The current trade war scenario reflects a series of tactical maneuvers where parties initially advance but ultimately retreat. Following harsh statements that disrupt markets, there is often an abrupt reversal. This brings into question the rationale behind imposing additional tariffs if they were to be rescinded shortly thereafter.
Canada and the US
Today, Trump announced potential additional taxes of 50%. He stated that if Canada increases energy prices, they may impose even harsher measures. The interdependencies between Canada and the US create a complex dynamic, exacerbated by Trump’s insistence on using social media as a threatening tool. Previously, during his presidency, his tweets had already impacted the USD/TRY exchange rate.
Currently, the issue extends beyond Turkey, affecting the entire world. Trump seems intent on becoming a global challenge. He articulated the notion of a 50% additional tax and instructed his trade secretary accordingly. In response, the Governor of Ontario stated;
“We cannot accept this disruption in the free flow of goods with the US.
The additional electricity charge will be temporarily suspended. The US Trade Minister contacted us and extended an olive branch. Ottawa will respond in dollar terms if the US increases tariffs on steel and aluminum.”
Shortly after the Governor’s remarks, Trump asserted;
“The US had to do this (tariffs). We must bring back jobs and open factories.”
