The White House announced late Thursday that the US president, Donald Trump, has signed an executive order by increasing the Canada tariff from 25% to 35%, with the new tariff scheduled to enter into force on August 1, 2025.
Additional conclusions
- Trump signed an executive order by modifying reciprocal tariff rates for certain countries.
- The Trump administration will continue to use all the tools available to protect national security.
- Trump has determined that it is necessary and appropriate to modify reciprocal tariff rates for certain countries.
- The countries listed in Annex I of the Executive Order will be subject to the tariff specified therein.
- Countries not listed in Annex I will be subject to a 10%tariff.
Market reaction
At the time of writing, the USD/CAD is negotiating 0.01% lower in the day, quoting in 1,3855.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
