Last March, President Trump put his foot down and started on the path of fixing long-term issues with Canadian trade agreements. The US loses a significant amount of steel and lumber business to the north, who frequently undercuts American pricing, leading companies to source their products from Canadian providers before American providers. At the time, the POTUS called Canadian trade a “national security risk,” and slapped down heavy tariffs to drive business back home.
• Tariffs first went into place last March, and levied 25 percent duties on steel and 10 percent duties on steel. However, immediate controversy, complaints from American manufacturers, and threats of retaliation forced the President to temporarily exempt Canada.
• Naturally, Canadian leaders were less than thrilled with the tariffs. Prime Minister Justin Trudeau called the attempt at restriction “insulting” and dangerous. He also indicated that the tariffs wouldn’t seriously harm Canadian jobs, but would also have an immediate negative effect on American production and manufacturing companies.
• Last Thursday, the current administration permanently lifted the tariffs and restrictions. Tariffs on Mexico and the European Union, most of which were similar in nature, were also lifted at the same time.
• Part of the problem appears to be that countries like Canada, the EU, and Mexico, refuse to come to the table and set an agreement that works for all parties. Right now, influences from all three companies have severely impacted US steel industries, resulting in the complete shutdown of certain manufacturing plants.
• The idea that Canada is a “national security threat” comes from the theory that, if the US cannot produce enough steel to sustain itself within the country, it is left at the mercy of another country’s governance if needs ramps up.
• In response to the tariffs, Trudeau approved nearly $16 billion in retaliatory tariffs on common US products, including toilet paper and office supplies. The northern country will source these products from other countries, including China, instead.
• President Trump, Prime Minister Trudeau, and several other leaders are expected to discuss the current trade war at next week’s G7 summit. It wasn’t immediately clear how they would proceed or what decisions might be made.