over Canada's digital services tax. The federal government scrapped the tax a few days later and discussions got back on track. Robertson said he's a bit skeptical about how far Canada will get with the U.S. by July 21, but adds that Trump enjoys declaring victory even if the agreement is "only 80 per cent of the way there." "Would we settle for 80 per cent? Be basically there and leave the rest to be cleaned up? I think so," he said. "Because if Trump's taken his eye off it and says it's basically there, then that's sufficient from where we're coming from."
CBC
19 hours ago
- Business
- CBC
Trump's global tariff pause is supposed to expire soon. What's at stake for Canada?
U.S. President Donald Trump's three-month pause on his sweeping global tariffs is set to expire in just a few days, unless he opts to give countries extra time to negotiate deals — as his advisers have suggested this weekend. Ahead of the deadline, some trade experts say Canada still faces big risks, despite avoiding that round of levies back in April. "What the president needs is a bunch of wins by July 9 because he needs to show that his strategy is working," said Inu Manak, a fellow for trade policy at the Council on Foreign Relations, during an interview with CBC's The House that aired Saturday. On April 2, Trump held up a list in the Rose Garden of the White House and announced what he called "reciprocal tariffs" on more than 150 countries, including China and the European Union. The rates for individual countries on the list varied from 10 per cent to more than 40 per cent. Canada wasn't on that list, though other tariffs Trump had previously imposed on Canadian goods remained. One week after he unveiled the list, the president backed down and said he would freeze the global tariffs for 90 days to allow each country to negotiate deals with his administration. The problem for Canada is Trump hasn't closed many deals in those 90 days, Manak said. So far, the U.S. has reached agreements with Britain and Vietnam. Negotiations with other top markets like China, India, the European Union and Japan are ongoing. "If we don't see a lot of deals coming out of this, what we're likely to see is [Trump] to get more agitated and ask for more concessions from the countries that he knows he can push a little harder," Manak said. "So I think for Canada, that would be a very bad situation." Carlo Dade, international policy director at the University of Calgary's School of Public Policy, told CBC News "there's a risk every day of the week that [Trump] decides to come after Canada. That is not an exaggeration." "We're open to this potential as long as the president has unrestrained power to implement tariffs whenever, wherever, however he wants," he said. Trump used a law called the International Emergency Economic Powers Act (IEEPA) to apply the worldwide tariffs and his earlier fentanyl tariffs on Canada and Mexico. The law is intended to address "unusual and extraordinary" threats during national emergencies. In late May, the New York-based U.S. Court of International Trade ruled Trump exceeded his authority by invoking IEEPA. The White House swiftly appealed and a federal appeals court allowed IEEPA tariffs to remain in effect while it reviewed the decision. WATCH | Europe gets a reprieve on tariffs: Trump delays tariff threat on EU to July 1 month ago Duration 2:52 U.S. President Donald Trump says he will delay his 50 per cent tariff on imports from the European Union until July 9 after a weekend phone call between Trump and European Commission President Ursula von der Leyen. Manak said another challenge is Trump isn't facing political consequences for his tariffs right now — and no major economic fallout, either. "Right now, he's kind of sitting at a point where he feels he can kind of get away with maintaining the pressure that exists. And that pressure is enough to get other countries to the table," she said. At a White House news conference at the end of June, Trump told reporters the U.S. "can do whatever we want. We could extend [the July 9 deadline]. We could make it shorter. I'd like to make it shorter." On Sunday, U.S. Treasury Secretary Scott Bessent suggested the July 9 deadline is being pushed back by about a month. He said on CNN's State of the Union that the Trump administration would send letters to trading partners "saying that if you don't move things along, then on Aug. 1 you will boomerang back to your April 