The U.S. has announced a new 35% tariff on Canada effective August 1, citing retaliatory tariffs from Canada as justification. President Trump emphasized these tariffs via social media, calling attention to the ongoing trade tensions. Market reactions suggest investors are interpreting these tariffs as negotiating tactics rather than serious policy changes. This perspective is influenced by a history of the Trump administration's reluctance to enforce tariffs strictly. Ongoing talks between U.S. and Canada aim to finalize a new trade agreement by July 21, amidst speculation that tariffs may be extended to allow for further negotiations.
The White House announced another set of tariffs on Canada, with a new 35% tariff rate on products not already subjected to sectoral tariffs.
Tariffs are Trump's hammer for every nail that he thinks needs fixing, indicating a reliance on tariffs for negotiating leverage.
Markets are brushing off the latest tariff back-and-forths, assuming the U.S. will hold off on collecting them and extending negotiations.
The most recent tariff rate is viewed as a negotiation tactic meant to earn a leg up, not a steadfast policy commitment.
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