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Chicago Tribune
a minute ago
- Chicago Tribune
Crucial exemption allows majority of Canadian and Mexican goods to be shipped to US without tariffs
TORONTO — U.S. President Donald Trump raised the tariffs on Canadian goods to 35% last week, but a key exemption for Canada and Mexico shields the vast majority of goods from the punishing duties. Goods that comply with the 2020 United States-Mexico-Canada Agreement trade pact that Trump negotiated during his first term are excluded from the tariffs. Here's a look at Trump's tariffs on the two countries and their exemptions: Canada's central bank says 100% of energy exports and 95% of other exports are USMCA compliant. The Royal Bank estimated that almost 90% of Canadian exports appear to have accessed the U.S. market duty free in April. Canadian Prime Minister Mark Carney said the commitment of the United States to the core of USMCA, reaffirmed again last week, means the U.S. average tariff rate on Canadian goods remains one of its lowest, and over 85% of Canada-U.S. trade continues to be tariff free. 'Canada is better off than any of the trading partners right now because the Americans appear to be relying as a default on USMCA,' said Flavio Volpe, president of the Automotive Parts Manufacturers' Association. 'That gives them the tough tariff headline but also allows them the access to the stuff they need from us. Because of that we're in a relative better position.' Canadian and Mexican companies can claim preferential treatment under the USMCA based on where the products are made. 'The headline news is 35% tariffs but it's somewhat targeted,' said John Manley, Canada's former industry minister, finance minister, foreign affairs minister and deputy prime minister. Manley said Canada is doing okay despite the economic uncertainty. 'There is a lot of resilience I'd say. The Canadian economy has done relatively well, better than most of us expected, and remember that there is no tariffs on any of our energy exports,' he said. Trump said last week he would enter into a 90-day negotiating period with Mexico, also one of America's largest trading partners. The current 25% tariff rates are staying in place, down from the 30% he had threatened earlier. But that 25% only applies to the fraction of Mexico's trade with the U.S. that isn't covered by the USMCA. Shortly after speaking with Trump on Thursday, President Claudia Sheinbaum said that within the 'new commercial world order,' Mexico was still the best positioned nation because of the free trade agreement. 'What's within (USMCA) has no tariff, with the exception of what we already know: autos, steel and aluminum; and what is outside the treaty has 25%,' Sheinbaum said. But Economy Secretary Marcelo Ebrard pointed out that under the USMCA no tariffs were paid on more than 84% of Mexico's trade with the United States. Most imports from Canada and Mexico are still protected by the USMCA, but the deal is up for review next year. U.S. Commerce Secretary Howard Lutnick said last month: 'I think the president is absolutely going to renegotiate USMCA.' Preserving the free trade pact will be critical for Canada and Mexico. 'It would be an incredible disruption to lose it especially if you lost it to the levels of tariffs Trump is imposing, 30%, 25% or even 20%. You can absorb a single digit tariff level across the board but you can't adjust that kind of increase,' Manley said. More than 75% of Canada's exports go to the U.S. while more than 80% of Mexico's exports go there. Manley said that depending on how the trade war plays out the risk to the USMCA is very high. 'Uncertainty in business is the enemy of decision making,' he said. Carney said in a series of recent agreements with other countries that America is, in effect, charging for access to its economy. Manley said the investment thesis for Canada is pretty straightforward as Canada is rich in natural resources, has a skilled labor force, is open to immigration and has unfettered access to the U.S. market, the largest economy in the world. 'If that latter point is no longer the case, we've still got all the others, but we've got to really redevelop the investment thesis for attracting investment to Canada,' Manley said. Trump has some sector specific tariffs, known as 232 tariffs, that are having an impact. There is a 50% tariff on steel and aluminum imports and a 25% tariff on auto imports, though there is a carve-out for Canadian and Mexican made cars. 'Despite our advantages, certain major Canadian industries are being severely impacted by U.S. trade actions. These strategic sectors include autos, steel, aluminum, copper, pharmaceuticals, semiconductors, and of course, softwood lumber,' Carney said Tuesday. 'It is clear we cannot count or fully rely on what has been our most valued trading relationship for our prosperity.'
