Canada, Mexico To Be "Exempted Indefinitely" From Tariffs; Peso, Loonie Soar

With just minutes to go until Trump's 3:30 pm press conference, the big leaks have started hitting the tape, and according to the AP, while the Trump tariffs will take effect in 15 days, more importantly Canada and Mexico will be "exempted indefinitely."


Of course, the market's attention is drawn much closer to the latest flip-flopping by the admin which as recently as a few hours ago had decided against exemptions, only to change its mind again in the last minute.

And while the decision to exempt Mexico and Canada may be strategic, perhaps meant to streamline Nafta negotiations, the reality is that it will thoroughly water down the impact of Trump's tariffs in the first place, because as Harbor Intelligence wrote overnight, if Trump exempts Canada from proposed aluminum tariffs, "it would impair the ability of U.S. smelters to restart capacity and defeat the purpose of the import duties."

As Harbor managing director Jorge Vazquez adds, "excluding the biggest aluminum shipper into the U.S. from the tariffs could also encourage other U.S. allies to ask for exemptions, thereby driving down the cost of delivering metal to the Midwest and making imported metal more affordable for users.

Ultimately, if exemptions are limited to Canada it could mean a windfall of as much as $300 million for Canadian producers given the Midwest premium would still reflect the tariff, Vazquez said adding that "This shows that the entire section 232 is a mistake.”

He is right, after all last month, Commerce Secretary Wilbur Ross said the aim of his duty recommendations to the president was to boost domestic aluminum capacity utilization to 80 percent. If Canada is exempt it would achieve none of that stated goal.

Meanwhile, on the steel side, the exemptions will mean that the #1 and #4 suppliers of steel to the US will not only be allowed to sneak through, but grab market share from the remaining nations.

Whatever the thinking behind the last minute change, both the loonie and the peso love it, and have soared near session highs in kneejerk response.


And of course, stocks are kneejerking higher, seemingly not caring that the tariffs will remain for China and thus our biggest trading partner?


Looney SloMoe Thu, 03/08/2018 - 14:58 Permalink


Reciprocity is the only way to go – not “carve outs” or “waivers”, not “blanket” or “surgical” tariffs.

If a country does not allow our products in, or taxes the shit out of them, then fuck’em – tariff the shit out of their goods, too.

Unfortunately, the “leveling the playing field” always goes one way – UP. When was the last time two countries got rid of all tariffs?

Meanwhile, the Campbell Soup Company should start making CryptoSoup that doesn’t require a can at all.

Virtual Soup - "M'm! M'm! Good!"   ;-)


In reply to by SloMoe

NidStyles Looney Thu, 03/08/2018 - 15:00 Permalink

It’s a fact that the Cartels work for the Jews in the US. Where do you think they get the child prostitutes to entrap the political class?


Born to Gondola eh Jews? You’re even sending retired cops to try and intimidate me now? Take a knee schlomo. Israel is that way —————>

In reply to by Looney

crazzziecanuck DillyDilly Thu, 03/08/2018 - 17:56 Permalink

No, they're not.  Nearly all of the "Canadian" and "Mexican" steel industry is American owned.  That's where they went to expand missing capacity when they shutdown places like Youngstown.  Plus, transfer pricing across the border allowed them to get richer by avoid taxation.

Trump got some unpleasant phone calls from these firms (and their associated banks) and had to capitulate.  That's why Canada and Mexico are getting exemptions.  Not because the USA is being a nice neighbor, but because the tariffs would harm rich corporations that own these facilities and rely on reselling steel inside American borders.

In reply to by DillyDilly

FactDog Looney Thu, 03/08/2018 - 15:05 Permalink

Looney!  You are a nut! Canada contributes more to the US than in terms of trade and wealth than any other nation on earth.  

I wish I could get a small look into that cavity you call your brain and be in wonder about how deep stupid goes!


In reply to by Looney

NumbersUsa Looney Thu, 03/08/2018 - 15:29 Permalink









In reply to by Looney

buzzsaw99 Thu, 03/08/2018 - 14:55 Permalink

there are only two entities which should have heavy tariffs placed upon them.  china, and the eu (including the uk for being asshole election meddlers).

besnook Thu, 03/08/2018 - 15:02 Permalink

the usa should annex canada, create a bunch of new states, get rid of their universal healthcare and steal all their commodities fair and square then there could be free trade with them. we could do the same with mexico but vacations would be too expensive if we did.

itstippy besnook Thu, 03/08/2018 - 16:05 Permalink

We should have invaded Mexico after 9/11 instead of Iraq.  It made just as much sense, they're a lot closer, and they have lots of oil.  The natives would be happy to be liberated from the druglords and corrupt Mexican officials.  Total win/win.

Canada is un-invadable.  The terrain is impassible; you couldn't get an Abrams tank a hundred yards without running into a rock ridge, falling into a gorge, or getting submerged in a lake.  The winters are terribly cold and last for 10 months.  There're lots of natural resources, but the only people hardy enough to take advantage of them are Canadians.  Just let the Canadians do the work of exracting the resources and we'll buy them from them with all the money we get from Mexican oil.

In reply to by besnook

Robert Trip Thu, 03/08/2018 - 15:03 Permalink

The tail section of the F35 is manufactured from aluminum and assorted alloys in Montreal, X-Ray ed and sent across the border.

It is classified as an unfinished product.

You want to tax your own product?

The chassis for Ford's of various makes and models cross the border 7 times between Detroit and Windor before a finished product is arrived at

You want to tax that steel multiple times too?

Plenty of non-informed idiots on both sides of the border concerning these tariffs.

Rex Andrus Robert Trip Thu, 03/08/2018 - 15:34 Permalink

I don't want anything necessary for the national defense to be sourced from a foreign power. To my knowledge the first contracts for US armament sourced from a foreign power was under Bush 41 for tanks to be made in Germany, around 1991. Certain there is a clause in the Constitution requiring this due to vulnerability resulting from such dependency and political conflicts of interest such as this case you cite, detailed in a federalist paper.

In reply to by Robert Trip