U.S. President Donald Trump has introduced a 35% tariff on imports from Canada, despite recent diplomatic relations established at the G7 summit. This move raises concerns about the possible escalation of a trade war between the two countries.
35% Tariff: Between Handshakes and Tariff Uppercuts
Trump, during a meeting with Mark Carney—who was recently in Washington—announced the introduction of a 35% surcharge on Canadian goods unless actions are taken to stop fentanyl trafficking. This measure will go into effect on August 1. Canada has already faced high tariffs on cars, aluminum, and steel. The Canadian economy is heavily reliant on exports to the U.S., which puts pressure on its growth.
Who Wins in This Economic Game?
Not all products will be affected by the new tariffs. The USMCA trade agreement protects a significant portion of trade, especially in the energy sector. Some experts believe that goods like fertilizers and pharmaceuticals may be excluded from the new surcharges. However, the nature of these threats creates uncertainty, complicating long-term planning for businesses in both countries.
Markets React to Trump's Threats
Markets reacted to Trump's announcement with fluctuations: U.S. indices fell, the Canadian dollar weakened, while gold reserves increased. This warns that uncertainty in the economy may continue to rise, creating additional challenges for financial markets in both the U.S. and Canada.
The trade disputes between the U.S. and Canada, along with other threats in the face of global economic challenges, highlight how unstable and tense international trade can be in modern conditions. Services and platforms are bracing for the repercussions, but the whole world is closely watching these developments.
