WASHINGTON(Thechieftainspear) – President Donald Trump has once again put pressure on Canadian trade policies, warning that new tariffs could take effect as soon as Friday on Canadian lumber and dairy products. This comes just a day after he temporarily halted a broad 25% tariff on Canadian imports, adding another layer of unpredictability to his ever-shifting trade strategy.
Speaking from the Oval Office, Trump accused Canada of unfair trade practices, particularly in the dairy and lumber industries. “They’ve been taking advantage of us for years,” he said, pointing to Canada’s steep tariffs on U.S. dairy exports, which can reach nearly 250%. He vowed to match those tariffs, saying, “It’s not fair to our farmers, and we’re going to make sure they pay the same price.”
Canadian officials pushed back against Trump’s remarks. Trade Minister Mary Ng dismissed his claims as “inaccurate” and called the potential tariffs “unjustified.” Addressing reporters, she said, “This type of action undermines the trade relationship we have built, and we will respond accordingly.”
Tariff Uncertainty Shakes Markets
The prospect of new tariffs sent ripples through financial markets. Stocks dipped early in the day following a mixed jobs report but later rebounded after Federal Reserve Chair Jerome Powell delivered a more optimistic economic outlook. The Dow closed up 222 points (0.5%), the S&P 500 gained 0.6%, and the Nasdaq rose 0.7% after hitting correction territory the day before.
Despite the rebound, uncertainty surrounding trade policies has weighed heavily on the markets since Trump’s return to office. “Investors are struggling to make sense of this constantly shifting strategy,” said Michael Block, a market strategist at Third Seven Capital. “If this is a strategic game, it’s not one the markets are responding well to.”
Economic concerns are mounting as businesses and consumers adjust to policy unpredictability. Rising inflation, slowing hiring, and declining consumer confidence have already put pressure on the economy. Further tariffs, especially on key imports, could worsen these trends.
Dairy Dispute Escalates
The long-standing U.S.-Canada dairy dispute centers on Canada’s supply management system, which imposes high tariffs on certain dairy imports to protect its domestic industry. Although U.S. dairy exports rarely hit the quota that triggers these tariffs, American farmers have long criticized Canada’s restrictions.
Becky Rasdall Vargas, senior vice president of trade and workforce policy at the International Dairy Foods Association, acknowledged Trump’s efforts but warned against escalating the conflict. “A prolonged tariff war will only add uncertainty and higher costs for dairy farmers, processors, and rural communities,” she said.
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Despite Trump’s complaints, the USMCA trade agreement, which he signed, did not secure lower dairy tariffs for American exporters. A 2023 trade panel even ruled in Canada’s favor, upholding its existing import restrictions. The decision frustrated U.S. lawmakers, including Wisconsin Senator Tammy Baldwin, who called it a setback for dairy farmers in her state.
Lumber Tariffs Could Drive Up Home Prices
Trump has also targeted Canadian lumber, arguing that the U.S. can meet its own timber needs without relying on imports. He signed an executive order emphasizing that America has “ample timber resources” and suggested that increasing domestic production could replace Canadian imports.
However, industry experts strongly disagree, warning that tariffs on Canadian lumber could lead to higher homebuilding costs and exacerbate the housing affordability crisis. Currently, about 30% of the softwood lumber used in the U.S. comes from Canada, and existing duties on these imports already stand at 14.5%.
Although Trump insists that America can be self-sufficient in timber production, economists argue that domestic supply chains lack the capacity to meet demand. “Higher tariffs on Canadian lumber could make housing even more expensive for American families,” cautioned a spokesperson for the homebuilding industry.
More Trade Changes on the Horizon
Despite the immediate concerns, Trump signaled that more trade policy changes could be coming. “There will always be adjustments,” he said. “Sometimes you go around the wall instead of through it.”
With economic uncertainty already weighing on businesses and consumers, new trade disputes could further complicate the outlook. Whether Trump’s aggressive tariff approach will lead to better trade deals—or simply disrupt key industries—remains to be seen.
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