According to Refinitiv, US President Trump announced on Wednesday (April 2) the imposition of global equivalent tariffs on major trading partners, but Mexico and Canada were not included in the new tariff list. Nevertheless, the tariffs previously faced by both countries due to immigration and fentanyl issues remain in effect. The following is a detailed summary of this policy adjustment.

1、 New tariff exemption scope

Goods from Mexico and Canada, as long as they comply with the US Mexico Canada Agreement (USMCA), will continue to enjoy tariff free treatment, except for automobiles and steel and aluminum products. This exemption means that both countries have temporarily avoided higher tariff burdens in most areas of trade.

The Trump administration had previously imposed a 25% tariff on both countries, citing their poor performance in curbing illegal immigration and fentanyl trafficking. However, with the advancement of USMCA, goods that comply with the agreement ultimately obtained tariff exemptions.

2、 Fentanyl tariffs still in effect

Although the new tariff policy is lenient towards Canada and Mexico, the original taxes related to fentanyl and immigration issues have not been cancelled. The White House made it clear in its statement that "existing fentanyl/immigration related orders remain in effect for Canada and Mexico, but are not affected by this order

In addition, the White House also added that if the relevant regulations are terminated in the future, goods that comply with the USMCA can still enjoy preferential treatment, while goods that do not comply with the agreement will be subject to a 12% equivalent tariff.

3、 The reactions of Canada and Mexico

The governments and business communities of Canada and Mexico are generally pleased with this policy adjustment.

1. Mexico's sigh of relief

Michael Camunez, CEO of Monarch Global Strategies, said, "Mexico and Canada will almost certainly breathe a sigh of relief after today's tariff measures are announced." His company primarily provides consulting services to businesses operating in Mexico.

2. Canada's cautious optimism

Candace Laing, President and CEO of the Canadian Chamber of Commerce, issued a statement saying, "We hope that the United States' positioning of Canada today is part of the substantive negotiation path, ultimately establishing a long-term partnership

However, Canadian Prime Minister Mark Carney remained tough after Trump announced the policy, stating that countermeasures would be taken: "We will counter these tariffs with countermeasures, we will protect our workers, and we will build the strongest economy in the G7. "

summarize

Trump's tariff policy adjustment has temporarily avoided broader trade shocks for Canada and Mexico, but the two countries still need to face tariffs imposed on fentanyl and immigration issues previously. Although the business community welcomes exemptions, the Canadian government still plans to take countermeasures, indicating that trade tensions have not fully eased. In the future, the trade relations between the United States, Canada, and Mexico may still fluctuate with policy changes.

Due to Canada not being included in the latest global equivalent tariff list, market concerns about the Canada US trade relationship have eased, which may boost investors' confidence in the Canadian dollar. On Wednesday, the US dollar weakened against the Canadian dollar, closing down 0.5% at 1.4231, the lowest closing price since February 24th.