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Trump: US, Canada Make Tariff Deal 08/19 06:08
President Donald Trump said Tuesday he was delaying the 50% U.S. tariffs on
$20 billion worth of Canadian imports after the two countries reached a
last-minute deal less than two hours before the sanctions were to go into
effect.
WASHINGTON (AP) -- President Donald Trump said Tuesday he was delaying the
50% U.S. tariffs on $20 billion worth of Canadian imports after the two
countries reached a last-minute deal less than two hours before the sanctions
were to go into effect.
The announcement, which Trump made on his social media platform, buys time
for more negotiations and avoids, for now, another strain in already tense
relations between the historic allies.
"I have paused the 50% Tariffs against Canada, that were scheduled to kick
in tomorrow morning for a three day period, based on the fact that Canada and
the U.S.A., subject to the finalization of documents, have a DEAL!" Trump
posted on Truth Social.
If they had gone into effect as scheduled at 12:01 a.m. Wednesday, Trump's
import taxes would have hit Canadian products ranging from hockey sticks to
tongue depressors.
But the political impact would likely have been bigger than the economic
one. Canada had threatened to retaliate against any new tariffs with levies of
its own, aggravating a trade fight between countries that sold each other $880
billion worth of goods and services last year.
A White House proclamation said Canada had expressed a commitment to remove
measures the Trump administration considers discriminatory against U.S.
alcohol, dairy and motor vehicle exports. Canada did not immediately confirm
those commitments.
Canadian Prime Minister Mark Carney said in a statement "substantial
progress" had been made but that important work remained, confirming Canada had
agreed to the three-day delay while negotiations continued.
Carney and Trump had spoken twice by phone in the past two days about the
ongoing negotiations, including a call Tuesday afternoon, Carney's office said,
underscoring the last-minute push for a deal.
Both countries had reason to step back from the brink. Nearly 72% of
Canada's goods exports last year went to the United States. And the Trump
administration would be taking a risk by imposing a hefty new tariff -- paid by
U.S. importers who try to pass along the cost to consumers via higher prices --
ahead of November's midterm elections. U.S. voters are already frustrated with
the high cost of living.
"I don't think either side really wants these tariffs to come into effect,''
Ryan Majerus, a partner at King & Spalding and a former U.S. trade official,
said before the delay was announced. "There's a pretty strong push on both
sides to find an off-ramp here.''
Canadian Chamber of Commerce President and CEO Candace Laing said in a
statement that the three-day tariff delay offered businesses some relief but
fell short of the certainty a signed interim agreement would provide.
"This limbo state is not anyone's preferred outcome," she said, urging
negotiators to reach a deal quickly.
Trump's approach to dealing with Canada marks an extraordinary departure
from the traditionally cooperative relationship between the two countries.
Trump has hit Canadian goods with tariffs -- in a push to bring manufacturing
back to the U.S. -- and has repeatedly made inflammatory comments about turning
Canada into America's 51st state.
Trump has made tariffs the centerpiece of his second-term economic agenda.
Last year, he imposed double-digit import taxes on almost every country,
justifying them by declaring the longstanding U.S. trade deficit a national
emergency. The Supreme Court in February ruled that he'd overstepped his
authority, striking down those tariffs and setting the stage for the federal
government to pay refunds to importers.
So Trump has looked for other legal authority to impose tariffs.
To hit Canada, he reached back to the Great Depression, invoking Section 338
of the Tariff Act of 1930 to threaten 50% tariffs on products that account for
about 5% of Canadian exports to the United States.
Nearly a century ago, with the U.S. and world economies in collapse,
Congress passed the 1930 tariff law, imposing taxes on imports from around the
world. Known as the Smoot-Hawley tariffs, named for their congressional
sponsors, they are notorious among economists and historians for limiting world
commerce and making the Great Depression worse.
Section 338 tariffs have never been used before.
Section 338 authorizes the president to impose tariffs of up to 50% on
imports from countries that have discriminated against U.S. businesses. No
investigation is required to justify the levies. Nor is there any limit on how
long the tariffs can stay in place.
The U.S. is renegotiating a North American trade pact -- the
US-Mexico-Canada Agreement -- that Trump strong-armed America's neighbors into
accepting in his first term. The threat of Section 338 tariffs gives the United
States leverage to seek fresh concessions from Ottawa.
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