2 tariff level." "So I think we're going to see a lot of deals very quickly," Bessent told host Dana Bash. He also said Aug. 1 is "not a new deadline." Commerce Secretary Howard Lutnick told reporters Sunday the higher tariffs would take effect on Aug. 1, but Trump was "setting the rates and the deals right now." Is there opportunity for Canada? Fen Osler Hampson, co-chair of the Expert Group on Canada-U.S. Relations at Carleton University, said Canada could leverage the economic uncertainty from Trump's tariffs and "put the pedal to the metal" to expand trade with European and Asian allies. Hampson added that Canada already has good trading relationships with those regions through the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). WATCH | Trump isn't pleased with taunts of 'chickening out' on trade: Does Trump 'always chicken out' on tariffs? 1 month ago Duration 5:34 Investors are poking fun at U.S. President Donald Trump's on-again, off-again tariff threats, calling it 'TACO' trade — which stands for 'Trump Always Chickens Out.' When asked about the term, Trump called it a 'nasty question.' CBC's Katie Simpson reports. With U.S. tariffs, Hampson said those countries are "going to be looking for other market opportunities, both to sell and buy. I think our challenge is to get serious and to realize the real dividends that can come from those two major regional trading agreements." Diversifying Canada's trading partners is one of Prime Minister Mark Carney's top goals — and a key objective for International Trade Minister Maninder Sidhu. "I think Canada has a lot to offer and we should be screaming that at the top of our lungs," Sidhu told CBC's The House in an interview that aired Saturday. Canada has already deepened its trade relationships with countries such as Ecuador and the United Arab Emirates since Carney and Sidhu came into office. But key markets that could make a big dent in easing Canada's reliance on U.S. trade — like the U.K., India and China — are thornier due to fraught diplomatic relationships and other irritants. Colin Robertson, a former Canadian diplomat and vice-president at the Canadian Global Affairs Institute, agreed that Canada can do more trade with other countries, but added a note of caution: businesses, not governments, are the only ones who can decide which companies they trade with. "Ultimately, business has to see a business opportunity," Robertson said, adding that the U.S. continues to be the market with the easiest access for Canadian businesses. On The House, Sidhu told guest host Janyce McGregor that Canadian businesses were indeed comfortable dealing with the U.S., but now they're asking him to help facilitate access to more countries. Canada-U.S. trade talks Carney and Trump continue to negotiate a Canada-U.S. trade deal, after setting a deadline of July 21. Hampson said the deadline helps Canada hold the Americans' attention as the Trump administration negotiates with other countries. The Americans also have an interest in getting a deal done soon, Robertson said. Canada and U.S. restarted negotiations Monday morning, Carney says 6 days ago Duration 1:15 Prime Minister Mark Carney says he had a 'good' conversation with U.S. President Donald Trump on Sunday, and that the two leaders will keep working to reach a deal by July 21. The federal government scrapped the digital services tax over the weekend after Trump paused all trade talks. "If [the Americans] can't do it with Canada, their ally and their partner, it's much harder to do with Mexico, much harder with China," he said. "We should be the lowest of the hanging fruit from the American perspective." Trade discussions hit a roadblock in late June when Trump announced he would walk away from the negotiating table over Canada's digital services tax. The federal government scrapped the tax a few days later and discussions got back on track. Robertson said he's a bit skeptical about how far Canada will get with the U.S. by July 21, but adds that Trump enjoys declaring victory even if the agreement is "only 80 per cent of the way there." "Would we settle for 80 per cent? Be basically there and leave the rest to be cleaned up? I think so," he said. "Because if Trump's taken his eye off it and says it's basically there, then that's sufficient from where we're coming from."
CBC
a day ago
- Business
- CBC
Trump's global tariff pause is supposed to expire Wednesday. What's at stake for Canada?
