Canada pauses new tariff threats
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The tariff war with the U.S. is ravaging several economic sectors — autos, metals, appliances and consumer goods — so a major revenue drop is all but certain. Increasing spending amid that reality seems bound to result in a record-setting deficit.
The combined U. S. trade deficit with USMCA trade partners Mexico and Canada now exceeds the U.S. deficit with China, according to government data released Thursday.
While exports to the U.S. were down, trade to other countries was up. Canada sent 30.1 per cent more unwrought gold, silver and platinum group metals to other countries, including the United Kingdom, for example, and 13.3 per cent more meat products to Japan.
President Trump is pushing through with his tariff agenda, unveiling a new batch of letters to country leaders outlining tariffs on goods imported from their countries beginning in August and a warning to BRICS nations.
Canada's trade deficit in May narrowed after a record-breaking deficit in April as total exports rose and imports fell even as the impact of U.S. tariffs dented shipments south of the border, data showed on Thursday.
Trump, 79, notified Canadian Prime Minister Mark Carney of the incoming tariffs in a letter – one of dozens the president has fired off to foreign leaders this week ahead of an Aug. 1 deadline for
The letter reiterated Trump’s complaints about dairy quotas, fentanyl and the U.S. trade deficit, which is mostly fueled by American refineries’ thirst for Canadian oil. His social media post caused the Canadian dollar to immediately tumble, indicating the market wasn’t expecting this escalation.
If implemented, Trump's new 35 percent duties will be "separate from all Sectoral Tariffs," such as the 50 percent tariff on steel and aluminum imports. Trump also promised that, if Canada raises its own tariffs in response, then "whatever number [Canada chooses] to raise them by, will be added onto the 35% that [the U.S. charges]."
Helped by volatile gold shipments, the May deficit was down from a record in April and continued to reflect fluctuating tariff policy in Canada’s biggest trade partner and neighbor.
One of the largest departments in the Canadian government told employees they may face job losses as Prime Minister Mark Carney searches for spending cuts to keep the budget deficit contained.