Chaos. Doubts. Misunderstanding. That’s how the last few days have been in several places around the world in the face of the escalation of the trade war by Donald Trump, who has announced tariffs against copper, Brazil for its treatment of Jair Bolsonaro, and countries as varied as Sri Lanka and Moldova.
In the last few hours, Canada became the most recent target of the Republican president, threatening to impose a 35% tariff starting on August 1st. He emphasized that he could consider an adjustment if the country helps stop the flow of fentanyl entering the United States or eliminates its barriers.
Why will Trump impose a 35% tariff on Canada?
In a letter similar to the ones the Republican leader began sending this week to some trading partners with the new figure that will apply starting next month, Trump warned Prime Minister Mark Carney that if his country raises tariffs in turn, the chosen figure will be added to the announced 35%.
Como es tradicional a su estilo grandilocuente, alejado de las normas diplomáticos que conducen las relaciones entre países, especialmente los que son aliados, Trump publicó en la red social que controla, Truth Social.
According to his note, fentanyl trafficking is not the only challenge Washington faces with its neighboring country. His tariff and non-tariff policies, in his opinion, cause unsustainable trade deficits for the United States, which represent a “major threat” to both its economy and national security.
Trump recalled that he initially imposed tariffs on Canada precisely to address the “crisis” that drug causes in the United States, which he partly attributed to Ottawa’s “failure” to stop it.
“Instead of working with the United States, Canada responded with its own tariffs,” criticized in that letter, where it is remembered that there are no tariffs for those companies that decide to cross the border and settle in US territory."
The letter added that if Canada collaborates in stopping the passage of that drug across the border, Washington will consider “maybe” making an adjustment to the announced figure, which could be modified “upwards or downwards” depending on the relationship with the country.
“There will be no tariffs if Canada, or companies from your country, decide to build or manufacture products within the United States, and in fact, we will do everything possible to grant approvals quickly, professionally, and routinely,” adds Trump’s letter.
Trade war against a good part of the world
Trump has promised to continue with these tariff threat letters until each trading partner reaches a bilateral agreement, after announcing on April 2nd a global additional tariff of 10% and a higher one for countries with high trade deficits in goods in favor of the United States, something he referred to as “reciprocal” even though it is not.
On April 9, the date on which those “reciprocal” tariffs came into effect, Washington announced a truce that expired this past Wednesday and was extended until August.
Trump and Carney had set out to reach a resolution on bilateral trade negotiations to avoid a new round of tariff retaliations.
Among those who have received similar letters this week are Japan, South Korea, Myanmar (Burma), Laos, Cambodia, Thailand, Serbia, Bangladesh, Indonesia, South Africa, Bosnia and Herzegovina, Tunisia, Kazakhstan, and Malaysia.
In the case of Brazil, the 50% tariffs were justified in retaliation for the impeachment of former president Jair Bolsonaro, an almost unprecedented measure in the Western world.
In an interview with NBC News’ Kristen Welker, the President of the United States said that “we will tell all the remaining countries that they will pay, either 20% or 15%. We will determine it now,” even though the current general tariffs are set at 10%.
Contrary to the analysis of most stock market specialists, Trump stated, “I think tariffs have been very well received. The stock market reached a new high today.”