U.S. President Donald Trump's three-month pause on his sweeping global tariffs is set to expire in just a few days. Ahead of the deadline, some trade experts say Canada still faces big risks, despite avoiding that round of levies back in April. "What the president needs is a bunch of wins by July 9 because he needs to show that his strategy is working," said Inu Manak, a fellow for trade policy at the Council on Foreign Relations, during an interview with CBC's The House that aired Saturday. On April 2, Trump held up a list in the Rose Garden of the White House and announced what he called "reciprocal tariffs" on more than 150 countries, including China and the European Union. The rates for individual countries on the list varied from 10 per cent to more than 40 per cent. Canada wasn't on that list, though other tariffs Trump had previously imposed on Canadian goods remained. One week after he unveiled the list, the president backed down and said he would freeze the global tariffs for 90 days to allow each country to negotiate deals with his administration. The problem for Canada is Trump hasn't closed many deals in those 90 days, Manak said. So far, the U.S. has reached agreements with Britain and Vietnam. Negotiations with other top markets like China, India, the European Union and Japan are ongoing. "If we don't see a lot of deals coming out of this, what we're likely to see is [Trump] to get more agitated and ask for more concessions from the countries that he knows he can push a little harder," Manak said. "So I think for Canada, that would be a very bad situation." Carlo Dade, international policy director at the University of Calgary's School of Public Policy, told CBC News "there's a risk every day of the week that [Trump] decides to come after Canada. That is not an exaggeration." "We're open to this potential as long as the president has unrestrained power to implement tariffs whenever, wherever, however he wants," he said. Trump used a law called the International Emergency Economic Powers Act (IEEPA) to apply the worldwide tariffs and his earlier fentanyl tariffs on Canada and Mexico. The law is intended to address "unusual and extraordinary" threats during national emergencies. In late May, the New York-based U.S. Court of International Trade ruled Trump exceeded his authority by invoking IEEPA. The White House swiftly appealed and a federal appeals court allowed IEEPA tariffs to remain in effect while it reviewed the decision. WATCH | Europe gets a reprieve on tariffs: Trump delays tariff threat on EU to July 1 month ago Duration 2:52 U.S. President Donald Trump says he will delay his 50 per cent tariff on imports from the European Union until July 9 after a weekend phone call between Trump and European Commission President Ursula von der Leyen. Manak said another challenge is Trump isn't facing political consequences for his tariffs right now — and no major economic fallout, either. "Right now, he's kind of sitting at a point where he feels he can kind of get away with maintaining the pressure that exists. And that pressure is enough to get other countries to the table," she said. At a White House news conference at the end of June, Trump told reporters the U.S. "can do whatever we want. We could extend [the July 9 deadline]. We could make it shorter. I'd like to make it shorter." On Sunday, U.S. Treasury Secretary Scott Bessent suggested the July 9 deadline is being pushed back by about a month. He said on CNN's State of the Union the Trump administration would send letters to trading partners "saying that if you don't move things along, then on Aug. 1 you will boomerang back to your April 2 tariff level." "So I think we're going to see a lot of deals very quickly," Bessent told host Dana Bash. Is there opportunity for Canada? Fen Osler Hampson, co-chair of the Expert Group on Canada-U.S. Relations at Carleton University, said Canada could leverage the economic uncertainty from Trump's tariffs and "put the pedal to the metal" to expand trade with European and Asian allies. Hampson added that Canada already has good trading relationships with those regions through the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). With U.S. tariffs, Hampson said those countries are "going to be looking for other market opportunities, both to sell and buy. I think our challenge is to get serious and to realize the real dividends that can come from those two major regional trading agreements." WATCH | Trump isn't pleased with taunts of 'chickening out' on trade: Does Trump 'always chicken out' on tariffs? 