I am fielding a lot of questions about President Trump’s direct announcement today to place a 50% tariff on autos from Canada contrast against the USMCA (CUSMA) and other trade matters.
First, for President Trump this is not political; it’s pure economics. Donald Trump has been talking about this issue for 40+ years. Trump has held the same position about American manufacturing and exploitation of U.S. industrial jobs long before he officially became a politician. President Trump is not looking at the politics of the matter, nor does the midterm election play a part of the consideration.
This is the economics of the thing, politics be damned, and the Canadian politicians have no concept of how structurally important this is to Donald Trump personally. For Canada it’s political, for Trump it’s business – deliberate, direct and consequential business. There are trillions at stake.
VIA TRUTH SOCIAL – “Canada has been ripping off the United States of America for years. Their ridiculously high tariffs on our Farmers and farm products has made life impossible for these great American Patriots, and has long created a 60 Billion Dollar Deficit between our two Countries. Not sustainable, and NOT ANYMORE! On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%. Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer! On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US! They do 95% of their business with the U.S., with us, the exact opposite! Thank you for your attention to this matter!”
~ President DONALD J. TRUMP
The second aspect to the inbound questions center around the USMCA (CUSMA) and anticipated legal challenges to the 50% tariffs in violation of the USMCA trade agreement. Those questions are coming from people who don’t understand the first point above, in combination with what we have outlined for years, President Trump does not want the multilateral USMCA to remain. Trump has been very direct about this.
As to the legality of the matter. If you accept the USMCA is not valued as a reciprocal trade tool by the U.S. administration, then you set yourself up to understand there are two options available.
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