The New York Times reveals that Justin Trudeau spoke on the phone for approximately two hours with Donald Trump after the latter threatened to impose tariffs of 25% on all products from Canada and Mexico entering the United States. According to a Canadian source cited by the Timesthe meeting, which took place at the request of the Canadian Prime Minister, focused on trade and border security. It was described as constructive. But we do not yet really know what game the president-elect is playing.
Flavio Volpe, president of the Automotive Parts Manufacturers Association, a Canadian industry group, offered his theory to the New York daily. According to him, Trump’s threat would only be the first salvo in a negotiation aimed at forcing Canada and Mexico to join its fight against China. “How can you compete with China if prices for aluminum from Quebec, cars from Ontario, uranium from Saskatchewan and oil from Alberta are prohibitive,” Volpe said, citing some of Canada’s top exports to the United States.
One thing is certain: the customs duties envisaged by Trump would violate the Canada-United States-Mexico Agreement, some of the terms of which the president-elect would like to change. As pointed out by Washington Posthe dreams in particular of making changes to prevent China from using Mexico as an export base for its electric vehicles, steel and other goods.
But there are those who say that Trump is not bluffing. His threats are part of a protectionist policy that he hammered home and detailed throughout his presidential campaign. “The increasing specificity of Trump’s tariff threats, both in terms of amounts and countries targeted, indicates that it is quite possible that these are imminent actions rather than just blustering threats,” said the New York Times Eswar Prasad, professor of trade policy at Cornell University.
The Times describes the effects of Trump’s proposed tariffs on the United States, where voters returned the master of Mar-a-Lago to the White House largely due to their frustration with inflation:
“Costs could be particularly high for industries that rely on the tightly integrated North American market, which has been bound by a free trade agreement for more than three decades. A 25% increase in the price of imported products could make many of them too expensive, potentially paralyzing trade on the continent. The move could also lead to retaliation from other governments, which could impose their own taxes on U.S. exports.
“This in turn could cause price spikes and shortages for consumers in the United States and elsewhere, as well as bankruptcies and job losses. Mr. Trump insisted that foreign companies pay the tariffs, but those are actually paid by the company importing the products and, in many cases, passed on to American consumers. »
Bill Ackman, one of the billionaires who turned his back on the Democrats to support Trump, the threat of the president-elect is a good thing. “To be clear, according to Trump, the 25% tariffs will not be enforced, or if they are, they will be removed, once Mexico and Canada end the influx of illegal immigrants and fentanyl in the United States,” he wrote on America, in accordance with its policy of America first. This is a great way for Trump to make foreign policy changes before he even takes office. »
(Photo Getty Images)
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