Cnn
–
A day after offering Canada a one-month return to punishment, practically 25% fee, President Donald Trump has threatened new tariffs as soon as Friday in Canadian raw materials and milk. It is another turn in a snake trade policy that seems to be moved every hour.
“Canada has given up on us for years in wood and dairy products,” Trump said at an Oval Office address on Friday, citing the fee approximately 250% of Canada for US Dairy Exports to the country. Trump said America would match those dollar-to-dollar fees.
“We can do it as soon as possible today, or we’ll wait until Monday or Tuesday,” Trump said. “We will charge the same. It’s not right. It has never been right, and they have treated our farmers badly. “
Canadian Minister of Trade Mary Ng withdrew to Trump’s comments, saying his claim that Canada was “removing” the United States were not “true”.
NG said Trump’s proposed dairy fees and raw materials are “fully unjustified”.
“I learned about it as I was walking at this press conference,” he told journalists. “These fees if imposed on that order of size are fully unjustified.”
Trump’s announcement gave investors, businesses and consumers another strong dose of whip. Only the day before, Thursday, Trump announced a one-month pause on all tariffs in Canada and Mexico on products that match the US-MEXIC-KANDA Free Trade Treaty, known as USMCA. This had given, at least temporarily, many industries, especially autos and agriculture, a great sigh.
On Friday Trump said more “changes and adjustments” for tariffs should be expected in the future.
“There will always be some modifications,” Trump said from the Oval Office. “If you have a wall in front of you. Sometimes you have to go around the wall instead of through it.”
Stocks, which were lower to start a day after a mixed bag of a job report initially fell after the threat of Trump’s tariff, but increased after the chairman of the Jerome Powell Federal Reserve offered a largely positive view of the economy. Dow ended the day with about 222 points, or 0.5%. The S&P 500 wider rose 0.6%, and the heavy technology nasdaq increased by 0.7% after falling into the territory of Thursday correction-a 10% decrease of its most recent.
The markets have fallen deep into red since Trump took on the task, with Nasdaq’s main declines. S&P 500 has decreased about 3% since the day of inauguration, in large part due to economic uncertainty.
“The market has problems to digest the multidimensional chess Trump and its team are playing,” said Michael Block, market strategist in the seven capital. “This multidimensional game of chess is not going well for the great master. There may be a method of dementia. He may be trying to confuse the leaders of the world. But the market is saying to be confused. We don’t like it.”
Trump’s threat on Friday added more uncertainty to an economy that has shown cracks in its foundation and may be at risk of slipping if businesses and consumers grow nervous about the economic policy of the administration. The stretches are increasing, employment is slowing down, the consumer’s confidence is eroding and the inflation is getting again.
Tariffs can worsen all these factors.
Canada imposes excessive tariffs on certain dairy products, including a milk fee that can be up to 241%, many for the plot of dairy farmers, who have complained for years that the border nation has been treating them unfairly. But it is a sliding rate fee that begins only after US milk exports hit a certain quota – a level of US exports has not reached due to the measures Canada has decided to protect its domestic milk industry.
“The American dairy is grateful for the Trump administration efforts to keep Canada responsible for these protectionist measures,” said Becky Rasdall Vargas, a senior Vice President of Trade and Power Policy at the International Dairy Food Association, said in a statement. “At the same time, a prolonged tariff war with our senior trading partners will continue to create unsafe and additional costs for US dairy farmers, processors and rural communities. We encourage Canada and the United States to negotiate a resolution on these issues – both Canada trade barriers to US exports and targets.”
In 2023, a panel of commercial disputes decided in favor of Canada, arguing that high import taxes did not violate USMCA. Wisconsin’s Democratic senator Tammy Baldwin made the decision, arguing that she was creating an unfair burden on her state’s dairy industry.
“Wisconsin milk farmers work hard every day to bring world -class products to the market, and they deserve a playing field with their global competitors,” Baldwin said in the wake of November 2023. “This decision flies in the deal that our country made with Canada and decides in Wiscons’ dairy products.”
But Trump, who often complained about high milk tariffs in his first mandate in office, did not negotiate the most reasonable tariffs in the USMCA treaty, which he signed.
Despite the complaints and the high alarming number, the Canadian dairy is not an important export, and a 241% reciprocal fee for milk is unlikely to do significant economic damage for each country.
Trump has criticized Canadian US lumber tariffs for several weeks, claiming America should respond in nature. He has claimed that America can do without Canadian lumber.
An executive order Trump signed on Saturday said America has an “abundance of wood resources that are more than appropriate to meet our indoor wood production needs.” It’s not that simple, industry experts argue: they warn that tariffs can end up growing raw materials and construction – and even push prices of flats for consumers.
The United States has 300 billion trees, but economists and household builders warn that America currently has no industrial ability to meet the demand and that imposing a significant tariff on Canadian raw materials can further aggravate the continuing crisis of housing affordability.
Wooden is a critical ingredient in the US house construction industry, and the United States resources about 30% of the soft timber that uses every year from Canada. Imports of raw materials from Canada are already undergoing 14.5%anti-dumping tasks.
This story has been updated with additional contexts and developments.