US-Canada electricity tariff storm! Trump angrily retaliates in a post, Canada urgently cancels 25% tax rate

In response to the high tariffs imposed by the United States, Canada originally planned to impose a 25% tariff on electricity from certain states, causing a strong backlash in the United States. US Secretary of Commerce Howard Lutnick, in an interview on 3/12, stated that US President Donald Trump immediately retaliated upon learning this news this morning, strongly demanding that Canada withdraw this measure. On the same day, Canada conceded and directly cancelled the tariff increase.

The tariff dispute is related to the drug problem, and Trump has stated that he will not sit idly by.

Assuming Canada really imposes a carbon tax, it will affect the daily electricity use in Michigan, New York, and Minnesota. However, Trump immediately instructed his government officials to communicate with Canada, ultimately leading to the cancellation of the tariff.

However, Canada's decision to take this action is in response to the recent imposition of tariffs on Canadian goods by the United States. While many see this as a retaliatory measure by Canada, Lutnick emphasizes that the U.S. tariff policy towards Canada is primarily aimed at combating drug trafficking.

Lutnick pointed out that about 75,000 Americans die from fentanyl and other drugs overdose each year, and a large amount of drugs come from the Canadian border. The US government considers this a serious national security issue, therefore using trade sanctions to pressure Canada to tighten control over drug influx. Despite mutual pressure between the US and Canada, the tough stance of the Trump administration forced Canada to compromise, eventually choosing to withdraw the tariff on aluminum.

Maintain 25% steel and aluminum tariffs, but stop the 50% tariff plan

In addition to the electricity tax, the United States originally planned to increase tariffs on Canadian steel and aluminum products to 50%, but Lutnick revealed that this plan has been canceled and currently remains at 25%. He said that steel and aluminum are key industries for U.S. national security and cannot rely on other countries for supply.

In addition, Lutnick also emphasized the need for the United States to ensure that the supply chains of important industries such as automobiles, pharmaceuticals, semiconductors, are produced domestically in the United States, which is also one of the reasons for the Trump administration's push for fair trade and Reciprocal Tariffs policy.

Trump's trade war strategy, exerting pressure on opponents to achieve U.S. interests

In response to the trade friction between the United States and Canada, there have been external doubts about the Trump administration's inconsistent policies, often adjusting tariffs in the short term, causing market unrest. However, Lutnick emphasized that this is precisely Trump's negotiation strategy: first apply pressure, force the other party to make concessions, and then discuss conditions.

He gave an example. When a certain country 'does not listen,' Trump will use strong measures to exert pressure. 'You disagree? Then we will be tough, and the other party will immediately be willing to sit down and talk.' Lutnick believes that traditional government negotiations often drag on, but Trump's approach can quickly reach agreements. Like the case of Canada's electricity tariff, which was 'resolved within a day'.

The manufacturing industry is returning to the United States, pledging to create a large number of blue-collar jobs

Another major trade policy goal of the Trump administration is to bring back American manufacturers from overseas. Lutnick bluntly stated that the previous North American Free Trade Agreement (NAFTA) seriously harmed the American automotive industry, leading to many car factories moving out to Canada and Mexico, causing unemployment among American workers and exacerbating social problems.

'If your factory moves to Canada or Mexico, your life is ruined, then drugs, alcohol, despair, and finally suicide. That's why Trump wants to bring these factories back.' He emphasized that the Trump administration's tariff policy is to force businesses back to the American market, increase job opportunities in American manufacturing, and create demand for high-tech blue-collar workers. Lutnick predicts that these job vacancies could pay between $125,000 and $150,000 annually, becoming the direction of future economic development in the United States.

Stock market fluctuations, declining consumer confidence, Lutnick said it will be fine when Trump comes back

Recently, the US stock market has experienced significant volatility, with the Nasdaq index falling by 14%, causing market concerns about the impact of the trade war on the economy. Lutnick countered, stating that this is a mess left by the Biden (Joe Biden) administration, and once Trump's policies are fully implemented, the economy will rebound. He predicts that the US will see a revival in manufacturing, leading to a reduction in trade deficits and ultimately causing a surge in the stock market.

When it comes to tax reform, Lutnick revealed that Trump's long-term plan is to exempt Americans with annual incomes below $150,000 from paying income tax. In addition, he suggested that the United States should sell green cards, 'the United States issues 400,000 green cards each year, if one is sold for $5 million, that is $2 trillion in revenue.' This revenue can reduce the deficit and lower the tax burden on the United States.

Will Trump's policies be successful, the founder of Bridgewater is quite worried

Overall, the economic policies of the Trump administration are centered on 'trade wars, reshoring of manufacturing, and tax cuts', attempting to enhance the competitiveness of the U.S. economy. However, the uncertainty brought about by these policies has also intensified market turbulence.

Recently, Bridgewater Associates, founded by Ray Dalio, also sounded the alarm during an interview, warning that the 'America First' economic strategy promoted by the Trump administration, which reshapes the global economic order by imposing tariffs on trading partners, not only poses risks at the economic level but may also lead to international confrontation and conflict. Whether this 'Trumpian economics' can bring long-term prosperity or create greater economic risks remains to be seen in the future implementation.

(Ray Dalio warns of US debt crisis: Global economy may face a 'shocking' Rebound)

This article The U.S.-Canada electricity price tariff storm! Trump is angry and retaliates by canceling the 25% tax rate in Canada. It first appeared on Chain News ABMedia.