Trump threatens to reignite trade war with fresh 50% tariffs on Canada

Donald Trump threatens to reignite trade war with fresh 50% tariffs on Canada This is an on-site version of the White House Watch newsletter. You can read the previous edition here. Sign up for free here to get it on Tuesdays and Thursdays. Email us at [email protected] Good morning from Washington DC and welcome to White House Watch. Here’s what we’re looking at in today’s edition: US will hit Canada with 50 per cent tariffs Maga Inc’s $400mn war chest US petrol prices climb back above $4 There’s no rest for the weary in US trade policy. Donald Trump’s administration said on Monday it would hit Canada with tariffs of 50 per cent on a wide range of goods. The move that threatens to reignite Trump’s trade war comes as the president is poised to unleash fresh tariffs on dozens of other countries as soon as this week, even as his advisers warn him against risking the economic shocks of his original trade war ahead of the midterm elections in November. US officials have prepared options to allow Trump to launch new tariffs on dozens of countries as the president’s 10 per cent global duties expire later this week, according to people briefed on the plans. The tariffs on Canada will take effect in 30 days and will contain exemptions for energy, potash, critical minerals, fish and other products. Goods that are already subject to US national security tariffs, which include steel and aluminium, will also be exempt from the new duties. Canada is the US’s second-biggest trading partner, with goods trade between the two amounting to nearly $720bn last year. “At the outset of the president’s trade policy, which he implemented earlier last year, there were only two countries that retaliated against the United States: the People’s Republic of China and Canada,” said a senior administration official. Senior administration officials accused Canada of engaging in unfair trade practices, saying its provinces had halted the purchase of US alcohol, slapped tariffs on US cars and discriminated against American cheese. The global trade skirmish had eased slightly after the US Supreme Court earlier this year knocked down the president’s global emergency tariffs. Monday’s move now turns up the heat. The latest headlines Maga Inc, the main fundraising group supporting Donald Trump, has amassed a war chest of more than $400mn ahead of this year’s midterm elections. Trump is preparing to meet Lebanese President Joseph Aoun as the US pushes ahead with a peace deal between Israel and Lebanon. A federal judge has temporarily paused Paramount Skydance’s $110bn acquisition of Warner Bros Discovery. A Mexican cartel founder has agreed to a $15bn forfeiture order, one of the largest in US legal history, and a life sentence. The Federal Reserve’s independence is still under threat, warns former Federal Trade Commission member Rebecca Slaughter. What we’re hearing Monday night was the tenth consecutive night of US strikes on Iran, as the two sides trade tit-for-tat blows. The latest escalation of the nearly five-month conflict has seen four US service members killed since last Friday, while US petrol prices have climbed above $4 again. In a war launched on the premise of defeating Iran’s nuclear programme, Trump administration officials now increasingly concede that the fighting at this stage is all about the Strait of Hormuz — the critical trade route that Iran only turned into a powerful chokepoint after the war started. US secretary of state Marco Rubio told reporters on Monday that stopping Iran from attacking ships in the strait was now “the only reason why the US is conducting strikes”. He also acknowledged that US efforts to find a “diplomatic solution” had failed. “We’ve tried multiple times with Iran, and we’ll continue to try,” Rubio said. In the meantime, “the United States will do and continue to do what it needs to do to protect global shipping.” But “other countries need to begin to step up . . . to help carry that burden,” Rubio added. “It is not the United States’ job to protect shipping for the entire planet forever.” Viewpoints Edward Luce asks: Why does the world trust China more than America? Trump’s foreign policy legacy is likely to be defined by Iran. It’s not looking good, notes Gideon Rachman. FT Alphaville’s Robin Wigglesworth examines the “decayed” impact of Trump’s Truth Social bombs. The patience of the bond markets under Trump will ultimately wear thin, argues John Plender, and the crunch will come within the next 12 months. Comments