1 month ago Duration 5:34 Investors are poking fun at U.S. President Donald Trump's on-again, off-again tariff threats, calling it 'TACO' trade — which stands for 'Trump Always Chickens Out.' When asked about the term, Trump called it a 'nasty question.' CBC's Katie Simpson reports. Diversifying Canada's trading partners is one of Prime Minister Mark Carney's top goals — and a key objective for International Trade Minister Maninder Sidhu. "I think Canada has a lot to offer and we should be screaming that at the top of our lungs," Sidhu told CBC's The House in an interview that aired Saturday. Canada has already deepened its trade relationships with countries such as Ecuador and the United Arab Emirates since Carney and Sidhu came into office. But key markets that could make a big dent in easing Canada's reliance on U.S. trade — like the U.K., India and China — are thornier due to fraught diplomatic relationships and other irritants. Colin Robertson, a former Canadian diplomat and vice-president at the Canadian Global Affairs Institute, agreed that Canada can do more trade with other countries, but added a note of caution: businesses, not governments, are the only ones who can decide which companies they trade with. "Ultimately, business has to see a business opportunity," Robertson said, adding that the U.S. continues to be the market with the easiest access for Canadian businesses. On The House, Sidhu told guest host Janyce McGregor that Canadian businesses were indeed comfortable dealing with the U.S., but now they're asking him to help facilitate access to more countries. Canada-U.S. trade talks Carney and Trump continue to negotiate a Canada-U.S. trade deal, after setting a deadline of July 21. Hampson said the deadline helps Canada hold the Americans' attention as the Trump administration negotiates with other countries. Canada and U.S. restarted negotiations Monday morning, Carney says 6 days ago Duration 1:15 Prime Minister Mark Carney says he had a 'good' conversation with U.S. President Donald Trump on Sunday, and that the two leaders will keep working to reach a deal by July 21. The federal government scrapped the digital services tax over the weekend after Trump paused all trade talks. The Americans also have an interest in getting a deal done soon, Robertson said. "If [the Americans] can't do it with Canada, their ally and their partner, it's much harder to do with Mexico, much harder with China," he said. "We should be the lowest of the hanging fruit from the American perspective." Trade discussions hit a roadblock in late June when Trump announced he would walk away from the negotiating table over Canada's digital services tax. The federal government scrapped the tax a few days later and discussions got back on track. Robertson said he's a bit skeptical about how far Canada will get with the U.S. by July 21, but adds that Trump enjoys declaring victory even if the agreement is "only 80 per cent of the way there." "Would we settle for 80 per cent? Be basically there and leave the rest to be cleaned up? I think so," he said. "Because if Trump's taken his eye off it and says it's basically there, then that's sufficient from where we're coming from."
CBC
a day ago
- Business
- CBC
Trump's global tariff pause expires Wednesday. What's at stake for Canada?
U.S. President Donald Trump's three-month pause on his sweeping global tariffs is set to expire in just a few days. Ahead of the deadline, some trade experts say Canada still faces big risks, despite avoiding that round of levies back in April. "What the president needs is a bunch of wins by July 9 because he needs to show that his strategy is working," said Inu Manak, a fellow for trade policy at the Council on Foreign Relations, during an interview with CBC's The House that aired Saturday. On April 2, Trump held up a list in the Rose Garden of the White House and announced what he called "reciprocal tariffs" on more than 150 countries, including China and the European Union. The rates for individual countries on the list varied from 10 per cent to more than 40 per cent. Canada wasn't on that list, though other tariffs Trump had previously imposed on Canadian goods remained. One week after he unveiled the list, the president backed down and said he would freeze the global tariffs for 90 days to allow each country to negotiate deals with his administration. The problem for Canada is Trump hasn't closed many deals in those 90 days, Manak said. So far, the U.S. has reached agreements with Britain and Vietnam. Negotiations with other top markets like China, India, the European Union and Japan are ongoing. "If we don't see a lot of deals coming out of this, what we're likely to see is [Trump] to get more agitated and ask for more concessions from the countries that he knows he can push a little harder," Manak said. "So I think for Canada, that would be a very bad situation." Carlo Dade, international policy director at the University of Calgary's School of Public Policy, told CBC News "there's a risk every day of the week that [Trump] decides to come after Canada. That is not an exaggeration." "We're open to this potential as long as the president has unrestrained power to implement tariffs whenever, wherever, however he wants," he said. Trump used a law called the International Emergency Economic Powers Act (IEEPA) to apply the worldwide tariffs and his earlier fentanyl tariffs on Canada and Mexico. The law is intended to address "unusual and extraordinary" threats during national emergencies. In late May, the New York-based U.S. Court of International Trade ruled Trump exceeded his authority by invoking IEEPA. The White House swiftly appealed and a federal appeals court allowed IEEPA tariffs to remain