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

President Trump’s April 2 tariffs largely exempted Canada and Mexico, allowing them relief from new surcharges while existing tariffs remain. Existing trade agreements and prior levies on specific imports played a critical role in their exemption. Overall, Trump’s tariff strategy involves varied rates on numerous countries, impacting trade dynamics significantly.

On April 2, President Donald Trump announced sweeping reciprocal tariffs, emphasizing that the U.S. had been “looted, pillaged, raped, plundered” by other nations. Canada and Mexico were notably exempt from these latest tariffs, which range from a baseline of 10% to as high as 45%. This exemption allows these neighboring countries to avoid the immediate economic impact of the new tariffs that are aimed at other nations.

Although Canada and Mexico escaped the April 2 tariffs, they are not entirely free from U.S. trade actions. Existing tariffs on Canadian and Mexican goods remain effective, with new levies specifically targeting automotive products set to be implemented shortly thereafter. Notably, previous tariffs include a 25% duty on fentanyl-related imports and a 10% charge on Canadian energy and potash.

Under the US-Mexico-Canada Agreement (USMCA), goods from Canada and Mexico continue to be exempt from these additional tariffs, barring any changes in trade terms. However, should the two countries negotiate new deals regarding tariffs, they will still encounter Trump’s baseline rate under any agreements.

In response to the tariff announcements, Canadian Prime Minister Mark Carney stated, “We are going to fight these tariffs with counter-measures. We are going to protect our workers.” Meanwhile, Mexican President Claudia Sheinbaum is expected to offer her country’s official stance on the issue in an upcoming press conference.

Interestingly, Trump’s new tariffs do not apply to countries such as Russia, Cuba, Belarus, and North Korea. These nations face existing sanctions that limit their trade possibilities, which the White House cited as a reason for their exclusion from the new tariffs. The tariffs affect multiple countries: India faces a 26% tariff, while the EU will see a 20% tariff. Other nations like Vietnam and Japan will encounter even higher rates that could reach up to 45%.

China, facing the largest trade surplus with the U.S., will be hit with a 34% tariff, which can escalate to 54% when considering previous tariffs related to the fentanyl crisis. During his 2024 campaign, Trump suggested the implementation of a 60% tariff on Chinese goods, indicating ongoing tensions in U.S.-China trade relations.

Canada and Mexico successfully avoided the new tariffs imposed by President Trump on April 2, largely due to existing trade agreements and tariffs already in place. While they are exempt from the new tariffs, they must navigate previous trade duties and negotiate possible impacts of future levies. The broader implications of Trump’s reciprocal tariff strategy underscore significant shifts in U.S. trade dynamics with multiple nations, especially China and the European Union.

Original Source: www.hindustantimes.com