It’s another day of chaos thanks to Donald Trump’s trade war.
Confusion and frusstration reigned for Canadian businesses Tuesday as the U.S. Customs and Border Patrol started charging a new global tariff on imports Tuesday at 10 per cent, rather than the 15 per cent threatened by the U.S. president on Saturday.
That bump to 15 per cent, in turn, came just a day after an angry Trump lashed out at a U.S. Supreme Court ruling against some of his other tariffs, and vowed a new global tariff — at 10 per cent.
The head of the association representing small businesses in Canada could only shake his head at the mayhem.
“It’s just insane that businesses have to deal with this level of uncertainty,” said Dan Kelly, CEO of the Canadian Federation of Independent Business. “It’s enormously challenging.”
While the new tariff maintains an exemption for goods which meet the rules of the Canada-U.S.-Mexico Agreement on trade, many small businesses ship products which don’t fully qualify for the exemption, Kelly said.
Canadian exports to the U.S. which didn’t qualify for the CUSMA exemption had previously faced a 35 per cent tariff, so replacing it with the new levy — whether it’s 10 or 15 per cent — is still a measure of progress, Kelly said. But he’s still not exactly breathing a sigh of relief.
“It’s a temporary victory,” said Kelly. “The main business impact of the whole tariff regime is the uncertainty, and we now have another round of uncertainty in the whole system.”
Friday’s ruling shot down Trump’s tariffs issued under the International Economic Emergency Powers Act.
He’s already threatened to use other legislation to issue further tariffs, including sector specific ones already hammering steel, aluminum and softwood lumber exports to the U.S. from Canada.
“Whether it’s 10 or 15 per cent, he’s indicated his intention to use even more obnoxious tariffs,” said Kelly, adding that uncertainty is still the name of the game. “If anything, one out of every five threats materializes. It’s hard to know what’s bravado and what’s reality.”
Veteran international trade lawyer John Boscariol suspects it’s a matter of the paperwork catching up to Trump’s mouth — or social media posts.
“Although we haven’t seen a revised executive order for this yet, based on President Trump’s recent statements so far, we are expecting that rate to be 15 per cent, instead of 10 per cent,” said Boscariol, head of international trade law at McCarthy Tetrault.
The head of public policy at the Canadian Chamber of Commerce said the shifting targets are harming global trade.
“Even though CUSMA carve-outs allow most Canadian products to continue tariff-free, the constantly moving goalposts will undermine global trade confidence,” said the chamber’s Matthew Holmes. “In the meantime, as the New York Federal Reserve Bank recently concluded, American consumers and businesses will continue to pay the vast majority of any new taxes placed on trade with the U.S.”
The tariff uncertainty is also evident south of the border, where FedEx is suing the U.S. government in the wake of Friday’s court ruling, and is requesting a full refund on what it paid in IEEPA tariffs last year.
FedEx said in a filing with the U.S. court of International Trade that they have “suffered injury” from having to pay the tariffs and that the relief they’re seeking from the court would redress those injuries.
Other companies have already launched efforts to recoup costs from the illegal tariffs, including large U.S. corporations like Costco and Revlon.
The U.S. National Retail Federation said in a statement on Friday that the ruling provided certainty for U.S. businesses and manufacturers.
“We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers,” it said. “The refunds will serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers.”
The U.S. Treasury Department had collected more than $133-billion (U.S.) as of December, from the import taxes Trump imposed under IEEPA.
With files from The Associated Press
