Standing up for influence: 5 things to watch for on Trump’s upcoming tariffs

Countries around the world are bracing for an economic crisis on Monday. And few are more at risk than Canada.

Because three-quarters of Canada’s exports to the world go to the US, and US President-elect Donald Trump is threatening trade sanctions. On the day he started his work.

We know that he is planning 100 executive orders From the inauguration date, and they are sure to include trade and border measures.

What we don’t know is the scale, weight and structure of the business he promised. Even Trump’s Republican allies on Capitol Hill aren’t convinced, and public opinion suggests the full plan won’t be finalized Monday.

“In short. What I’m hearing is: ‘We don’t know what he’s going to do,’ ” Kirsten Hillman, Canada’s ambassador to the US, told CBC News, describing her discussions with Republican lawmakers and state governors.

“I want to say we know what’s going to happen. I guess we won’t know until Monday,” she said.

Here are five things to look out for.

Which rule does it use?

The president has various powers to implement tariffs under US trade law. Trump has used these laws as aggressively as any president in modern history.

Canada-US trade expert Laura Dawson predicts that Trump will apply different tools to different countries and products.

“I think he’s going to try every avenue,” Dawson said.

• This Sunday, a cross-country poll is asking: What does another Trump presidency mean to you? How seriously are you taking his threat of tariffs? fill out This form And you can appear on the show or have your opinion read on air.

Those potential tools inclusion Section 232 of the Trade Expansion Act of 1962, as Trump once did on steel and aluminum, would allow tariffs on national security grounds.

In the year There is Section 301 of the Trade Act of 1974 – which allows the president to punish unfair practices, as Trump and President Joe Biden have done. Both are done with China.

Another section of the 1974 Act, Section 122, authorizes tariffs to alleviate trade imbalances. It is worth noting here that Trump has been complaining about unbalanced trade.

Finally, there is a tariff tool that has not been used before: the In 1977 International Emergency Economic Powers Act (IEEPA), in the event of a national emergency.

While no president has ever implemented that 1977 law to impose tariffs, it has an attractive quality to a diehard protectionist: it works quickly.

Implementation of the IEEPA first requires the President to declare a national emergency. Trump clearly hinted at one when he complained about the damaged border with Mexico and Canada.

“If you want to push the legal boundaries, you can try that,” says trade lawyer, analyst and one-time World Trade Organization official Simon Lester.

“You can say hey, the IEEPA gives us this authority. We’re putting a 10 percent tariff on the whole world or on these specific products. Let’s see what the courts say about that,” Lester said.

All other laws contain certain exceptions: Sections 232 and 301, for example, require some kind of study, and Section 122 is used only for 150 days. Trump may turn to these laws for some of his actions.

How big will it be?

There’s a reason estimates of the economic damage vary so much: Trump was almost comical when discussing the size of the tariffs.

Now he is threatening 25 percent tariffs on Canada and Mexico, which would be devastating and would cause a huge downturn in the economy if implemented.

But he has been all over the map since the start of his latest presidential campaign, and even in recent weeks has been involved in various arguments for tariffs.

“We’ve heard 10 percent universal (tariffs), 20 percent global, 60 percent in China, 40 percent in China, 100 percent in automobiles, 200 percent, 1,000 percent. Expert Mark Goldwein.

“I think we’ve all laughed at that, but I get it,” Goldwein said.

Trump has made it clear in his public statements that he has not settled on any specific number. It is designed to use tariffs to achieve certain things.

But any significant tariff on Canada will cause long-term damage, according to Dawson, even if the tariff is only short-term.

“It drives investment south. It freezes production decisions,” she said.

She is hearing that international companies are moving some products from Canadian facilities to the US. Honda has it He was angry in public About Canada production cuts.

How fast does it go?

There are reasons we believe we won’t receive the full photo on Monday. They were. Various Media Leakage Debates in Trump’s inner circle and the nominee for Treasury secretary hinted at congressional hearings that the full policy is still being worked out.

Also, moving slowly has benefits.

One is to test market reaction, and not risk a meltdown on Day 1 of his presidency. With this in mind, there are some helpers. It is reported Asking Trump to start with low tariffs and gradually raise them by a couple of percentage points each month.

Scott Lincicome, a business attorney and analyst, expects a gradual increase. He said he expected limited action on Day 1: perhaps tariffs on China and some announcement to start the process for more tariffs.

For example, Trump could declare a national emergency under IEEPA or launch a months-long investigation under Sections 232 or 301, he said.

“These things give Trump the ability to run around the world threatening everyone without hurting the economy. I mean, it hurts the economy — invisibly. The uncertainty of trade policy hurts investment,” Lincicome said.

“(That puts) Trump between the Trump Show, the Ford Festivas from Mexico and the auto parts going to BMW in South Carolina without the tariffs.”

Another argument for going slow: the budgeting process. Later this year, congressional Republicans plan to pass a marquee tax cut bill.

It is complex and involves Process To bypass the Senate’s three-fifths filibuster rule and pass the budget bill with a simple vote.

To make the tax reduction permanent, the bill is not allowed to add to the deficit; Tariff revenue It helpsAccording to a document prepared by Republican lawmakers.

It’s a long shot. Congressional Republicans are currently insisting that this is not their plan. And, oddly enough, they still don’t like tariffs because trying to enshrine them in long-term law would result in a near-vote killing of the law.

“The tariffs are not legislated,” Lincicom said.

But it’s too early to be sure, in Goldwein’s view. Republicans are desperate to pass tax cuts and, in his view, “they’re going to try everything,” he said.

What is Trump’s purpose here?

Trump’s tariffs have three objectives, the Treasury secretary nominee told a Senate confirmation hearing last week.

One is to address unfair trade practices by industry and country, said Scott Bessant, citing China and steel in particular.

A second: to collect income. “For the federal budget,” said billionaire financier Besant.

And finally, there’s the art of the deal. He explained that Trump believes that “negotiating” tariffs can be used against other countries instead of sanctions.

See how Canada responded. That threat of tariffs prompted Canada to announce a laundry list of policies related to border security, immigration, fentanyl trafficking and organized crime.

Besant did not specifically mention Canada. But when he talked about tariffs, he pointed to Mexico and fentanyl as potential bargaining chips.

What can stop Trump?

Do not count on the courts. Business experts interviewed for this story, and others. writingcall it loud. An unlikely thing They said impeachment against Trump would succeed.

He said the justices have mostly presented to presidents on national security and tariff issues. So did Congress during the Cold War, adding to these presidential powers through legislation.

If there are any checks on Trump — any checks — look elsewhere. It is the largest market in Lincicom’s view.

Trump would be loathe to start his presidency with negative economic headlines like a stock-market crash, Lincicome said.

And the market is not expecting big tariffs given its current behavior. At best, Lincicom said it expects tariffs on China and a few critical goods.

“This is not a huge international tariff. It is not a 25 percent tariff on avocados from Mexico,” Lincicom said. “(Trump) wants to get rid of a million news stories about Trumpflation. About raising guacamole prices before the Super Bowl,” he said.

“I think it serves as a check.”

To be clear: If Trump barrels forward, charges will fly. But even if those lawsuits succeed, Lincicom said, it could take months or years of litigation to get rid of them.

“By the time it goes through the courts, the damage has already been done,” he said.