2 minutes ago
Crucial exemption allows majority of Canadian and Mexican goods to be shipped to US without tariffs
TORONTO -- U.S. President Donald Trump raised the tariffs on Canadian goods to 35% last week, but a key exemption for Canada and Mexico shields the vast majority of goods from the punishing duties. Goods that comply with the 2020 United States-Mexico-Canada Agreement trade pact that Trump negotiated during his first term are excluded from the tariffs. Here's a look at Trump's tariffs on the two countries and their exemptions: Canada's central bank says 100% of energy exports and 95% of other exports are USMCA compliant. The Royal Bank estimated that almost 90% of Canadian exports appear to have accessed the U.S. market duty free in April. Canadian Prime Minister Mark Carney said the commitment of the United States to the core of USMCA, reaffirmed again last week, means the U.S. average tariff rate on Canadian goods remains one of its lowest, and over 85% of Canada-U.S. trade continues to be tariff free. 'Canada is better off than any of the trading partners right now because the Americans appear to be relying as a default on USMCA,' said Flavio Volpe, president of the Automotive Parts Manufacturers' Association. 'That gives them the tough tariff headline but also allows them the access to the stuff they need from us. Because of that we're in a relative better position.' Canadian and Mexican companies can claim preferential treatment under the USMCA based on where the products are made. 'The headline news is 35% tariffs but it's somewhat targeted,' said John Manley, Canada's former industry minister, finance minister, foreign affairs minister and deputy prime minister. Manley said Canada is doing okay despite the economic uncertainty. 'There is a lot of resilience I'd say. The Canadian economy has done relatively well, better than most of us expected, and remember that there is no tariffs on any of our energy exports," he said. Trump said last week he would enter into a 90-day negotiating period with Mexico, also one of America's largest trading partners. The current 25% tariff rates are staying in place, down from the 30% he had threatened earlier. But that 25% only applies to the fraction of Mexico's trade with the U.S. that isn't covered by the USMCA. Shortly after speaking with Trump on Thursday, President Claudia Sheinbaum said that within the 'new commercial world order,' Mexico was still the best positioned nation because of the free trade agreement. 'What's within (USMCA) has no tariff, with the exception of what we already know: autos, steel and aluminum; and what is outside the treaty has 25%,' Sheinbaum said. But Economy Secretary Marcelo Ebrard pointed out that under the USMCA no tariffs were paid on more than 84% of Mexico's trade with the United States. Most imports from Canada and Mexico are still protected by the USMCA, but the deal is up for review next year. U.S. Commerce Secretary Howard Lutnick said last month: 'I think the president is absolutely going to renegotiate USMCA." Preserving the free trade pact will be critical for Canada and Mexico. 'It would be an incredible disruption to lose it especially if you lost it to the levels of tariffs Trump is imposing, 30%, 25% or even 20%. You can absorb a single digit tariff level across the board but you can't adjust that kind of increase,' Manley said. More than 75% of Canada's exports go to the U.S. while more than 80% of Mexico's exports go there. Manley said that depending on how the trade war plays out the risk to the USMCA is very high. 'Uncertainty in business is the enemy of decision making," he said. Carney said in a series of recent agreements with other countries that America is, in effect, charging for access to its economy. Manley said the investment thesis for Canada is pretty straightforward as Canada is rich in natural resources, has a skilled labor force, is open to immigration and has unfettered access to the U.S. market, the largest economy in the world. 'If that latter point is no longer the case, we've still got all the others, but we've got to really redevelop the investment thesis for attracting investment to Canada,' Manley said. Trump has some sector specific tariffs, known as 232 tariffs, that are having an impact. There is a 50% tariff on steel and aluminum imports and a 25% tariff on auto imports, though there is a carve-out for Canadian and Mexican made cars. 'Despite our advantages, certain major Canadian industries are being severely impacted by U.S. trade actions. These strategic sectors include autos, steel, aluminum, copper, pharmaceuticals, semiconductors, and of course, softwood lumber,' Carney said Tuesday. 'It is clear we cannot count or fully rely on what has been our most valued trading relationship for our prosperity.'
2 minutes ago
DOJ set to seek hate crime charges in killing of Israeli Embassy staffers: Sources
The Justice Department is set to seek hate crime charges and the death penalty against the alleged gunman who fatally shot two Israeli embassy staffers in Washington, D.C., two sources familiar with the matter confirmed to ABC News Wednesday. Prosecutors are poised to request that a grand jury indict Elias Rodriguez, as soon as this week, sources said. He has remained in custody since the fatal shooting of Yaron Lischinsky and Sarah Milgrim outside the Capitol Jewish Museum on May 21. CNN first reported news of the expected charges. Rodriguez was charged via criminal complaint with first-degree murder, murdering foreign officials and using a firearm to commit murder and a crime of violence, a day after the shooting. Interim D.C. U.S. Attorney Jeanine Pirro emphasized at the time that the charges were only initial in nature. "A young couple at the beginning of their life's journey, about to be engaged in another country, had their bodies removed in the cold of the night in a foreign city in a body bag. We are not going to tolerate that anymore," Pirro said during a press briefing on May 22. "Antisemitism will not be tolerated, especially in the nation's capital." Early last month, prosecutors in Rodriguez's case sought an extension for time to return an indictment against him, noting the complex and unusual nature of the charges he was facing. Rodriguez was seen in videos shouting "Free, Free Palestine!" inside the museum just minutes after he allegedly shot Lischinsky and Milgrim dozens of times, and later allegedly told police upon his arrest, "I did it for Palestine." But to secure an indictment on the new charge that Rodriguez's acts amounted to a hate crime, prosecutors would need to have evidence that his alleged actions were motivated by antisemitism and not just hatred toward Israel and the war in Gaza. Rodriguez has not yet entered a plea in his case. A public defender representing him did not immediately respond to ABC News' request for comment. The complaint alleges that Rodriguez shot the couple in the back and then fired again at Milgrim as she tried to crawl away. Lischinsky, 30, was a researcher in the political department of the Israeli Embassy, while Milgrim, 26, organized U.S. missions to Israel.
