Trump just upped tariffs on Canada by 10 percent.
Trump Cancels Trade Talks with Canada Over a Ronald Reagan Ad
Yesterday, I noted Trump Cancels Trade Talks with Canada Over a Ronald Reagan Ad
Reagan was right then, and he is right now.
Days before Trump canceled trade talks with Canada via his Truth Social platform, he had publicly minimized the ad, which the Ontario government started running in the U.S. earlier this month. At an event Tuesday with Republican senators, Trump said he had seen the ad and said, “If I was Canada, I’d take that same ad also.”
The Ontario ad uses audio from a 1987 radio address delivered by Reagan, in which he explains that despite putting tariffs on Japanese semiconductors in that year, he was committed to free-trade policies. While tariffs can look patriotic, Reagan said, “over the long run such trade barriers hurt every American worker and consumer,” lead to “fierce trade wars” and result in lost jobs.
President Reagan’s Radio Address on Free and Fair Trade on April 25, 1987
Reagan was right then and he is right now. Please play the video.
Canada’s Ad
Next please play the actual 58 second Canadian ad.
Trump calls it “fake news”. The Reagan Foundation is throwing a hissy fit too. But there is nothing out of context about the ad at all if you play both videos.
Trump’s ignorance and pettiness did not stop there.
Trump Ups Tariffs on Canada by 10 Percent
The Wall Street Journal reported Trump Says He Will Raise Tariffs on Canada by 10% Over Ontario Ad
“Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10% over and above what they are paying now,” Trump posted on his Truth Social platform on Saturday.
U.S. tariffs on Canada currently stand at 35%, with energy products at 10%, but goods that comply with the U.S.-Mexico-Canada Agreement, or USMCA, are carved-out of the duties, meaning that about 85% of Canadian exports to the U.S. come in tariff-free.
The White House didn’t respond to a question on when the new tariffs take effect, if USMCA-compliant goods would be exempted on the additional levies, and what authority the U.S. is using to impose these tariffs.
Calculated Ploy?
The ad was by Ontario’s premier, Doug Ford.
He is leader of the Progressive Conservative Party.
Question of the Day
Erica York at the Tax Foundation asked “Is the new 10% tariff on imports from Canada related to the fentanyl emergency or the reciprocal trade emergency or are hurt feelings also now a national emergency?“
Thunderbay commented “When Ford went ahead and still aired the ad during the World Series game, I think this had to be the gambit- to goad Trump into doing something stupid to destroy his own national security legal argument for tariffs for the Supreme Court case.”
Then again, hurt feelings just may be a national security item.
Tariffs Are Redistributive
Indeed! Trump promises to use tariffs to pay off the damage he caused farmers.
Suffering small business manufacturers will pay to bail out suffering farmers.
In what universe does this make sense?
Impact on Small Businesses
I have discussed the impact on small businesses on numerous occasions.
The current cost estimate is $85-$95 billion. And that is not paid by Canada as Trump ignorantly states.
York commented “We had a tariff tracker update ready to go for Monday and wouldn’t you know it is already out of date.”
“If the Supreme Court rules that the IEEPA tariffs may remain in place, we should expect even more price hikes to come.“
Trump vs Reagan
Who’s the Enemy?
What’s the Reciprocal Formula?
Yes, I do remember. The formula has nothing to do with tariffs at all.
Reciprocal Tariff Formula
Tariff Percent = ((Imports – Exports) / Imports) * 50
Tariff Percent = (Net Imports / Imports) * 50
One can easily see that reciprocal tariffs have nothing to do with tariffs at all. But that’s the formula.
Trump “We charge them what they charge us.”
Moreover, Trump made huge math errors. For example, under Trump’s definition we owe Brazil and the UK billions of dollars.
Trump had to correct for that by setting a minimum tariff at 10 percent.
For discussion, please see Letters Show Trump Sticks With Ridiculous Definition of Reciprocal Tariffs
But hey, that’s not what matters now. Trump’s feelings are hurt. And that’s good enough for another 10 percent.
And in case you missed it, please see Trump Sanctions About to Cause a Serious Auto Chip Shortage
