Above photo: Flickr user Photo Phiend.
Analysts lay out proposals “beyond Canadian counter-tariffs”.
Trump grants one-month exemption on auto imports.
Trump’s trade war against the US’s neighbors Mexico and Canada, as well as China, continues with sweeping tariffs on the three countries going into effect just after midnight on Tuesday, March 4. A 25% tariff was added on all imports from Canada and Mexico, and an additional 10% tariff on imports from China.
On March 5, Trump granted a one-month exemption on imports from Mexico and Canada for US automakers, following a conversation with the three largest auto manufacturers in the country: Ford, General Motors, and Stellantis, according to an announcement by White House press secretary Karoline Leavitt. Other levies remain in place.
Trump has listed fentanyl as a primary reason for imposing these new tariffs. “They’ve allowed fentanyl to come into our country at levels never seen before,” Trump said in his address to Congress on Tuesday night, referring to Mexico and Canada. Trump denounced the fentanyl crisis for “killing hundreds of thousands of our citizens and many very young, beautiful people, destroying families.”
“If the US truly wants to solve the fentanyl issue, then the right thing to do is to consult with China by treating each other as equals,” China’s embassy to the United States wrote in a post on X. “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.” China announced on Tuesday that it would impose retaliatory tariffs on food imported from the US, with a 15% tariff on imports of American chicken, wheat, corn and cotton, as well as 10% tariffs on other foods, including soy and dairy.
Mexico announced that it would strike back with its own set of tariffs if Trump’s levies remained in effect until Sunday. Canada’s Trudeau announced countermeasures immediately, imposing a 25% tariff on US imports. “This is a time to hit back hard and to demonstrate that a fight with Canada will have no winners,” Canadian Prime Minister Trudeau said in an address on Tuesday.
Beyond Retaliatory Tariffs
Some analysts argue that Canada’s close economic relationship with the US, built up over decades, is now a liability. “Thanks to decades of concerted action by Canadian businesses and governments—often working in opposition to workers and the broader public interest—the Canadian economy is now deeply integrated with our southern neighbors,” writes researcher Hadrian Mertins-Kirkwood for the Canadian Centre for Policy Alternatives, an independent research institute. “That integration, once sold on the promise of a stable, mutually-beneficial partnership, is proving to be a massive liability as the United States descends into autarky and outright fascism.”
Mertins-Kirkwood and Marc Lee outlined several proposals “beyond Canadian counter tariffs” to respond to Trump’s trade war. These include “an export tax on energy products of at least 15%,” “export quotas and bans for strategic resources,” repatriating “US-owned assets,” curtailing “US patents and copyrights,” and targeting “US oligarchs.”
“Canada must respond quickly and forcefully to this existential threat,” the researchers argue. “Doing so requires that we put heat on the American economy in the short term and restructure our economy away from American dependence in the long term.”