You've completely ignored what I wrote. The formula the white house used to set tariffs would result in lower tariffs for Canada and Mexico. If both countries were included in the formula Trump would have to cut announced tariffs on both countries.
You're disagreeing with statements by the President of Mexico, describing the result of ongoing negotiations?
Canada and Mexico share a physical border with USA, which has already resulted in unique (i.e. unrelated to the math of 180+ other countries which don't physically border USA) tariffs tailored to border security goals, under national security emergency directives which overrode USMCA.
USMCA has been historically gamed by international manufacturers seeking more favorable terms for products destined to the US market. As stated by the leadership of both Mexico and Canada, USMCA will need to be renegotiated to address issues identified by all three parties, which would then reduce the need to invoke the emergency-power tariffs that have been deployed against 180+ countries.
> As stated by the leadership of both Mexico and Canada, USMCA will need to be renegotiated to address issues identified by all three parties
On the canada side, i think the issue identified that needs to be addressed is the US president being a dick.
(I'm not being sarcastic here, that is my genuine impression. If you disagree can you cite a source for what issues canada wants addressed? Obviously times are a bit weird since we are having an election and its considered bad form for the gov to do anything during election season)
> Some Members of Parliament have also advocated for increasing trade barriers on Chinese imports alongside the United States, which the Canadian government has recently begun doing unilaterally. Suggesting Canada could be interested in coordinating those China-related trade policy measures across all three USMCA members, Deputy Prime Minister Chrystia Freeland recently said she sympathizes with US concerns that “Mexico is not acting the way that Canada and the US are when it comes to its economic relationship with China.”
That doesn't seem to support canada wanting to renogtiate usmca. The best way of handling that issue is probably not renegotiation (its way too specific of a situation to write a clause into the agreement for). Furthermore, Chrystia freeland hasn't been deputy PM for four months now, and the situation has changed a lot since then (not to mention we also have a new prime minister since then). At the time of that statement i don't think there was much appetitie for renegotiating usmca.
Compared to now where our current PM is straight up saying "The old relationship we had with the United States, based on deepening integration of our economies and tight security and military cooperations, is over"
> A broader change to the USMCA also looks likely, with Carney saying there had been “so many violations” that the free trade agreement needs “a renegotiation”.
Trump tariffs are based on the International Emergency Economic Powers Act (IEEPA) of 1977, overriding USMCA and other trade agreements. Any renegotiation of USMCA wouldn't stop the potential use of IEEPA to selectively override parts of USMCA v2.
It's more likely that USMCA violations referenced by Carney and Freeland were done by Mexico/China, at the economic expense of both Canada and USA.
All trade agreements are about surrendering some domestic power. What act or other domestic legal instrument is used is irrelavent.
In context it seems very unlikely this is about mexico, as carney is running on a platform of closer integration with mexico and strongly distancing canada ecconomically from the united states. Carney's ecconomic policies are not identical to the previous administration - it makes about as much sense to refer to trudeau/freeland's statements as it would to try and explain trump's policies by referencing things biden said/did.
Napkin math cannot apply to Mexico and Canada tariffs, because the USMCA (and preceding NAFTA) have long intertwined North American manufacturing supply chains, with components moving back and forth across borders.
Even the emergency border security tariffs and counter-tariffs announced earlier this year by US and Canada have since been carefully tailored for specific products and exceptions, as cooler heads prevailed on both sides of the border, to minimize immediate and catastrophic ripple effects across North American manufacturing.
The entire new tariff scheme is napkin math. Although it could also be napkin math done by some LLM.
If it was real math, it wouldn’t assume that there is some magical trade elasticity that is completely linear in the tariff rate. And real math might notice that the prices of goods that are subject to tariffs are an utterly absurd measure of value, cost, movement of money, or anything else.
Consider:
A US company does a bunch of R&D and designs a widget. They pay $10 each to a Chinese factory to manufacture it. They warehouse the widgets in Hong Kong. Each widget purchased by a US customer results in a “$100” item being imported. $90 stays in the US. $10 goes to China.
The same company does exactly the same thing except they ship in bulk to a US warehouse. The imported item is now “$10”. The tariff is 1/10 as much, the napkin math sees 1/10 as much trade imbalance, but the economic effect of the import is identical.
Or maybe they ship from Hong Kong to a French customer. This should be seen as an export from the US to France with $90 and an export from China to France worth $10. But I think it’s invisible to the napkin math.
Now consider that the US is home to some wildly successful companies with names like AMD and Nvidia. They sell chips for thousands of dollars each, worldwide. They pay TSMC quite a lot less to make them. If they warehouse in the US, they may be screwed now! If they ship from Taiwan to a buyer somewhere else, the US has, in effect, exported quite close to the full sale price of that chip, but no trade goods ever touched US soil. Can the napkin math sees that?
You can bet that several other countries use brains instead of napkins and will have no difficulty thinking that they could retaliate by restricting or taxing of these US-designed goods even if they’re imported from elsewhere. And China is working very hard to make their own alternatives, and they will surely be willing to export them.
(Don’t forget: The UK and Israel have CPU design expertise. ASML is dependent on tin zapping tech from San Diego, but they’re an EU company. And it looks like the successor to that tin zapping tech might be free electron lasers, and that technology come from US national labs and universities, but other countries also have FELs, and the nerdy physicists who fiddle with them are not happy with the US government right now.)
See the 2024 paper (40 pages) by Stephen Miran, current chair of the Council of Economic Advisers, which has influenced tariff policy, https://news.ycombinator.com/item?id=43589350
> Miran.. points to Trump’s application of tariffs on China in 2018-2019, which he argues “passed with little discernible macroeconomic consequence.” He adds that during that time the U.S. dollar rose to offset the macroeconomic impact of the tariffs and resulted in significant revenue for the U.S. Treasury.. “The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019,” the report said. “As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7 per cent, so that the after-tariff USD import price rose by 4.1 per cent.”
(c) Should any trading partner take significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters, I may further modify the HTSUS to decrease or limit in scope the duties imposed under this order.
Lobbyists and trade negotiators can read 700 words of strawman "napkin math", or 40 pages by CEA chair, or interviews with administration officials, to inform their negotiating position.
This is nonsense. The “non-reciprocal trade arrangements” mentioned don’t obviously exist at all, and, to the extent they exist, they are certainly not measured in any meaningful respect by the formulas going into the tariffs.
Having spent a whopping ten minutes finding official data (and I have no idea how good this data is as a whole — probably mediocre but far better than whatever nonsense the USTR is doing):
(a) The EU seems to thing that they run a trade surplus with us in goods and a deficit in services, and they’re close to balancing out.
(b) The US’s own data shows a net surplus with some countries and a net deficit with others. See here, page 28:
If the US was trying to negotiate sensibly and to identify anything remotely non-reciprocal, they would be rewarding the countries with positive numbers in that table! The US should be delighted to trade with Australia, Brazil, Belgium, the Netherlands, etc! By all means, we should buy more widgets and sell more fancy services!
As a silly analogy: if your housemate goes on a wild drunken rampage and starts trashing everything in sight while screaming “you need to reciprocate and wash the dishes more often and I will continue trashing things until you wash the dishes reciprocally,” the situation is not a viable negotiation tactic.
Do you dispute this? It's trivial to calculate.