Canada and Mexico Exempt from Trump’s April 2 Reciprocal Tariffs

On April 2, 2024, President Trump announced new reciprocal tariffs for various countries but exempted Canada and Mexico. Existing tariffs on their goods remain, including 25 percent duties on fentanyl-related imports. Under the USMCA, their goods are exempt from the latest tariffs, although they still must adhere to ongoing levies. Trump announced varying tariff rates for other nations, emphasizing aggressive trade policy as he approaches the 2024 election.

On April 2, 2024, President Donald Trump announced reciprocal tariffs that sparked significant attention, particularly regarding the exclusions for Canada and Mexico. These nations were relieved as they were not subject to the new tariffs, which began at a baseline rate of 10 percent and escalated to 45 percent for other countries. Trump described the economic exploitation faced by the U.S. as being subject to looting and plundering by foreign nations.

Although Canada and Mexico avoided the new tariffs, they are not free from existing duties. Current tariffs are already applied to goods from these countries, including a 25 percent duty related to fentanyl imports and a 10 percent charge on Canadian energy and potash. Furthermore, new automotive levies were set to take effect shortly after Trump’s announcement. Thus, their exemption from the latest tariffs does not indicate that trade relations are entirely free of duties.

Under the US-Mexico-Canada Agreement (USMCA), goods imported from Canada and Mexico remain tariff-exempt. Nevertheless, should these nations negotiate changes to their existing levies, they would have to contend with the new baseline tariffs announced by Trump. Canadian Prime Minister Mark Carney expressed a resolute commitment to protect workers, stating, “We are going to fight these tariffs with counter-measures.” Additionally, Mexican President Claudia Sheinbaum is anticipated to articulate an official response following the announcement.

Trump’s tariffs also targeted multiple other countries, establishing varying rates, such as 26 percent on imports from India and up to 45 percent from Vietnam. China, facing the largest trade surplus with the United States, will incur a hefty 34 percent tariff, which could rise to 54 percent when combined with pre-existing tariffs. Throughout his 2024 campaign, Trump indicated intentions to levy a 60 percent tariff on Chinese goods, reflecting his aggressive trade stance against nations with significant trade deficits.

In summary, Canada and Mexico successfully navigated the recent reciprocal tariffs announced by President Trump, which included extensive rates imposed on various countries. Their exemption is contingent upon existing duties and the provisions of the USMCA. This situation illustrates the ongoing complexity of U.S. trade relations, particularly as the government continues to grapple with tariffs aimed at multiple nations, including those with substantial trade surpluses.

Original Source: www.hindustantimes.com