Donald Trump announced he was increasing tariffs on Canada as he reacted angrily to an anti-tariffs advertisement featuring former US President Ronald Reagan.
Mr Trump announced the higher tariffs in a Truth Social post on Saturday referencing the advert, which features a video of former President Reagan saying that tariffs cause trade wars and economic disaster.
The advertisement aired during the World Series broadcast, drawing the ire of the US President who accused Canadian authorities of perpetrating a “fraud” on the American public.
President Trump confirmed he was increasing tariffs on Canada by an additional 10 per cent “above what they’re paying now”, escalating trade tensions between the neighbouring nations.
Ontario Premier Doug Ford said on Friday that after discussions with Canadian Prime Minister Mark Carney, Ontario would pause the campaign on Monday so that trade talks could resume.
Reagan Ad During Baseball Championship
The controversial advertisement aired on Friday during the broadcast for the first game of Major League Baseball’s World Series, in which the Toronto Blue Jays were facing off against the Los Angeles Dodgers.
The advert by the Ontario government has a voiceover of Reagan criticising tariffs on foreign goods whilst saying they cause job losses and trade wars, directly contradicting President Trump’s protectionist trade policies.
The video uses five complete sentences from a five-minute weekly address given by Reagan, spliced together out of sequence to create the anti-tariff message.
The advert does not mention that Reagan was using the address to explain that tariffs imposed on Japan by his administration should be seen as a sadly unavoidable exception to his basic belief in free trade as the key to prosperity.
Trump’s Furious Response
President Trump posted on social media: “Their Advertisement was to be taken down, IMMEDIATELY, but they let it run last night during the World Series, knowing that it was a FRAUD.”
“Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10 per cent over and above what they are paying now.”
President Trump posted the message whilst he was aboard Air Force One on his way to Malaysia, the first stop on a trip through East Asia that will largely focus on trade issues.
It was not clear what goods would be affected by Trump’s newly announced tariffs or when they would take effect.
USMCA Exemptions
The majority of Canadian exports to the US are exempt from tariffs because of the United States-Mexico-Canada Agreement that was signed during Trump’s first term as president.
The USMCA replaced the North American Free Trade Agreement and governs most trade between the three countries, providing tariff-free access for the vast majority of goods.
The Trump administration in August imposed a 35 per cent tariff on Canadian goods not covered by the USMCA, affecting sectors outside the main trade agreement.
Canada’s economy has suffered from sector tariffs of 50 per cent imposed this year by Trump on steel and aluminium from all countries, hitting major Canadian industries hard.
Canada Ready to Resume Talks
Prime Minister Carney said Canada stood ready to resume trade talks with the United States despite the escalating rhetoric from Washington.
Mr Trump and Mr Carney will both be at the Association of Southeast Asian Nations summit in Malaysia, but the US President told reporters on Air Force One he has no plans to meet with the Canadian leader.
The snub suggests deepening tensions between the two nations, which share the world’s longest international border and have historically enjoyed close economic ties.
The Canadian prime minister had removed most of Canada’s retaliatory tariffs on US imports that were imposed by his predecessor in response to earlier American trade actions.
However, White House adviser Kevin Hassett said on Friday that Trump was frustrated with Canada and trade talks have not been going well, indicating little progress towards resolving the disputes.
Economic Impact
The escalating tariff war threatens to disrupt billions of pounds worth of trade between the United States and Canada, two of the world’s largest trading partners.
Canadian businesses have warned that further tariffs could force them to raise prices for consumers or cut jobs to remain competitive in the American market.
The steel and aluminium tariffs have already caused significant disruption to Canadian manufacturing, with some companies relocating operations or scaling back investment plans.
American consumers may also face higher prices for Canadian goods including timber, energy products and agricultural commodities that cross the border daily.
The dispute comes at a sensitive time for both economies, with inflation concerns and supply chain disruptions already creating economic headwinds.
Political Fallout
The Reagan advertisement has become a flashpoint in the broader debate about trade policy, with critics of Trump’s tariffs seizing on the former Republican president’s words to attack current protectionist measures.
Reagan is revered by many conservatives as a champion of free trade and limited government intervention in the economy, making his words particularly potent in political debates.
The Ontario government’s decision to use Reagan’s image and words represents an unusual intervention by a foreign jurisdiction in American political discourse.
Premier Ford’s agreement to pause the campaign suggests diplomatic efforts to de-escalate the situation, though Trump’s tariff announcement indicates those efforts have so far been unsuccessful.
Trade experts have warned that a full-scale tariff war between the United States and Canada would harm both economies and potentially violate international trade rules.
The World Trade Organisation could be called upon to adjudicate disputes if the situation escalates further, though such proceedings typically take years to resolve.
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