Canada is maintaining its reciprocal tariffs on American imports even after U.S. President Donald Trump has delayed for one month most of the 25% import duties applied to Canadian goods.
Trump has granted a tariff exemption on goods and services from Canada and Mexico that are covered by the existing United States-Mexico-Canada Agreement (USMCA) on trade that was struck during the president’s first term in office.
But despite Trump’s rollbacks, Canada is keeping its current reciprocal tariffs on $30 billion worth of U.S. goods in place. The Canadian government has also said that it stands ready to move forward with a second round of tariffs that target $125 billion of U.S. imports into the country. Trump has said that the pause on tariffs imposed on Canadian and Mexican goods will only last until April 2.
Additional Measures
Canada is also considering additional trade actions against the U.S. Ontario, Canada’s most populous province, is moving forward with plans to apply a 25% surcharge to electricity exports sent to neighboring American states such as Michigan and Wisconsin starting on March 10.
British Columbia on Canada’s west coast is planning to implement a new toll on U.S. transport trucks traveling through the province en route to Alaska. Other Canadian government officials are publicly musing about restricting potash shipments to the U.S., which is a key ingredient in fertilizer used by farmers to grow crops such as corn and soybeans.
Agriculture analysts view potash as a crucial part of the food supply. There are only a few places that produce potash and Canada is the largest global supplier. The American Farm Bureau Federation says that more than 80% of potash used in the U.S. comes from Canada. Some economists are warning about the dangers of attacking America’s food supply and how the Trump administration might react.
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