On August 22, Canadian Prime Minister Carney dropped most retaliatory tariffs on US products, beginning September 1, reported Expana in an article that suggested the move may help soothe trade relations. Most products are still subject to free trade under the United States-Mexico-Canada Agreement (USMCA). For now, Canadian trade officials will sustain import tariffs on US autos, steel, and aluminum.
Adjacently, the percentage of goods from Canada classified as USMCA-compliant rose to 81% in June, up from 56% in May, according to US Customs and Border Protection (CBP) data reviewed by Fitch Ratings. It seems that international traders are leaning on this free-trade agreement now more than ever.
Also last week, more details about the US-European Union trade deal were published by the White House. Now, trans-Atlantic trade is expected to flow more predictably, cited Expana. So, US officials agreed to apply the higher of either the US Most Favored Nation (MFN) tariff rate or a tariff rate of 15% to imports from the EU, reported Expana.
By September 1, the US will apply only the MFN rate on EU products like cork and aircraft parts. Both parties note that other sectors and products “that are important for their economies and value chains” may be added to that list—providing potential for lower tariffs on other commodities in the future.
For example, a similar scenario may be applied to US-Indonesian trade, reported Expana.
"We are waiting for their response, but during the meeting, basically, the principle (exemption) has been agreed for products not produced in the US, such as palm oil and cocoa and rubber ... it will be zero or close to zero," said Indonesian trade official, Airlangga Hartarto in an interview with Reuters.
