Amid growing tensions in trade relations between the US and Canada, President Donald Trump recently decided to double (50%) the tariff on steel and aluminum imported from Canada. But, due to Canada's tough stance and trade pressure, this decision has been reversed.
Details of the incident
Tariff changes:
The Trump administration had earlier announced to double the 25% tariff on steel and aluminum imported from Canada to 50%. However, the US administration withdrew its decision after Ontario Premier Doug Ford temporarily suspended the plan to impose a 25% surcharge on electricity exports.
Uncertainty of trade war:
US senior economic adviser Peter Navarro said that the atmosphere of confusion and uncertainty created by the trade war due to the increased tariff forced the Trump administration to take a U-turn. If Canada had continued with its current tariff rate (25%), the US would not have been able to continue this fight for long.
Canada's tough stand:
The new Prime Minister of Canada reacted strongly to Trump's policies and said that he would not have to tolerate any unfair tariff policy to protect the Canadian economy and trade interests. This statement makes it clear that Canada has taken a clear stand against the threats of becoming the "51st state of America" regarding the tariffs imposed on its products.
Key points
Reason for U-turn:
Canada's tough stand and demand for transparency in trade policies forced Trump to reverse his announcement of increasing tariffs.
Impact on US market:
The ups and downs of this decision have created volatility in the US stock market, causing a wave of concern among investors.
Current situation of trade war:
This move can prove to be a turning point in the ongoing trade war between the US and Canada, which has intensified the effort to balance the economic relations between the two countries.
Conclusion
Amidst pressure from Canada and the changing global trade scenario, Donald Trump's decision to reverse the tariff hike is an important sign. This move not only points to a revision of trade policies within the US, but is also being considered a positive effort towards establishing a better economic balance between the two countries. According to sources (Unique Samay, ET Now) this decision will be helpful in reducing trade uncertainties and restoring investor confidence.
Source: Unique Samay