This item is part of Watching Washington, a regular broadcast from CBC News correspondents reporting on U.S. politics and developments affecting Canadians.
what’s new
Donald Trump is now the central figure in plans to impose punitive trade tariffs. People who publicly share their opinions about them.
Howard Lutnick will now use his influence on issues that will have a major impact on the global economy.
Trump didn’t just nominate a Wall Street executive as secretary of commerce. It also appointed Mr. Lutnick head of customs and trade affairs, and also gave him oversight of the Office of the U.S. Trade Representative.
America’s trading partners will be keen to study Lutnick’s views on President Trump’s plan to impose a minimum 10% tariff on all imports into the United States.
Mr. Lutnick’s public statements on the issue may provide some relief. President Trump has said he has no intention of imposing tariffs on anything. However, his message is not always upbeat.
Few countries care about these details as much as Canada does. Depending on how the tariffs are designed, estimates of how much of a negative impact they will have on the Canadian economy vary widely.
The federal government is bracing for trade disruption under second-term President Donald Trump, and former Commerce Secretary Wilbur Ross says President Trump will not only focus on tariffs during his second term, but will also reduce Canadian supplies. He said the administration would also be targeted.
What is the context?
According to various estimates, President Trump’s tariff plans could harm Canada’s economy by: 0.5 percent of GDP to a devastating 5 percent.
The level of damage depends on the details. Trump offered few specifics during the campaign about exactly how his tariff plan would work.
Do tariffs apply to all countries? Every product from every country? Or only to certain products where the United States has a strategic goal of reshoring jobs?
Lutnick talked about how to apply them. In his view, they would serve two purposes. One is surgery to influence a specific industry. The other is as a negotiation club.
US tariffs are lower than others almost any countryincluding Canada. Lutnick said this threat will cause other countries to side with the United States and eliminate trade barriers.
“Of course this is a bargaining chip,” said Cantor Fitzgerald, CEO of financial services giant Cantor Fitzgerald. told CNBC During the campaign, he led Trump’s transition team.
“Everyone else is going to negotiate with us.”
In an interview over the summer, he said that President Trump’s plan is not actually to apply these tariffs indiscriminately, which would raise the cost of products that the United States is willing to import.
This seems less likely to hurt Canada’s biggest export to the United States: energy, particularly oil, gas and hydropower.
Chief Political Correspondent Rosemary Burton speaks exclusively with President Donald Trump’s former Secretary of Commerce Wilbur Ross about the U.S. president-elect’s agenda on trade and tariffs and his advice on how Canada should respond. spoke.
What’s unclear is how that will affect cars, Canada’s second-largest export. Lutnick discusses automobiles in detail. various interviewsbut Canada was not mentioned in his comments.
He specifically mentioned tariffs in Europe and Japan, saying the U.S. wants a more level playing field so Ford and GM can sell more cars in the country.
In a separate interview with CNBC, Lutnick called for the United States to impose tariffs similar to those faced in Europe and Japan. “Equality, equality, equality.”
He said if the U.S. threatened heavy import taxes, Europe would panic at the thought of Mercedes, Porsche and BMW losing sales in the U.S., and then work with Japan to negotiate a fairer deal.
“And finally Ford and General Motors will be able to sell in these locations,” Lutnick said.
he was later accused for misrepresenting basic facts about trade in an interview with CNBC. Mr. Lutnick greatly exaggerated the level of tariffs in Europe and Japan and their role in U.S. auto sales.
But Mr. Lutnick has recently taken a more hawkish tone.
in a long sentence podcast In a debate last month, Lutnick said tariffs were one of the secrets of America’s prosperity before World War II.
“We have to impose tariffs on the rest of the world. Shut them out at all costs. Bring manufacturing back here,” he said.
A trade expert in Washington told CBC News it’s unclear whether Mr. Lutnick has a technical understanding of these issues, and that he may rely on agents such as the U.S. Trade Representative’s office. He said President Trump’s announcement could ultimately increase Lutnick’s role here.
“Trump’s characterization in the statement is not literal and may be one of the things we should take seriously,” said Simon Lester, a former legal affairs official at the World Trade Organization.
what’s next
President Trump’s top nominees will face confirmation hearings in the U.S. Senate. Lutnick will likely hold a meeting early next year, where he could elaborate on the incoming administration’s plans.
The key player here is Trump. As Lutnick explained to CNBC, there is no public evidence that Trump views his plan primarily as a bargaining tool.
President Trump is using more punitive language when talking about tariffs. He has targeted companies building factories in Mexico and threatened to build factories in the United States, an ominous message for North American countries dependent on free trade agreements with the United States.
Trump’s aides are I don’t feel safeat one of his meetings with Canadian officials during the election period.
Now that the election is over and the new Trump team is taking shape, those same Canadian officials and businesses will want more clarity.
It remains to be seen who else Trump will nominate for economic roles. For example, key trade officials from the first administration, Robert Lighthizer and trade hawk Peter Navarro, have yet to have roles defined in the second administration.
Here’s a handy guide to what the United States would ask of Canada if negotiations were to take place. The United States publishes annual complaint list with business partners. The Canadian section is four pages long and covers taxes on dairy products, provincial liquor boards, broadcast access, and large online platforms.
President Trump is also expected to press Canada on military spending and interpretation of the auto clause in the existing North American trade agreement.
