In a shocking move, the Trump administration has decided to triple tariffs on Canadian softwood lumber. The new rate increases dramatically over 25% to 35%! This amendment comes at a time when the majority of Canadian products remain tariff-free. Consequently, Canadian exporters today find themselves entering an increasingly difficult and complicated trade environment. The U.S. has now agreed to not raise any further tariffs on Mexico for another 90 days. Until Congress provides a durable solution legislation, this decision gives only temporary relief to Mexican trade interests.
Under former President Donald Trump, the administration imposed arbitrary deadlines on countries to conclude their trade deals. Once that deadline went by, a clarification on the administration’s decision with regard to the tariffs was made known. Additionally, today’s announcement adds tariffs on over 90 other countries. This action is a considerable indicator of the U.S. government’s more aggressive posture towards altering its international trade partners to its own favor.
This recent leap in tariffs on Canadian goods marks a new turn in U.S.-Canada trade relations. All Canadian products benefit from these tariff exemptions currently. The higher rate would be especially painful on industries that rely on vigorous cross-border trade with the U.S. Business and economic analysts warn that these abrupt changes would destabilize current supply chains and result in billions of dollars in added expenses passed on to consumers.
Just south of the border, Mexico’s extended stay from escalating tariffs provides a strikingly different picture. The U.S. government has decided to renew the pause on new, escalated tariffs against Mexico for another three months. This decision would provide a significant competitive advantage to Mexican exporters. It will assist them in avoiding raising prices in the U.S. market during this dangerous period.
These tariff increases are part and parcel of the bitterly protracted trade negotiations and bitterness. They do represent the trade policies that were executed under the prior administration. The U.S. has become increasingly aggressive on international trade, imposing new tariffs on more than 90 countries. In making this move, they hope to put the U.S. in the driver’s seat for how we define our economic relationships.