US President Donald Trump is complaining about Canada’s trade practices and threatening to impose a tax on international imports, rekindling fears that he may impose new tariffs.
Trump made the remarks Monday at the White House, where he unveiled a plan on infrastructure. During a long meeting with journalists, he lamented the behavior of countries considered as allies of the United States.
And he mentioned Canada directly.
“Canada does not treat us well in terms of agriculture and border traffic,” he said, according to the stories of the journalists who were present at the meeting.
“Other countries can not continue to enjoy us.”
We do not know exactly what he was referring to, but Mr. Trump has already complained in the past about the control of dairy products and the softwood lumber trade.
The Trump administration has also expressed anger over Canada’s complaint to the World Trade Organization (WTO) to challenge countervailing duties imposed by the United States.
The White House has meanwhile tried to minimize the threat of Donald Trump on Monday, and several US media reported that an announcement was not imminent.
The US president has promised to clarify his thoughts on the idea of a new tax, as early as this week.
“We are going to charge other countries outside our country – countries that benefit from the United States,” he said.
“Some of them are so-called allies, but they are not allies on the trade […] So we will make a tax on trade and you will hear about it during the week and in the coming months. ”
Hard to know for now what type of tax it refers. Earlier this year, the administration abandoned the idea of a border adjustment tax that was included in an old version of its tax reform. This measure was finally put aside because of the opposition of the elected representatives of the Congress.
Complex price situation
The president’s words are difficult to understand for a number of reasons.
First, it is Congress that sets the taxes, not the president. And elected representatives of the House of Representatives and the Senate, who have just adopted a major reform of the Trump administration, have shown little appetite for raising taxes.
Then tariffs are negotiated in the WTO.
Finally, this idea of the president was not even mentioned in the White House’s budget proposal for the year 2018, which was made public on Monday.
Several trade experts were also perplexed about the president’s threat.
Dan Ikenson, of the Cato Institute, believes that Trump’s only move could violate international trade laws – which would be linked to a retaliation in a 1974 US law.
“He could perhaps refer to section 301 [of the 1974 Commerce Act] and threaten to impose taxes to mitigate, compensate or cancel foreign practices that he considers unfair,” he said.
“It could be considered valid in the United States, but not in the WTO.”
The example of motorcycles
The most accurate index Donald Trump gave was motorcycles.
He complained that the United States imports products at no cost, while other countries charge more than 50% for the same items.
“Harley-Davidson. They are treated very unfairly by various countries. You know which country I am referring to, “he said.
In fact, these rates on motorcycles are the highest in Asia, and they do not exist in North America.