This week, Donald Trump has released a series of new trade deals. He’s under the gun by fast-approaching deadlines to renegotiate harmful trade pacts with Canada. August 1 is just around the corner, and Trump is issuing a new, dramatic threat. He’s threatening high tariffs on their imports if they don’t agree to a settlement quickly. This newest action foreshadows his administration’s continued dedication to rattle the global international trade status quo.
In a subsequent letter to the same countries, including Canada, Trump doubled down on his threats. He explained that without a renegotiated agreement, the tariffs could jump to as much as 35 percent. He emphasized that he is prepared to take significant measures to protect American interests, stating, “I will always give up Tariff points if I can get major countries to OPEN THEIR MARKETS TO THE USA.”
Recent Trade Frameworks
Trump’s announcement comes on the heels of his unilateral declaration of framework agreements for trade deals with both the United Kingdom and Vietnam. He’s bragged on social media about other successful negotiations, too, like those with Japan and the Philippines. Trump’s approach underscores his belief that tariffs can be effective tools in encouraging other countries to open their markets to U.S. goods.
To be clear, the White House has recently made clear that affected tariffs would not apply to imports that meet the requirements of the Canada-U.S.-Mexico Agreement on trade. Japan will face a 15 percent tariff, down from the original proposal of a 25 percent tariff. The Philippines will see a 19 percent tariff, down from the hair-raisingly proposed 20 percent. At the same time, Indonesia will still face a 19 percent tariff – an improvement from the originally proposed 32 percent but still steep.
“Another great power of Tariffs. Without them, it would be impossible to get countries to OPEN UP!!! ALWAYS, ZERO TARIFFS TO AMERICA!!!” – Donald Trump
Ongoing Trade Investigations
Indeed, Trump has already launched two separate trade investigations targeted at the automobile sector. To advance these efforts, he’s utilizing Section 232 of the Trade Expansion Act of 1962. The investigations are aimed at national security threats related to imports. They can inspire further reforms in U.S. trade policies.
This week, Canadian Prime Minister and new Bank of England Governor Mark Carney is in Washington. Additionally, he’s engaged in ongoing negotiations settling bilateral and multilateral trade agreements. Carney acknowledged the complexity of the negotiations, stating, “They’re complex negotiations and we’ll use all the time that’s necessary.”
The now-looming tariff deadline is adding pressure to each side. They need to come to an agreement soon to prevent serious economic consequences for their countries.
Future Implications
As the August deadline approaches, Trump’s administration remains adamant about protecting American economic interests while encouraging other nations to embrace more open trading practices. Duties on copper imports are scheduled to go into effect on August 1 as well, affecting construction, automotive, and other industries.