in effect while it reviewed the decision. WATCH | Europe gets a reprieve on tariffs: Trump delays tariff threat on EU to July 1 month ago Duration 2:52 U.S. President Donald Trump says he will delay his 50 per cent tariff on imports from the European Union until July 9 after a weekend phone call between Trump and European Commission President Ursula von der Leyen. Manak said another challenge is Trump isn't facing political consequences for his tariffs right now — and no major economic fallout, either. "Right now, he's kind of sitting at a point where he feels he can kind of get away with maintaining the pressure that exists. And that pressure is enough to get other countries to the table," she said. At a White House news conference at the end of June, Trump told reporters the U.S. "can do whatever we want. We could extend [the July 9 deadline]. We could make it shorter. I'd like to make it shorter." Trump said on Friday he'd signed letters to 12 countries outlining the tariff levels they'd face on goods they export to the United States. He declined to name the countries involved and said they would be made public on Monday. Is there opportunity for Canada? Fen Osler Hampson, co-chair of the Expert Group on Canada-U.S. Relations at Carleton University, said Canada could leverage the economic uncertainty from Trump's tariffs and "put the pedal to the metal" to expand trade with European and Asian allies. Hampson added that Canada already has good trading relationships with those regions through the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). With U.S. tariffs, Hampson said those countries are "going to be looking for other market opportunities, both to sell and buy. I think our challenge is to get serious and to realize the real dividends that can come from those two major regional trading agreements." WATCH | Trump isn't pleased with taunts of 'chickening out' on trade: Does Trump 'always chicken out' on tariffs? 1 month ago Duration 5:34 Investors are poking fun at U.S. President Donald Trump's on-again, off-again tariff threats, calling it 'TACO' trade — which stands for 'Trump Always Chickens Out.' When asked about the term, Trump called it a 'nasty question.' CBC's Katie Simpson reports. Diversifying Canada's trading partners is one of Prime Minister Mark Carney's top goals — and a key objective for International Trade Minister Maninder Sidhu. "I think Canada has a lot to offer and we should be screaming that at the top of our lungs," Sidhu told CBC's The House in an interview that aired Saturday. Canada has already deepened its trade relationships with countries such as Ecuador and the United Arab Emirates since Carney and Sidhu came into office. But key markets that could make a big dent in easing Canada's reliance on U.S. trade — like the U.K., India and China — are thornier due to fraught diplomatic relationships and other irritants. Colin Robertson, a former Canadian diplomat and vice-president at the Canadian Global Affairs Institute, agreed that Canada can do more trade with other countries, but added a note of caution: businesses, not governments, are the only ones who can decide which companies they trade with. "Ultimately, business has to see a business opportunity," Robertson said, adding that the U.S. continues to be the market with the easiest access for Canadian businesses. On The House, Sidhu told guest host Janyce McGregor that Canadian businesses were indeed comfortable dealing with the U.S., but now they're asking him to help facilitate access to more countries. Canada-U.S. trade talks Carney and Trump continue to negotiate a Canada-U.S. trade deal, after setting a deadline of July 21. Hampson said the deadline helps Canada hold the Americans' attention as the Trump administration negotiates with other countries. Canada and U.S. restarted negotiations Monday morning, Carney says 6 days ago Duration 1:15 Prime Minister Mark Carney says he had a 'good' conversation with U.S. President Donald Trump on Sunday, and that the two leaders will keep working to reach a deal by July 21. The federal government scrapped the digital services tax over the weekend after Trump paused all trade talks. The Americans also have an interest in getting a deal done soon, Robertson said. "If [the Americans] can't do it with Canada, their ally and their partner, it's much harder to do with Mexico, much harder with China," he said. "We should be the lowest of the hanging fruit from the American perspective." Trade discussions hit a roadblock in late June when Trump announced he would walk away from the negotiating table over Canada's digital services tax. The federal government scrapped the tax a few days later and discussions got back on track. Robertson said he's a bit skeptical about how far Canada will get with the U.S. by July 21, but adds that Trump enjoys declaring victory even if the agreement is "only 80 per cent of the way there." "Would we settle for 80 per cent? Be basically there and leave the rest to be cleaned up? I think so," he said. "Because if Trump's taken his eye off it and says it's basically there, then that's sufficient from where we're coming from."
