After decades of unfair treatment of U.S. businesses who export to Canada, the Great White North has escalated fears of a trade war by levying more tariffs against U.S. manufacturers.
For Canada, tariffs of 10 percent are being imposed on about $12.5 billion worth of U.S. products. Starting Sunday, a wide range of U.S. staples were hit, including chocolate, ketchup, yogurt, beef, caffeinated roasted coffee, orange juice, maple syrup, salad dressing and soups.
While Canada and some in the U.S. media blame the trade row on President Trump who has promised to renegotiate unfair trade deals, Canada’s ridiculous tariffs on American dairy products are at the center of the disagreement.
“Canada charges the U.S. a 270% tariff on Dairy Products!” Trump tweeted in June. “Not fair to our farmers!”
Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!
— Donald J. Trump (@realDonaldTrump) June 8, 2018
Canada also signaled last week that it was losing interest in a fair trade agreement saying that it doesn’t think the renegotiation of NAFTA will happen.
Trump said Friday that he didn’t see a deal happening on NAFTA until after the November mid-term elections.
As both the U.S. and Canada back away from NAFTA over the dairy tariffs, Trump has offered Canada a simple solution: free trade.
In a press conference after the June G7 meetings, the Trump administration said they had offered a true free trade proposal to the entire group, which includes Canada.
“Zero tariffs, zero non -tariff barriers, zero subsidies,” Trump’s National Economic Council Director Larry Kudlow said.
If Canada is willing to drop all tariffs against the United States and its internal subsidies, the Trump administration has proposed to do the same. Instead, Canada has chosen to escalate a trade disagreement further towards a trade war.
The ultimate answer may be the cancellation of NAFTA and two independent trade agreements: one between Canda and the U.S. and another between Mexico and the United States.