Analysis by Energy Workforce President Tim Tarpley
After a one-month pause after the original announcement, the White House has decided to move forward with implementing the delayed 25% tariffs on Canada and Mexico and an additional 10% tariff on China. The addition of the 10% on China brings the total China tariff level to 20%.
The White House announcement came with little additional information provided other than a statement indicating that the tariffs will be on all products coming into the United States and that they will remain in effect until the flow of drugs (Fentanyl specifically mentioned) and illegal aliens are stopped from crossing the respective borders. No additional metrics or specifics were given. There is also no indication that any exclusions or product exemption process will be implemented. This does not necessarily mean that a comprehensive industry or specific product exemption process could not be added later. However, the Administration has consistently indicated that this will not occur.
In response, we have seen a series of retaliatory actions by all three countries. Canada has enacted an immediate 25% retaliation against a targeted list of $30 billion in US goods. After 21 days, if the tariffs still remain on Canada, the remaining $130 billion in US goods imported into Canada will face the same 25% tariff. There are also reports that Canada plans to introduce a 25% export tax on the electricity it sends to around 1.5 million American homes in MN, MI, and NY. Mexico is also planning a series of retaliatory tariffs and actions, which they have indicated they plan to announce on Sunday. China hit back primarily on agricultural goods in their first round of retaliation, imposing 15% tariffs on US imports of chicken, wheat, corn and cotton and 10% on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products.
President Trump addressed the tariffs during his Tuesday night address to Congress and made it clear during his speech that he was going to move forward. The only current exclusion offered is the one-month delay on some American-made automobiles. Congressional reaction so far has been muted, with most in Congress signaling that they are willing to give the President a wide berth on this issue, at least for now.
EWTC’s position remains that a blanket “critical energy security” exemption (or individual product exemption process) is necessary to avoid the unintended consequence of raising the cost of energy production in the United States. Critical discussions with both the Administration and Congress will focus on this aspect. If you would like to join the EWTC tariff task force, please email Maria here to be added to the mailing list.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
