Trump To Raise Canada Tariff By 10% After Reagan Ad

President Donald Trump said he’s increasing US tariffs on Canada by 10% in response to an anti-tariff advertisement by the province of Ontario that is roiling one of the world’s biggest bilateral trade relationships. 

Trump’s Truth Social post follows days of public clashes over the ad, which invoked former President Ronald Reagan’s stance as a free trader and triggered the current US president’s ire, prompting him to suspend trade negotiations with Canada.

“Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10% over and above what they are paying now,” Trump said Saturday.

The US president didn’t specify the scope of his new measure. While Canada faces a US base tariff of 35%, the rate doesn’t apply to most Canadian goods because of an exemption for products and shipments made within the rules of the US-Mexico-Canada Agreement. That means millions of barrels of oil per day still flow from Canada to the US tariff-free, for example.

Steel and aluminum products don’t have that waiver — they’re subject to 50% US tariffs on foreign metals — and Canadian-made cars and trucks are only partially eligible for exemption from Trump’s 25% tariffs on most foreign autos. 

“Tariffs at any level remain a tax on America first, then North American competitiveness as a whole,” Candace Laing, head of the Canadian Chamber of Commerce in Ottawa, said in a statement. “We hope this threat of escalation can be resolved through diplomatic channels and further negotiation.”

Prime Minister Mark Carney has been engaged in talks with the US to lower the levies and Ontario Premier Doug Ford has pledged to pause the Ontario-funded ads in the US on Monday after speaking to Carney in hopes that the talks could resume.

After Trump first halted the negotiations, Carney said Ottawa was prepared to resume discussions “when the Americans are ready,” and said that the two sides had been making progress on steel, aluminum and energy. 

In contrast, White House economic adviser Kevin Hassett told Fox News on Friday that negotiations with Canada have “not been going well” and Trump is “very frustrated.”

The White House and the Canadian prime minister’s office didn’t provide comment Saturday on the tariff increase. A spokesperson for Ford said: “The premier’s statement from Friday stands.”

Trump said the ads appear to be timed to influence a US Supreme Court case challenging the legality of many of his global tariffs, threatening a pillar of his reelection campaign and subsequent economic agenda. The court is scheduled to hear oral arguments in the case on Nov. 5.

Trump has said the court would create a disaster if it overturns his country-based tariffs, including forcing the US government to refund companies billions of dollars in duties.

Television advertising is a longer-term strategy of the Ontario government in its battle against US tariffs — the Reagan ad isn’t its first such campaign. Prior to this blowup, a spokesperson for the Ontario premier said the government planned to run the Reagan spot for months on a variety of networks at an estimated cost of C$75 million ($53.6 million). 

Deep Links

The clash has reignited uncertainty between two partners that exchanged $900 billion in goods and services last year and have closely interwoven supply chains for major industries.

Ontario, with a population of 16 million just across the border, has been at the trade war’s center because of its steel and automotive industries — two sectors Trump has hit with his import taxes. About three-quarters of Canada’s goods exports went to the US last year. 

The US president said Thursday he’d end all talks with Canada because of the ad, which used excerpts from a 1987 Reagan speech defending free trade and slamming tariffs as an outdated notion that stifles innovation, drives up prices and hurts US workers. 

When Reagan delivered the radio address, he had just placed “select” tariffs on Japanese electronics for what he considered unfair trade practices. At the same time, he used the speech to urge Congress against passing a protectionist trade bill aimed at Japan.

The Reagan quotations were edited together from different parts of his speech, prompting the Ronald Reagan Presidential Foundation and Institute to complain that the ad misrepresented the full address. The foundation said it’s reviewing its legal options.

Trump made his latest announcement while en route to a three-country trip to Asia that includes stops at the Association of Southeast Asian Nations summit in Malaysia and the Asia-Pacific Economic Cooperation summit in South Korea.

Carney is on an extended trip to Asia, where he’ll also attend those summits and is working on boosting trade ties with other nations.

Asked if he had any plans to meet Carney during the two summits, the US president said as he began his trip that “I don’t have any intention of it, no.”