March 5, 2025
Key Tarrif Takeaways:
Tariffs are taxes that a government places on goods and services imported from other countries.
The importing company or entity is responsible for paying the tariff to the government, and the increased cost may be passed on to consumers in the form of higher prices.
The introduction of new tariffs on Canadian imports by the U.S. government could have a negative impact on both economies.
Tariffs introduce a layer of uncertainty as they can affect spending, trade flows, government revenue, exchange rates, employment, economic growth and inflation.
If you haven't thought about tariffs since learning about them in secondary school, recent world news might have you scrambling to recall exactly what you learned all those years ago. Tariffs have been around for hundreds of years, and Canada has weathered trade wars with the United States before, dating as far back as the late 19th century.
The recent increased focus on tariffs was initiated when U.S. President Donald Trump signed an executive order on February 1 which would place a 25% tariff on goods from Canada and Mexico, with a special carve out for a lesser 10% import tax on Canadian energy, as well as a 10% tariff on imports from China. The White House later announced an additional 25% tariff on Canadian steel and aluminum, which would result in a 50% total tariff on the metals. Canada, in turn, announced retaliatory tariffs of 25% on $155 billion (or $US 106 billion) of U.S. imports.
But just a few days later on February 3, President Trump and Prime Minister Justin Trudeau agreed to a 30-day pause on their respective tariffs, before any of these new tariffs came into effect.
That 30-day pause period was over on March 4. The U.S. has reactivated its tarrifs focused on Mexico and Canada. Canada and Mexico are set to retaliate with tarrifs of their own against the U.S.. Today (March 6, 2025) the U.S. suspended many of its tarrifs for a second time against Mexico and Canada until early April 2025!? What is going to happen next?
Managing your personal finances can be overwhelming enough without factoring in international trade policy, but it is all connected. That is why it is important to understand the basic ins and outs of tariffs — and the impact they could have on you.
Please follow the link for more details: BBC Website https://www.bbc.co.uk/news/articles/cn48q3150dxo
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