Donald Trump judged, on Wednesday, March 5, that Canada’s responses were insufficient to allow a compromise on customs duties, and conceded an exemption of one month for the crucial automotive sector, at the request of American manufacturers.
This first temporary exemption from customs duties of 25 % imposed Tuesday in Canada and Mexico was decided so that the major American car manufacturers “Do not undergo economic disadvantages”The White House spokeswoman Karoline Leavitt said in front of the press.
The production channels of American manufacturers are partly installed in Mexico and Canada, parts and vehicles making many back and forth during their manufacture. This exemption concerns vehicles imported as part of the free trade agreement between Canada, the United States and Mexico (ACEUM), the spokesperson said.
It was well received by the markets, Wall Street ending the meeting up, after consecutive drops, driven by automobile values. Manufacturers also have “Applaudi President Trump for recognizing” The need for this exemption, in a press release from the Automobile Mobility Policy Council, which represents them.
AND “The president is open to the possibility of other exemptions”assured mMe Leavitt, “We know that prices are increasing for Americans”She admitted, citing in particular eggs, which remain a concern.
Trump says Trudeau does not “not enough”
After a telephone call with Justin Trudeau, Donald Trump said on Wednesday on his social network, that the Canadian Prime Minister did not “Not enough” To find a compromise, especially in terms of the fight against fentanyl traffic, an opioid responsible for a serious health crisis in the United States.
Later Wednesday, American diplomacy chief Marco Rubio, “Reaffirmed” with her Canadian counterpart, Mélanie Joly, “The importance of relationships” between the two countries, while recalling that “The Trump administration would continue to give priority to the security of the Americans”According to a statement from the State Department.
Europe is preparing to be targeted in turn, a choice that the French president, Emmanuel Macron, judges in advance “Incomprehensible, both for the American economy and for ours” and he said “Hope to dissuade” Donald Trump.
Customs duties of 25 % on Canadian and Mexican products, except on Canadian hydrocarbons (10 %), entered into force on Tuesday, plunging global scholarships. A surcharge which concerns both lawyers and Mexican tomatoes as well as the construction wood or Canadian poultry. Ottawa quickly announced tariff reprisals on certain American products and assured that the list would lie over time.
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The Mexican president, Claudia Sheinbaum, for the moment reserves her response to a speech scheduled for Sunday. In the meantime, she assured, on Wednesday, that her country intended to turn to other business partners if the United States persisted with its customs duties. “The doors to the dialogue (…) must always remain open ”said Mr.Me Sheinbaum, who is scheduled to speak on Thursday by phone with President Trump.
The latter criticizes the two countries for not sufficiently fighting fentanyl traffic and believes that customs duties could force Ottawa and Mexico to do more. According to official figures for American border services, less than 1 % of the fentanyl seized in the United States last year arrived from Canada.
Encourage companies to settle in the United States
But Donald Trump also defends the use of customs duties as a commercial weapon, to encourage companies to settle in the United States in order to avoid these surcharge and protect US companies from their foreign competitors on the domestic market. He finally sees it as a means of creating new tax revenue for the federal government, he who wishes to push further the tax cuts granted during his first mandate.
These multiple uses of customs duties are increasingly concern for American companies, while indicators are starting to show signs of slowing down the American economy.
The regular investigation of the federal reserve, the beige book, stressed that “In most districts, respondents expect the impact of customs duties to their purchases leads them to increase their prices”. On Wednesday, job creations in the private sector have slowed significantly in February and the services sector in turn shows signs of concern, both due to customs duties and reductions in federal spending.
Especially since the signals are contradictory on the part of the United States which opened the door in Mexico and Canada, but did not mention China, which was imposed 20 % of additional customs duties.
And the so -called reciprocal customs duties will be effective on April 2, assured the secretary of trade, Howard Lux. This is to tax products from a country at the same level as American products are at the entrance into this same country.
