Canada’s apparent tariff advantage is also born out in U.S. Customs and Border Protection numbers that track IEEPA tariff revenue by country. For Canada, the revenue collected so far is equal to just 1.6. per cent of total exports to the U.S., compared with 3.5 per cent for Mexico, although this doesn’t account for sectoral tariff revenues.

Commerce Secretary Howard Lutnick reminded us of an important but little-discussed part of trade negotiations with Canada and Mexico -- "virtually 75%" of trade between the U.S. and its two neighbors is "already tariff free" because of the USMCA agreement.

Whether President Donald Trump will renegotiate the country’s trade agreement with Mexico and Canada remains to be seen, but the threat is already affecting commerce on the border.

The United States’ decision to impose steep tariffs on imports from Canada and Mexico is likely to have a muted impact on cross-border trade, BofA says, thanks to exemptions preserved under the USMCA (United States-Mexico-Canada Agreement).

President Donald Trump "absolutely" plans to renegotiate the USMCA when the pact comes under review next year, Commerce Secretary Howard Lutnick said.

If implemented, Trump's new 35 percent duties will be "separate from all Sectoral Tariffs," such as the 50 percent tariff on steel and aluminum imports. Trump also promised that, if Canada raises its own tariffs in response, then "whatever number [Canada chooses] to raise them by, will be added onto the 35% that [the U.S. charges]."

Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.

The combined U.S. trade deficit with USMCA trade partners Mexico and Canada now exceeds the U.S. deficit with China, according to my analysis of U.S. Census Bureau data through May released Thursday.

WASHINGTON — President Trump unexpectedly announced Friday that he was “terminating” trade talks with Canada due to a looming digital services tax targeting large American companies. “We ...