[Text/Observer Network by Shao Yun]

Local time on April 2, the long-anticipated extensive "reciprocal tariff" announced by U.S. President Trump finally came into effect, and its two neighboring countries and major trading partners, Canada and Mexico, unexpectedly "escaped." However, according to business figures in Ottawa, Canada's exemption from new tariffs this time is just "dodging a bullet but running into a tank" – as of 3 a.m., Trump's new auto tariffs have already taken effect.

On the afternoon of the 2nd local time, Trump signed two executive orders at the White House regarding the so-called "reciprocal tariff," announcing that a 10% "minimum benchmark tariff" would be set for all global trading partners, and higher "reciprocal tariffs" would be imposed on countries and regions with the largest trade deficits with the United States. However, the list of targets for Trump's announced tariff measures did not include Canada and Mexico.

Reuters reported on the 2nd that this has led some analysts to believe that Canada and Mexico seem to have avoided the worst-case scenario. "After today's announcement of the tariff, Mexico and Canada will almost certainly breathe a sigh of relief," said Michael Camunez, CEO of strategic consulting firm Monarch Global Strategies. "North American partners have avoided what could have been a very bad day."

However, Canadian Prime Minister Kenny stated on the afternoon of the 2nd that the 25% tariff on US imports of automobiles and steel and aluminum products will cause economic difficulties for Canada. According to reports by The Globe and Mail on the 2nd, Kenny warned before hosting the cabinet meeting that the Trump administration is also expected to target Canada's lumber, pharmaceuticals, and semiconductors with tariffs, "These measures will directly affect millions of Canadians."

Kenny said that Canada will "take countermeasures against these measures." "Unity is important in a crisis. Taking decisive action is crucial, and this is what we are doing." It was reported that he plans to hold a meeting with leaders of various provinces and territories in Canada on how to respond to US tariffs on the 3rd.

According to The Guardian, Flavio Volpe, president of the Canadian Automotive Parts Manufacturers' Association (APMA), bluntly stated on the 2nd that Canada's exemption from the "reciprocal tariff" this time is like "dodging a bullet into the path of a tank."

"Auto tariffs will shut down the auto industry in the United States and Canada," Volpe wrote on the social platform X (formerly Twitter). "Don't get distracted. A 25% tariff is four times the 6% to 7% profit margin for all companies. This is math, not art."

Screenshot of Volpe's post on X

Candace Laing, president of the Canadian Chamber of Commerce, stated on the 2nd that the harshness of Trump's tariffs that the world is now realizing is the reality that Canada has been experiencing for months. She pointed out that tariffs increase uncertainty for global businesses, "The chain reaction of tariffs and counter-tariffs will have real and heavy economic impacts on the United States, Canada, and the global economy."

Starting March 12, the US imposed a 25% tariff on all imported steel and aluminum products, hitting Canada and Mexico first. Data shows that, measured by weight, steel from Canada accounts for nearly a quarter of US company imports, while Mexico accounts for about 12%. Canada is also the largest source of aluminum imports for the United States. In response, Canada's mission to the World Trade Organization has filed a complaint with the WTO.

In addition, the previously announced 25% general tariff on all Canadian and Mexican imports took effect on March 4. Exemptions for goods under the USMCA (United States-Mexico-Canada Agreement) were valid until April 2. According to a document released by the White House website on April 2, the US will continue to exempt goods eligible for USMCA preferences, and impose a 10% tariff on energy and potash products not eligible for the preferences.

Starting at midnight on April 3, the 25% tariff on imported passenger vehicles (sedans, sport utility vehicles, etc.) and light trucks has taken effect, while tariffs related to certain auto parts will be levied one month later. This will also impact Canada and Mexico, both of which are major suppliers of auto parts to the US.

"This is immense pain for Canada. You will see a massive restructuring and adjustment in North America's automotive industry," said Eric Miller, head of Canada at the consulting firm Rideau Potomac.

Canadian Broadcasting Corporation (CBC) analysis on the 2nd indicated that facing Trump and his tariff stick, the only certainty for Canadian businesses now is the uncertainty itself. Ravi Kahlon, an official in charge of tariff response in British Columbia, said: "Our challenge is that the situation is changing every moment, and anything can happen."

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/74890802223941120/

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