Trump withdraws threat to raise Canada's tariffs to 50%: Additional tariffs take effect

12punto FOREIGN NEWS

In a statement on Tuesday, Trump announced that he would double the tariffs to be applied to Canada in retaliation for Ontario Premier Doug Ford's plan to tax electricity exports to the US. Ford stated that he abandoned this decision after meeting with US Secretary of Commerce Howard Lutnick. Following this development, Trump issued a new statement announcing that doubling the tariffs on Canada was no longer on the table.

After his meeting with Lutnick, Ford shared a message on the X platform, announcing that they would meet on Thursday to discuss the renewal of the United States-Mexico-Canada Agreement with the US Trade Representative. Ford provided information that Ontario would suspend the 25 percent additional tax it applied to electricity exports to Michigan, New York, and Minnesota.

Ontario Premier Doug Ford

SHARP DECLINE IN THE STOCK MARKET

The decline in markets following Trump's previous customs duty announcements was observed to have slowed after he withdrew the threat of additional taxes on Canada. The S&P 500 index, however, continued to melt on Tuesday. Trump argued that Canada should remove the taxes it applies to dairy products imported from the US, saying that otherwise, he would increase taxes on automobiles imported into the US.

Canadian Prime Minister Mark Carney, who took office last week, described Trump's trade policies as 'an attack on Canadian workers, families, and businesses.' Emphasizing that the government would provide support to affected workers, Carney stressed that the measures to be taken would be planned to create maximum impact on the US and minimum impact on Canada.

TRADE WAR CONTINUES

In a post on the Truth Social platform, Trump accused Canada of 'long-abusing trade between the two countries.' Stating that the US would no longer provide economic subsidies to Canada, Trump wrote, 'We don't need your cars, we don't need your lumber, we don't need your energy, and you will learn that soon.'

According to NBC News, Mexico, like Canada, faced similar customs duty threats. The report claimed that Mexican President Claudia Sheinbaum managed to appease Trump. NBC pointed out that Canadian officials took a tougher stance than Mexico, responding to Trump with retaliatory tariffs and public statements.

In an interview with CNBC, Ontario Premier Ford criticized Trump's aggressive attitude toward his closest allies, stating the following:

''The American people should raise their voices against this. CEOs also need to show courage and state that these policies will be a disaster.''

Morgan Stanley analysts assessed that because the US is a net importer of steel and aluminum from Canada, the new tariffs could cause price increases in the domestic market. Experts argued that while some US companies like steel producer Alcoa might benefit from high tariffs, it would generally have a negative impact on companies.

News Source: 12punto