The US President Donald Trump does another tariff and signs an executive order on Wednesday, which will all make cars produced in the USA with strong import taxes.
Trump said that the United States will apply a 25 percent tariff to these imports, but it is not clear when they would apply.
The President said the auto tariffs would start on April 2, but suggested that they could start with a base set of 2.5 percent.
“What we will do is a tariff of 25 percent on all cars that are not achieved in the United States. If they are hit in the USA, there is absolutely no tariff. We will start with a basis of 2.5 percent what we were and we will go to 25 percent,” Trump told reporters in the Oval office.
Cars are the second largest Canadian export after oil and by far the most lucrative products that Canada sells to the world, connected to hundreds of thousands of Canadian jobs.
This makes these tariffs more potentially more important than one of the other Trump trade threats, including the 10 percent release of energy and the 25 percent tariffs for steel and aluminum.
However, the effects depend on whether the tariffs apply to fully assembled cars or contain automotive parts. The US and Canadian auto industry is integrated so that parts often exceed the border several times.
Shortly after Trump signed the executive regulation, Ontario’s Prime Minister said Doug Ford, Canada had to fight against the new tariffs – and demanded retaliation duties that “maximize the pain for the Americans”.
“I feel terrible for the Americans, but it’s a person, it is President Trump who creates this chaos,” he said reporters in Queen’s Park. “We won’t turn around. We’ll do everything we can.”
Flavio Volpe, President of the Automotive Parts Manufacturers’ Association, said it creates a paralyzing uncertainty for the industry – and not just in Canada. The constant, always developing tariff threatening also scares investors in the United States, he told CBC News.
“(Trump) moves the sticks twice a day,” he said on Wednesday, waiting for the announcement. “You don’t know what to expect when you get up in the morning.”
Before the announcement, Volpe predicted a tariff of 25 percent, but with a few exceptions, possibly for North American parts that were traded according to the rules of the deal itself, the Trump itself, the State-Mexico Agreement standardized by Canada.
Canada is indeed a rare trading partner for the USA in contrast to the rest of the world. It actually buys more cars and parts from the USA as sold.
The first Trump administration provided a report on Auto Zölle and hardly mentioned Canada. It was shown that Canada’s share of North American car production has been relatively stable since the 1980s and that the real shift from US production to Mexico comes.
However, this second Trump government is taking a more aggressive manner a trading inspectionism and the threat in the hope of steering production into the USA
