After tumbling global markets and retaliatory tariffs by affected countries following the announcement of tariffs by the US, President Trump delayed some of the tariffs for Mexico and Canada on Thursday (6th March). The stock market took a hit after Trump’s tariffs took effect on 4th March.
As per reports, the US President signed an executive order to delay 25% tariffs on Canadian and Mexican goods covered under the North American Trade Agreement dismissing any links to market turbulence. Trump said that the fresh tariffs have been delayed by a month to ease the concerns of a trade war. The decision to delay the tariffs reportedly came hours after Trump had a discussion with Mexican President Claudia Sheinbaum Pardo and negotiations between Canadian and US officials.
The delay in US tariffs has provided temporary relief to automakers as auto parts cross North American borders multiple times during the production phase. The order announcing a one-month exemption on autos coming through the United States-Mexico-Canada Agreement (USMCA) reportedly came after the US administration had discussions with three big US automakers- Stellantis, Ford and General Motors. About half of the American products come through the USMCA. Trump justified the delay order as being “much more favourable for our American car manufacturers”.
Canada maintains its initial retaliatory tariffs on US imports
It is being reported that Canada has retained the retaliatory tariffs on the US imports imposed after the announcement of US tariffs on Canadian goods. However, the country has put on hold its next round of counter-tariffs. In the initial retaliatory tariffs, Canada imposed US$21 billion worth of tariffs on US goods including orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles, and pulp and paper products. The next round of Canadian tariffs worth US $ 87 billion was slated to take effect within three weeks after the initial tariffs that came into effect on 4th March. These tariffs were to be imposed on US electric vehicles, fruits, vegetables, dairy, beef, pork, electronics, steel and trucks. As a counter to the US reciprocal tariffs, Canada planned to impose levies on US imports worth $155 billion over 21 days.
Meanwhile, Douglas Robert Ford Jr., the Premier of the Canadian province of Ontario said that the province would charge an additional 25% for electricity supplied to 1.5 million Americans in response to the US tariffs. Ontario supplied electricity to Minnesota, New York and Michigan. Ford said that Ontario would retain its electricity tariffs despite the temporary suspension of the US tariffs calling for a permanent removal of the US tariffs.
On 4th March, the US President announced fresh tariffs for India and China to be effective from 2nd April. Justifying reciprocal tariffs, the US President said that other countries have been unfairly taxing the US and therefore now it is the turn of the US to tax them. He said that India imposed unfair tariffs on the US automobile by over 100% and that China imposes tariffs on US products twice the US tariffs on Chinese products.
