Donald Trump will not impose new tariffs on Canada and Mexico on his first day in office — but the threat could take form within weeks.
Speaking while signing executive orders at the White House after his inauguration Monday night, Trump said he planned to impose 25 per cent tariffs on the United States’ North American neighbours by Feb. 1.
“We’re thinking in terms of 25 per cent on Mexico and Canada because they’re allowing vast numbers of people, Canada is a very bad abuser also, and fentanyl to come in,” Trump claimed.
Earlier reports by U.S. media had suggested Trump would delay on the tariff threat, and instead issue an executive order that would direct federal agencies to investigate accusations of unfair trade and currency practices.
Responding to Trump’s comments, Finance Minister Dominic LeBlanc said Canada was prepared for whatever action the president took.
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“One thing we’ve learned is that President Trump at moments can be unpredictable,” LeBlanc said.
“We have spent the last number of weeks preparing potential response scenarios for the Government of Canada in partnership with provinces and Canadian business leaders and union leaders. So our country is absolutely ready to respond to any one of these scenarios.
During Trump’s inauguration, he said he plans to “overhaul” the U.S. trade system, and “tariff and tax foreign countries to enrich our citizens.”
“For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties and revenues,” he said. He added that this will bring in “massive amounts of money” to the country’s treasury “coming from foreign sources.”
Trump, who took office on Monday, has pledged tariffs of 10 per cent on global imports, 60 per cent on Chinese goods and a 25 per cent tariff on Canadian and Mexican products, duties that may upend trade flows, raise costs and draw retaliation.
Reuters reported that Trump’s executive will direct agencies to assess China’s compliance with its 2020 trade deal with the U.S., as well as the status of the U.S.-Mexico-Canada Agreement, or USMCA, Reuters reported.
John Bolton, who served as Trump’s adviser from April 2018 until September 2019, said in an interview with The West Block’s Mercedes Stephenson that the president-elect’s threat poses a “serious danger that we are going to fall inadvertently into a trade war.”
“I think everyone should understand a trade war is not in anyone’s interest,” he said.
Shortly after he was elected, Trump threatened to impose the new tariffs on all Canadian goods coming into the U.S. unless Canada tightened border security. The same threat was also made towards Mexico.
Foreign Affairs Minister Melanie Joly has said that if Trump goes ahead with the plan, it would start the “biggest trade war between Canada and U.S. in decades.”
— With files from Reuters and Motorcycle accident toronto today’ Sean Previl
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