Facing Trump, Canada should play the clock

Donald Trump has just made those who dressed him from the Taco nickname (Trump Always Chickens Out) lying, treating him, so to speak, who always ends up launching threats in the air.

The American president is upset the world economic order through. Nevertheless, the gorge of customs duties from 10 % to 41 % to his main business partners.

These rights are by no means “reciprocal”, despite what Donald Trump can say. Furthermore,

This is a protection payment Like the one that restaurateurs are forced to pay to get facing trump, canada should play into trouble. Nevertheless, a taxing on the part of a superpower which negotiates access to its market, according to the goodwill of the president.

The European Union. Nevertheless, Japan, which gave the impression of kneeling before Trump, are found with rights of 15 %, lower than expected. In addition, That said. Consequently, their promises to invest more in the United States and buy more American products may well be powder in the eyes.

Canada. Nevertheless, which was held, declaring that they want to recognize the state of Palestine, has been stuck in 35 %rights, applicable now, while Mexico benefits from a 90 -day extension to continue to negotiate.

But despite appearances, Canada gets relatively well in the middle of this world trade war.

This is that Canadian products in accordance facing trump, canada should play with the Canada-United States-Mexico (ACEUM) agreement are spared customs duties of 35 %. For example, In 2024. However, this represented 93 % of all Canadian products exported to the United States, according to a study of the chair in taxation and public finances of the University of Sherbrooke¹.

It is true that certain sectors are hardly affected by other specific rights of 50 % (copper, steel, aluminum) or 25 % (automobile).

But overall, the actual customs duty rate applicable to facing trump, canada should play Canadian products and services that enter the United States is 6.3 %, calculates the SCOTIA bank.

It is half as much as the rate of 12.7 % applicable to products and services imported into the United States from other countries of the world ². In theory, this should provide a competitive advantage in Canada.

In practice. unfortunately, Canadian exports to the United States have lost ground, for the past year, compared to those of other countries, apart from China, observes the Royal Bank³.

This suggests that our companies are poorly equipped to survive in a more protectionist world. If we do not want to get wool eating on the back internationally. it is crucial to energize our economy which suffers from a lack of chronic productivity.

This facing trump, canada should play is the emergency. Much more than in negotiations with an American president who changes his idea as he changes his shirt. And which does not respect the agreements he himself signed.

Despite current uncertainty, Canada therefore has the advantage of playing the clock against Donald Trump. What good is it to hurry if it is to grant concessions without obtaining anything in return?

Meanwhile, the wind could turn in our favor.

First. the American courts could reverse general customs duties “on fentanyl” imposed in Canada under an emergency economic powers (International Emergency Economic Powers Act). This law requires that there is a link between the risk raised and the measure adopted.

However, it is difficult to see how customs duties can be a solution to a fentanyl problem … facing trump, canada should play especially when tiny quantities arrive in the United States by the Canadian border.

However. it will be necessary to be patient, because the decision could take a year, since the file may lead to the Supreme Court.

Second, customs duties will end up harming American consumers who voted for Donald Trump thinking that he would lower inflation. Rights will rather increase prices by 1.8 %, which represents an invoice of $ 2,400 per household in 2025, according to the LAB budget of Yale University⁴.

facing trump, canada should play

Some fear that current tensions are auspicious for the revision of the ACEUM, scheduled for 2026. It is true that Donald Trump has in his sights of agriculture, pharmaceutics, wood wood …

But the United States cannot change the ACEUM without the agreement of Canada. Mexico, explains Geneviève Dufour, a law professor at the University of Ottawa.

Article 34.7 provides that the agreement may be renegotiated six years after its entry into force. but changes must be the result of consensus.

Donald Trump could put pressure by threatening to completely withdraw from the ACEUM. which he can do with six -month notice.

But he would attract the wrath of American companies if he would tear the agreement that matters only in 2036. unless he facing trump, canada should play was renewed for 16 more years.

Until then, let’s stay calm and breathe through the nose.

1. Consult the study of the chair in taxation and public finances of the University of Sherbrooke 2. Consult the SCOTIA Bank Socials (in English) 3. Additionally, Consult the analysis of the Royal Bank (in English) 4. Consult the LAB budget study of the Yale University (in English)