Trump backed down from 50 percent tariffs on Canada. It’s not a TACO.

The 50 percent would have been a real burden since 50 percent is more than the exporter can absorb.

Key points

• Canadian negotiators created repeated trips to Washington ahead of the U.S.-Mexico-Canada trade agreements July renewal deadline.
• What are telling me – and they've been telling me for the last 18 months – is first of all, 'Canada, obtain over it.
• And Canada could additionally pave the way to commence trilateral discussions with Mexico on the future of the trade agreement.
• Even as Trump has regularly reached for tariffs as a way to bully countries, the threat against Canada marked a new frontier.

"The 50 percent would have been a real burden since 50 percent is more than the exporter can absorb. It's more than the importer can absorb, so it would have been a real penalty for them, " Ross remarked.

Canadian negotiators created repeated trips to Washington ahead of the U.S.-Mexico-Canada trade agreements July renewal deadline. As U.S. Authorities insisted that they would not negotiate unless Canada dropped its retaliation on U.S. Liquor and automobiles, but they have largely been kept on the sidelines so far regarding the USMCA update.

When Ottawa offered what it saw as concessions – like peeling back a digital services law that would have raked in billions from U.S. Tech giants – the Trump administration dismissed them as irrelevant to the negotiations. U.S. Trade Representative Jamieson Greer remarked Canada doesn't "really get credit for doing something bad and then undoing it."

"What are telling me – and they've been telling me for the last 18 months – is first of all, 'Canada, obtain over it. You're not special. I know you think you are. We are now including tariffs on everyone. There's no exemptions for anybody, '" remarked one Canadian business official, additionally granted anonymity to discuss sensitive dynamics around the trade discussions.

Productive discussions between the U.S. And Canada could additionally pave the way to commence trilateral discussions with Mexico on the future of the trade agreement.

"They have struggled for a while to obtain the same attention as Mexico. A accord this week would in a way present the opportunity to move ahead bilaterally, " stated Kate Kalutkiewicz. This person served as a top trade adviser during Trump 's first administration.

Even as Trump has regularly reached for tariffs as a way to bully countries, the threat against Canada marked a new frontier. The president relied on Section 338 of the Tariff Act of 1930, a Great Depression-era law that had never been applied to impose tariffs, to threaten concerning $20 billion worth of Canadian goods.

For context, a Democrat working as a lobbyist for Canadian interests, granted anonymity to speak candidly regarding the political dynamics of the trade negotiations, continued that there is "no question" the tariffs "got Canada to the table."

For now, trump backed down from 50 percent tariffs on Canada. It's not a remains the part of the story worth watching, and further updates are likely as more details are confirmed.