How tariffs work and why they've always mattered to Canada: Don Pittis

Mexicans are doing everything they can to prevent new tariffs on exports to the U.S. over immigration, but there are growing worries of a backlash for the entire North American economy. (Mike Blake/Reuters)

Trump may be changing the rules by threatening Mexico with fees on immigration. And is that as the Republicans warned US President Donald Trump yesterday about their tariff threats to Mexico and the Federal Reserve worried about how to respond, it is necessary to point out that there are also new concerns that Canada will be caught in the current falling.

It should be noted that Canadian economic historians say it would not be a surprise, although they say that Trump could be introducing some new twists. Thus, the announcement by the President of the United States that he would impose tariffs on Mexico has led to warnings that the measure could end the new NAFTA agreement and contribute to a deep recession. In this way, it is understood that Canada would inevitably feel the effect.

It is necessary to indicate that originally, the term tariff only meant a list of charges, a use that still exists in some places, but more and more it is used indistinctly with the import duties imposed by the national governments on foreign products.

New tariff threat

As Trump reiterated in London yesterday, a five percent tariff on Mexican products would increase to 25 percent if the country did not curb the flow of illegal immigrants across its northern border.

In this way, the new Trump tariff threat has worried Canadian companies and politicians. He also opposes many Republican members of Congress who are in favor of free trade and powerful representatives of US industry who want the new NAFTA agreement ratified.

Also, it is important to mention that the commercial battle that caused the greatest damage in the history of Canada involved the 1930 Smoot-Hawley legislation that imposed tariffs on a wide variety of products manufactured by US companies and hit hard. to Canada.

For their part, economic historians say that, instead of fixing the US economy, the loss of global trade turned the recession after the stock market crash of 1929 in the Great Depression.

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Source: Don Pittis | CBC News