Yahoo
03-04-2025
- Business
- Yahoo
We now know the full extent of Trump's reciprocal tariffs. They're huge.
'Liberation Day' turned out to be alarming. President Trump floored investors by announcing the largest tax hike on Americans since at least the 1940s. April 2, which Trump called 'Liberation Day,' was Trump's deadline for unveiling a sweeping set of taxes on imports that almost nobody in the investing universe saw coming. For the first two months of his presidency, Trump had threatened tariffs, imposed some, delayed others, and generally left market watchers hoping his bark would be worse than his bite. His bite turned out worse than his bark. The April 2 announcements included two sets of import tariffs. One is a new 'universal' tax on imports from everywhere. The average tariff rate on imports at the start of the year was about 2.5%. So the 10% universal tariff on its own would raise the average tariff to 12.5%. That would be the highest since around 1940. Read more: What Trump's tariffs mean for the economy and your wallet Much beefier are 'reciprocal' tariffs that are supposed to punish US trade partners that impose tougher barriers on imports from the United States than vice versa. To come up with those figures, Trump measured not just the taxes other nations impose on US imports but 14 categories of 'nonmonetary' actions that Trump says keep American products out of foreign markets. That led to the eye-popping 'reciprocal' taxes Trump now plans to impose on products from dozens of countries. The current average tariff on imports from China, for instance, is about 3%. Trump wants to raise that to 34%. For Japanese imports, the tax will rise from 1.6% to 24%. For products from Europe, the tax will rise from the 2% range to 20%. The universal 10% tariff is scheduled to start on April 5, while the reciprocal tariffs are set to go into effect April 9. Unlike any change to income taxes or most other taxes, which require congressional legislation, Trump can impose tariffs on his own authority. Some of the Trump taxes are 'stacked,' which means that multiple new tariffs might apply to some products. The matrix of overlapping new taxes compounds the confusion businesses already have to deal with as they try to understand what costs are likely to rise and by how much. Americans bought about $3.3 trillion worth of imports in 2024. The tariff rate of about 2.5% yielded a tariff tax bill of about $83 billion. Investing firm Evercore estimates that all the new tariffs combined will push the tax rate on imports to about 29%. If import purchases stayed the same, that would raise the tariff bill to about $960 billion, making it an $880 billion tax hike paid by American businesses and consumers. 'It's the biggest tax hike on Americans since the 1940s,' trade expert Inu Manak of the Council on Foreign Relations told Yahoo Finance on April 2. 'The only thing these tariffs are going to do is increase costs.' Economists are now busy trying to figure out whether the shock to corporate profits, stock values, and consumer wallets will be enough to cause a recession. Imports are only about one-tenth of total US GDP, which is nearly $30 trillion. So, as sweeping as the Trump tariffs are, they won't affect everything in the US will have major knock-on effects, though. When imported products get more expensive, it allows manufacturers of competing domestic products to raise prices too. It's also a near certainty that trade partners will retaliate against Trump's tariffs with their own punitive measures on US exports, which will dent revenue and profits for US exports and further hurt growth. Economists have already been lowering their forecasts for economic growth and raising their inflation estimates on account of Trump tariffs. Shortly before Trump's badly misnamed "Liberation Day," Goldman Sachs raised its odds of a US recession within 12 months from 20% to 25%. The risk of recession is certainly higher now. Read more: The latest news and updates on Trump's tariffs 'US growth is now headed for stall speed, and maybe worse than that,' Brett Ryan, senior US economist at Deutsche Bank, told Yahoo Finance on April 2. 'If not an outright recession, this certainly raises the risk of one.' If there's any solace for investors, it's that Trump can put the lightning back in the bottle just as fast as he unleashed it. Some trade partners may make concessions that lead to lower tariff rates. There are also likely to be thousands of case-by-case exemptions in which the Trump administration waives tariffs for companies facing particular hardships. Trump claims that high taxes on imports will lead to more domestic manufacturing and a revival of US manufacturing. In the best case, however, that will take years and generate uncertain results. The worst case may be what investors are facing now. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices.
