2020 deal shields Canada and Mexico from full tariff impact

North American trade is at a turning point. Last week, President Trump imposed a 35 percent

tariff on some Canadian goods. At the same time, talks with Mexico kicked off for a possible new

deal while existing tariffs stay in place. But a 2020 trade agreement Trump helped negotiate

gives both countries a pass on many tariffs. The root of this lies in the USMCA, the trade

agreement designed to level the playing field for American workers by setting rules on how

products like cars and agricultural goods are made. Under this deal, Canadian and Mexican goods

can skip tariffs if they meet tough requirements. That includes cars, farm goods, and other products

that must contain enough North American-made content. But if products don't follow the rules

tariffs apply. Canada's Prime Minister Mark Carney called the tariff increase a change in dynamics

between the two countries. So while we'll continue to work with the United States

on the many mutually beneficial opportunities that we share in trade and investment it is clear that we cannot count or fully rely on what has been our most valued trading relationship for our prosperity And that why we increasingly focused on building

our strength at home and finding new opportunities for Canadian companies and workers abroad

When introducing the tariffs July 31st, Trump's executive order cited concerns over illicit drugs

crossing the northern border, linking the tariff increase to national security and law

enforcement efforts. The order also warns that Canadian retaliation could lead to higher tariffs

Meanwhile, the U.S. and Mexico have started a 90-day period of negotiations to work toward a

longer-term agreement. For now, a 25 percent tariff on Mexican goods remains, with higher duties on

metals like copper and steel. Recent data shows the U.S. trade deficit with Mexico has more than

doubled since 2016, raising questions about the effectiveness of existing trade policies

For Straight Hour News, I'm Kaylee Carey. For more on this story, head to san.com or download the Straight Hour News mobile app today