U.S. President Donald Trump has announced new tariffs targeting global imports, with Canada and Mexico receiving sharply different treatment. In a major escalation, Trump raised tariffs on many Canadian goods from 25% to 35%, citing Canada's "failure to cooperate" in fighting illicit drug flows, particularly fentanyl, into the United States. The move follows what Trump described as poor leadership in Canada and comes as part of a broader global tariff expansion.
Canadian Prime Minister Mark Carney expressed disappointment in Trump’s decision and promised to protect Canadian jobs while seeking new export opportunities. Canada is one of the many countries hit under Trump’s new trade strategy, which aims to reduce trade deficits and bring manufacturing back to the U.S.
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Meanwhile, Mexico was granted a 90-day delay on similar tariffs after Trump and Mexican President Claudia Sheinbaum spoke by phone. Sheinbaum called the conversation “very good” and confirmed the delay. Mexico avoided a 30% tariff hike on most non-auto goods by committing to continued trade cooperation.
About 85% of Mexican exports to the U.S. are shielded by the existing USMCA agreement, especially those compliant with its rules of origin. However, Trump maintained steep tariffs of 50% on Mexican steel, copper, and aluminum, and 25% on autos and non-compliant goods.
Trump also claimed that Mexico agreed to remove various non-tariff trade barriers, though no specific details were provided. The decision highlights Trump’s push for tougher enforcement and new deals as he heads toward a self-imposed Friday deadline to realign U.S. trade policy and hit back at countries he believes are not doing enough to help with economic and national security concerns.
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Beyond Canada and Mexico, the Trump administration has imposed a sweeping round of new tariffs on goods from 69 countries, including Brazil, India, Taiwan, and Switzerland. The tariffs range from 10% to 50% and are part of a broader effort to reduce U.S. trade deficits and strengthen domestic manufacturing.
Brazil was hit with a harsh 50% tariff, tied in part to its legal action against former President Jair Bolsonaro, a Trump ally. However, some Brazilian exports, like aircraft and orange juice, were spared. India faces a 25% tariff after talks broke down over agricultural access and India’s purchase of Russian oil. This move sparked a backlash from India’s opposition and caused a drop in the rupee.
The new tariffs are already having economic effects. U.S. government data shows rising prices for consumer goods including home furnishings, vehicles, and clothing with some sectors seeing the biggest price spikes in over a year. The tariffs are raising concerns about inflation and market stability.
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Trump invoked emergency powers under the 1977 International Emergency Economic Powers Act, declaring national emergencies over trade deficits and the fentanyl crisis. However, federal judges have questioned whether this authority was used lawfully. The Court of International Trade had earlier ruled that Trump overstepped his powers, and appeals court judges appear skeptical as well.
Meanwhile, China faces an August 12 deadline to finalize a lasting tariff agreement with the U.S., following tentative deals reached earlier this year. Trump has hinted at more trade deals coming soon but has not released full details. The market reaction has been less dramatic than during earlier tariff announcements, but global investors and trading partners are watching closely as the U.S. reshapes its trade relationships.
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