- Trump’s new tariff policy resets U.S. foreign trade strategy, excluding Mexico and Canada due to the USMCA while maintaining targeted tariffs tied to fentanyl trafficking and migration concerns
- The 10% baseline tariff applies to all nations, while reciprocal tariffs for 60 “worst offenders” take effect soon, calculated at half of their imposed barriers on U.S. goods
- Sector-specific tariffs will target semiconductors, pharmaceuticals, and critical minerals separately as the administration declares a national emergency over trade deficits and economic security risks
The “Liberation Day” tariffs are finally here. Today, President Trump announced a major new tariff policy that pretty much resets the entire foreign trade policy in relationship to the United States.
However, two key U.S. trading partners — Mexico and Canada — were absent from the list of reciprocal tariffs. This decision raises critical questions about the reasoning behind these exclusions and the broader implications for North American trade relations.
The Role of the USMCA
The primary reason why Mexico and Canada escaped their inclusion on the list is due to their role in the United States-Mexico-Canada Agreement (USMCA). This trade pact among North American nations established duty-free provisions for many goods exchanged between the three countries.
Like the European Union and the Mercosul in South America, the USCMCA allows the U.S. and its neighboring countries to subvert economic barriers, streamline trade agreements, and enhance cross-border cooperation without facing the same level of external tariffs and restrictions imposed on non-member nations.
Did Mexico and Canada Escape Unscathed?
Not completely. While the USCMCA plays a major role in shielding the two nations from Trump’s tariffs, the earlier taxes imposed by Trump on the argument that the U.S. borders are suffering from fentanyl trafficking and immigration issues will remain in place until the President decides that measurable progress is achieved. However, USMCA-compliant goods will continue to enjoy exemptions.
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