Trump raises tariffs on Canadian aluminum products to 35%, escalating tensions in US-Canada trade relations.

U.S. President Trump suddenly raised the import tariff on some Canadian aluminum products from 25% to 35%, escalating trade tensions between the U.S. and Canada. Although products under the United States-Mexico-Canada Agreement (USMCA) are not currently affected, the supply chain between the two countries faces potential disruptions, and Canada has not yet formally responded. This move is also accompanied by a new round of tariff impositions on several trade surplus countries.

US-Canada trade negotiations collapse, tariff spikes cause friction The White House announced on Thursday evening that it would raise tariffs on some aluminum products from Canada from 25% to 35%. This decision was made following the breakdown of high-level trade negotiations between the U.S. and Canada and is seen as a significant escalation in the relationship between the two countries. Back in March, the Trump administration had imposed a 25% tariff under emergency authorization, which Canada responded to at the time.

The United States accuses Canada of failing to effectively stop the flow of fentanyl The White House stated in a statement that Canada has failed to effectively prevent the illegal influx of fentanyl and its analogs into the United States, claiming that these drugs have caused significant harm to American society. The U.S. also criticized Canada for its strong reaction to previous tariffs and lack of willingness to cooperate. This reason has been used as a new basis for increasing tariffs, despite Canada being long viewed as an economic partner and ally of the United States.

Goods under USMCA are not affected for the time being, key Supply Chain is preserved Despite the tightening of new tariff policies, goods covered under the United States-Mexico-Canada Agreement (USMCA) remain exempt. This decision was made under strong lobbying from American automakers and large manufacturers, aimed at avoiding disruptions to the supply of key components and products.

Deep Supply Chain Threatened, Canadian Goods Facing Marginal Pressure The industrial systems between the US and Canada are highly integrated, with goods such as automobiles, parts, agricultural machinery, and electronic equipment often crossing borders multiple times before final assembly. If tariffs are fully implemented, it will introduce instability into the manufacturing chain. The Bank of Canada pointed out that, due to tariffs, the average effective tariff rate on Canadian goods entering the US will rise from about 5% to a higher level, depending on how the policy is implemented.

Trade data is vast, with aluminum, steel, and agricultural products as the focus In 2024, the total value of goods and services imported by the United States from Canada reached $475 billion, while exports to Canada were approximately $440 billion, covering fields such as automobiles, industrial equipment, and consumer goods. It is expected that this round of tariffs will focus on key export categories from Canada, including aluminum, steel, timber, and agricultural products, and exporters may need to lower prices or face reduced demand.

Canada has not officially responded yet and may take countermeasures As of now, the Canadian authorities have not made a public response regarding this matter. However, according to informed sources, the Canadian trade department is evaluating a series of counter-options, and the market is concerned that a new round of "tit for tat" is about to arrive.

The United States Implements New Tariffs on Multiple Countries, Trade Protectionism Escalates Again Apart from Canada, the Trump administration has imposed new tariffs on goods from multiple countries, setting a base tax rate of at least 15% for countries that have a trade surplus with the United States. Specifically, this includes: 25% for India, 20% for Taiwan, 39% for Switzerland, 30% for South Africa, and even if Thailand and Cambodia reach a temporary agreement, they will still have to pay a 19% tariff.

The global minimum tariff is set at 10%, and the market remains stable in the short term Currently, Trump maintains a unified tariff system with a global minimum of 10%, but does not rule out the possibility of further escalation. This measure comes as the deadline for trade negotiations set by Trump approaches, and the White House has yet to announce the effective date of the new tax rate. Nevertheless, early Asian markets reacted mildly to the news, with limited fluctuations in the exchange rates of the Canadian dollar and the South African rand.

Conclusion: The recent sudden imposition of tariffs by the US on Canada and multiple countries not only poses a challenge to traditional ally relationships but may also indirectly impact the stability of the global supply chain, including cryptocurrency mining and power equipment supply. Closely monitoring subsequent changes in USMCA and trade policies will become an important observation point for the cryptocurrency market, especially against the backdrop of North America's blockchain facilities and computing power clusters being highly reliant on a stable export environment.