President Trump has set new 25% tariffs on all Mexican and Canadian imports, including cars, trucks, and parts. This affects cars and trucks made in the United States using imported parts.
An additional, much smaller 10% tariff was added to the existing 10% tariff for China, giving that nation a total 19% in tariffs.
The tariff has been explained as an attempt to raise money for massive tax cuts. Previously it was seen as punishment for poor border security, which Canada and Mexico both agreed to upgrade to Trump’s satisfaction, albeit by finishing a previous deal with President Biden. The current excuse for Canadian tariffs is importing too much wood into the United States, which Trump blamed on unfairness and bad people, adding that the military used a lot of wood. Trump has said on numerous occasions that he wants to annex Canada, making the entire country into a single state.
The tariffs on Mexico are purportedly a punishment for illegal drugs and migrants entering the United States. The tariffs on China were not explained.
Canada and Mexico have been entering new free trade agreements with Europe and various countries in South America, Africa, and Asia. Donald Trump signed the existing trade deal with Mexico and Canada, which will be breached with these tariffs.
Economists have warned that high tariffs, especially arbitrary ones with major traders, can crash the economy; in the past economists often blamed the Great Depression on tariffs, though unregulated banking and regular boom-bust cycles played a major role.
Canada has been one of America’s staunchest allies in the past century. Maxwell Motors and Chalmers both set up plants in Ontario in the 1900s, which grew into the current Windsor complex (which is not quite as large as it was when they made engines, vans, and other vehicles). The Windsor plant has often excelled in quality and productivity. The Brampton factory was built by AMC in the 1990s.
Prime Minister Trudeau of Canada countered suggestions of further concessions by pointing out that they had already negotiated, and that the nation, which acquired its independents from the Crown many years ago, resented the idea of a takeover by the United States.
David Zatz started what was to become the world’s biggest, most comprehensive Mopar site in 1994 as he pursued a career in organizational research and change. After a chemo-induced break, during which he wrote car books covering Vipers, minivans, and Jeeps, he returned with Patrick Rall to create StellPower.com for daily news, and to set up MoTales for mo’ tales.
David Zatz has around 30 years of experience in covering Chrysler/Mopar news and history, and most recently wrote Century of Chrysler, a 100-year retrospective on the Chrysler marque.
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