Macro
Trump lifts 50% tariffs on some Canadian goods from October 30, but adds carpets, shampoo and freezers to the list
The order exempts plywood, packing boxes and seaweed days before the midterms, while trade lawyers say more products were added than removed.
HedgeWeekly News Desk ·
President Donald Trump signed an order on Friday removing 50% tariffs on a set of Canadian agricultural and forestry products, Reuters reported, citing the Wall Street Journal and the White House. The exemptions take effect on October 30, four days before the November 3 US midterm elections.
Products coming off the list include plywood sheets, some paper products, packing crates and boxes, certain machinery and refrigeration equipment, and fresh and dried seaweed. At the same time, the order puts a new batch of Canadian goods under the 50% rate, among them carpets, paints, shampoos, cocoa powder, air-conditioning machines, chest freezers, canoes and archery equipment. Senator Susan Collins of Maine said the relief would help the state's blueberry, potato, apple and seaweed growers.
Trade lawyers played down the change. Robert Glasgow of KPMG Law told BNN Bloomberg that more items were added than taken off, that the near-term effect on many of the goods is likely to be small, and that a wider US-Canada deal is unlikely within weeks; lawyer Barry Appleton described the move as a reshuffle rather than a cut. Prime Minister Mark Carney said Canada was ready to sign a deal and that the timing rested with Washington, while Trump said an agreement with Mexico was very close.
For investors, the order changes which companies pay the tariff more than how much is collected in total. The 50% rate was imposed on about $20 billion of Canadian imports in August after talks collapsed, and Canada answered in September with duties of 15% to 50% on about $20 billion of US goods, according to Reuters. Importers of the newly listed consumer and appliance categories face higher costs from the end of the month, while the dates to watch are October 30, the November 3 vote and any Mexico agreement, which would show whether Washington is moving toward broader settlements with its two largest neighbours.