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Trump's Commerce Nominee Foresees Tariff Tango with Canada Over Dairy Access

Canada 31.01.2025
Source: globalnews.ca
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Howard Lutnick, Trump's commerce secretary nominee, underscores the necessity of tariffs for 'fairness,' igniting a potential dairy dispute with Canada.
Trump's Commerce Nominee Foresees Tariff Tango with Canada Over Dairy Access

The nomination of Howard Lutnick as U.S. commerce secretary marks a defining moment in the Trump administration's trade policy, with his recent defense of tariffs as a tool for creating 'fairness' sparking potential tensions with Canada over dairy market access.

Lutnick, a billionaire financier, presented his case during a Senate confirmation hearing, emphasizing that the proposed 25% tariffs on Canadian and Mexican goods would not induce inflation, but rather compel enhanced border security to curb fentanyl trafficking. 'If we are your biggest trading partner, show us respect: shut your border and end fentanyl coming into this country,' he declared.

Though the northern U.S. border sees a small fraction of fentanyl as compared to Mexico, the seizures have surged by over 200% in two years, according to U.S. Customs and Border Patrol data. In response, Canada has amplified its border enforcement initiatives, deploying new technologies and equipment like Black Hawk helicopters.

Public Safety Minister David McGuinty, addressing Lutnick's statements, affirmed his faith in Canada's border fortifications while advocating for cooperative efforts to tackle the crisis.

The controversy extends to President Trump's focus on the trade deficit with Canada, influenced by inexpensive oil imports, and military spending imbalances. Despite Ottawa's recent efforts, Trump persists in emphasizing these economic disparities and has kept tariffs on the docket.

The introduction of universal tariffs, Lutnick argues, will rejuvenate the U.S. economy by re-establishing domestic manufacturing bases. Trump has instructed a review of the impacts of such tariffs, with findings expected by April 1.

The nominee's approach has drawn counterpoints, illustrated by the Bank of Canada's analysis warning of inflation due to increased consumer prices for imports resulting from U.S. tariffs. American economists also express concern about potential ramifications for the Federal Reserve's interest rate policies.

The Canada-U.S. trade dynamic further complicates matters, with Lutnick remarking on America's grievances regarding Canadian dairy market barriers, hinting that this issue could be revisited in upcoming CUSMA reviews.

Both nations previously reached new accords for increased U.S. access to Canada's dairy market, yet disputes endure over tariff-rate quotas seen as limitations on American imports. Canada defends the quotas, citing domestic producer protections under its supply management system.

Ultimately, Lutnick's focus on recalibrating North American manufacturing priorities includes a call for the return of automotive production to states like Michigan and Ohio, reinforcing his commitment to rekindle American industrial power.


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