When the world鈥檚 largest economy announces significant tariffs on the rest of the world the repercussions will be felt globally.
This is what has been happening after the massive U.S. tariff announcement on April 2.
That day, the U.S. president announced a baseline tariff on all imports to the U.S. Some countries are facing higher tariffs. The European Union has been hit with 20 per cent tariffs and the effect of new and existing tariffs on China works out to 54 per cent.
Canada and Mexico, two of the U.S.鈥檚 largest trading partners, were not listed in the April 2 announcement, but both were already affected by 25 per cent tariffs introduced earlier this year. Canadian oil has had a lower rate, at 10 per cent.
It is impossible to downplay the effects of these tariffs. Any changes to U.S. trade policies will have an effect around the world.
According to U.S. government statistics, the United States is the world鈥檚 largest importer of goods, with 3.2 trillion in import value in 2022. China, Mexico and Canada were the top three suppliers of goods to the U.S. that year.
The United States is also the second-largest exporter of goods, behind China, with exports worth $2.1 trillion in 2022.
Canada has taken countermeasures in response to the U.S. tariffs. Whether these countermeasures result in an escalating tariff war between the two countries has yet to be seen.
Whatever happens, one should not expect the U.S. to reverse or rescind its tariff policy.
The American president has been firm on his decision to impose tariffs, and the April 2 announcement simply reinforces his earlier statements.
Even if the decision were cancelled immediately 鈥� a highly unlikely outcome 鈥� the effects would linger. The level of trust and predictability once a part of international trade with the U.S. is now gone.
This means many countries 鈥� Canada included 鈥� will be working to revisit the way they do business with the rest of the world.
Figures from Statistics Canada showed Canada鈥檚 exports to the United States came to 55.8 billion in February, representing close to 80 per cent of the country鈥檚 total exports.
More than 63 per cent of goods imported to Canada come from the United States.
That close trade relationship between the two countries is likely nearing its end.
鈥� Black Press
