U.S. Supreme Court decision on Trump's tariffs could bring more trade uncertainty to Canada
CBC
Canada is yet again on the precipice of economic uncertainty as a result of U.S. President Donald Trump’s global trade war. This time it's connected to an upcoming decision by the U.S. Supreme Court.
Consider it the tariff version of the devil you know versus the devil you don’t.
The justices are considering whether some of Trump’s tariffs are legal, and whether he overstepped his authority by invoking emergency powers to impose them. If the court rules against the Trump administration, those tariffs could end up being struck down.
The White House appears prepared for that possibility, with several senior officials indicating a backup plan is ready to go, should they lose the case.
And this is where things become particularly complicated for Canada.
While the removal of any tariffs would be a welcome development, the tariffs in question are the ones that have huge exemptions for Canadian goods. And if those tariffs are lifted, and then replaced by different tariffs, there are no guarantees the exemptions will continue.
"What Canadians need to know is that [Trump] has alternatives under U.S. law to impose tariffs at will," said Eric Miller, a trade consultant who leads the Rideau Potomac Strategy Group.
He says Canada is facing a new "challenge" since Trump will be the one to make any final decisions about granting exemptions.
The Supreme Court is only examining some of Trump’s tariffs: specifically, the ones imposed using the International Emergency Economic Powers Act (IEEPA). It essentially gives the president broad economic powers to address an emergency situation.
Canada and Mexico were both hit by IEEPA tariffs early in Trump’s second term. The president declared security along both the northern and southern borders to be an emergency, citing illegal migration and the flow of fentanyl into the U.S.
Starting March 4, a 25 per cent tariff was applied to all Canadian and Mexican goods. A lower 10 per cent tariff on energy products was also put into place.
But days later, Trump announced there would be significant exemptions. All goods that comply with the Canada-U.S.-Mexico free trade agreement, known as CUSMA, could still flow across the border tariff-free.
"Canada has seen their ability to continue to export duty-free to the United States largely maintained," said Miller, noting the exemptions have provided stability for a broad range of businesses.
And the exemptions continued when Trump raised the tariff rate against Canada to 35 per cent in August.
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