U.S. and Canada Exchange Tariff Threats Amid Trade Disputes

Why it matters locally: Potential tariffs on automobiles could impact the costs of vehicles and agricultural exports in Idaho, given the state's reliance on vehicle transport and its significant agricultural trade.

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WASHINGTON D.C. – President Donald Trump stated the United States may impose tariffs on automobiles imported from Canada. This comes after Bank of England Governor Mark Carney discussed potential Canadian responses to existing U.S. tariffs on steel and aluminum. President Trump's comments indicated a readiness to implement auto tariffs, citing what he described as unfair Canadian trade practices. This follows his administration's imposition of 25% tariffs on imported steel and 10% tariffs on imported aluminum from various countries, including Canada. Mark Carney, formerly the Governor of the Bank of Canada, indicated that Canada would likely retaliate against U.S. tariffs. He made these comments during a June 2018 interview, stating that Canada's response to the steel and aluminum tariffs would focus on areas within the U.S. that supported the tariffs. Canadian officials have previously stated that they would impose retaliatory tariffs on specific U.S. products, including whiskey, orange juice, and steel products. These measures would take effect on July 1, 2018, according to Canadian Foreign Minister Chrystia Freeland. The potential for auto tariffs raises concerns for manufacturers and workers in both countries. A 2018 study by the Center for Automotive Research suggested that a 25% tariff on imported vehicles and parts could reduce U.S. auto sales by two million units, result in 750,000 job losses, and increase the average vehicle price by $4,000. U.S. Senator Susan Collins (R-ME) characterized the tariffs on Canadian products as a "mistake," highlighting the close economic ties between Maine and Canada. Several U.S. business groups have also voiced opposition to the tariffs, warning of increased costs for consumers and businesses. The trade disagreements are occurring amid ongoing negotiations to revise the North American Free Trade Agreement (NAFTA).