Confused by Trump's many tariff threats? Here's what's going on
Key dates to watch: March 4, March 12, then an April shower of developments
Being confused by U.S. President Donald Trump's tariff plans isn't a flaw — it's proof you're paying attention in the funhouse maze of Trump trade threats.
One minute, he's imposing massive tariffs on Canada and Mexico, then they're delayed, then they're proceeding March 4, then they're not, then they are again, but it turns out he's really talking about more targeted tariffs later. And so on.
A reason it's so confusing is Trump has made a multitude of tariff threats, like an endless geyser of economic menace.
He tends to slosh these threats together, conflating them when asked about one; then it's left to his aides to clear things up, which is what his White House did Tuesday and his commerce secretary did Wednesday.
So what does all this mean for Canada? Here are three key takeaways.
First, there's no indication whether a massive economy-wide tariff of 25 per cent is coming on March 4, or ever.
Second, different threats could whack Canada over the coming weeks, involving steel, aluminum, and possibly other products.
Third, this confusion may be intentional, in the run-up to the renegotiation of the Canada-U.S.-Mexico agreement. Creating uncertainty in international trade is a longstanding Trump policy, and it's now happening on steroids.
There are early signs that scared companies are reacting exactly the way Trump would like: by shifting production to the U.S.
"Create chaos," is how Gary Hufbauer, a decades-long veteran trade-watcher in Washington, describes Trump's strategy.
"That's not a bug [of Trump's trade policy], as they say. That's a feature of Trump. And we'll continue to see that over the next several years."
In a faint-hope bid to shine light into that chaos, here is what we know – and what we don't – about what Trump has planned on trade.
March 4: The big threat
For Canada, here's the big one, Trump's broadest threat: a 25 per cent tariff on virtually everything, with a smaller tariff on oil.
If this tariff actually went ahead, Hufbauer estimates it would quickly shave three per cent off the Canadian economy, triggering a severe recession: "Very painful," he said.
But Trump has repeatedly paused it.
It all started last year when Trump complained about fentanyl and migrants spilling across the border; he said tariffs were coming Jan. 20, then it was Feb. 1, then it was Feb. 4, and now it's been paused to March 4.
Commerce Secretary Howard Lutnick has hailed Canada's progress in public and in private conversation, citing multiple actions taken about the border.
So will his boss plow ahead with tariffs next week? Predictions differ.
Longtime D.C. trade-watcher William Reinsch foresees another delay, then maybe another, as Trump maintains the threat as leverage.
"I think we're going to see rolling postponements," said Reinsch, a former U.S. commerce official, and trade expert at the Center for Strategic and International Studies. "Let it get right to the brink. Like he did the last time. Then do a reprieve."
Others, however, foresee some sort of action next week.
Hufbauer predicts Trump will enact something on March 4 – albeit smaller than threatened: "Not at the 25 per cent rate. But at a lower rate."
Canada-U.S. trade expert Dan Ujczo sees a wide gamut of possibilities, and expects Trump will land somewhere between the two extremes – neither dropping tariffs entirely, nor imposing them without an end date.
"In the middle there are a range of options," said Ujczo, a senior counsel at the Ohio law firm Thompson Hine, describing possibilities as: another delay; a small tariff that grows; or, a big tariff with an expiry date.
March 12: Metals tariffs
Trump is promising 25 per cent tariffs on all steel and aluminum imports. This could be a major problem for Canada.
"Canada will be the primary victim," Reinsch said. Hufbauer concurs that these are probably coming, and Canada will probably get hit.
He said these aren't a ploy like some of Trump's other threats. He said Trump is dead-set on steering the manufacturing of certain products back to the U.S. – including steel and aluminum.
"Unfortunately," Hufbauer added, predicting that these tariffs will do unnecessary damage to the U.S. economy.
But there's a caveat.
It's not entirely clear how far U.S. customs will go in interpreting and enforcing the rule, Ujczo said. Will it hit car parts? What about construction materials, which overwhelmingly use imported aluminum?
Ujczo said this is the one that keeps him up at night. He said he's hearing progress in the economy-wide tariffs — not on this. "The question is: What will the scope be?"
Perhaps, he said, Trump could delay implementation. Which would push this problem into what will be a very busy spring.
April showers
You'd practically need a full-time cartographer to map out all the trade actions Trump is threatening after April 1.
This is when the real meat of Trump's trade policy hits the table.
On his first day in office, Trump demanded reports from his cabinet officials by April 1, studying U.S. trade deficits, other countries' unfair practices that deserve retaliation, and the potential revenues the U.S. could raise through tariffs. The penalties would come later, perhaps even months later.
Trump is looking at different types of tariffs – from a global minimum tariff on every international import, to more targeted retaliation (what he's calling reciprocal tariffs).
Canada is among the countries he mentions in a separate executive order on reciprocal tariffs, complaining about Canada's digital-services tax.
Lutnick is even complaining about the design of Canada's GST, suggesting in a Fox News interview that it could be a pretext for additional tariffs.
But that's not all.
"Wait, there's more," Democrat Ron Wyden said mockingly, as he read out a list of Trump tariff threats in a speech in the Senate.
Trump is threatening 25 per cent tariffs on auto, semiconductor, and pharmaceutical imports as early as April 2, and possibly lumber, too.
Some of this would obviously be brutal for Canada.
But here we approach Trump's endgame. By this point, Ujczo expects, Trump will want to launch the renegotiation of the Canada-U.S.-Mexico agreement, which by law must start next year, but Ujczo expects it will start this spring.
Trump will wield tariff threats as leverage.
We already have a general sense of Trump's wish-list: More access to Canada's dairy market, changes to certain digital policies, and tightened trade in autos — though it's still unclear if his main target is Chinese car parts or all countries.
And if he doesn't get what he wants, he'll threaten Canada and Mexico — with tariffs, and with a U.S. withdrawal from the continental trade agreement
"That sword of Damocles is always dangling over their head," Ujczo said. "I don't think the Trump administration is going to be very patient. Canada's time-honoured strategy of running out the clock may not work this time around."
So there it is. Possibly big tariffs next week, and possibly not; probably smaller tariffs later; and a very stormy spring, as Canada may or may not be in the midst of an election.
All clear now?
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