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mark carney
Economists Pan 'Insane' New Trump Tariffs as US Consumers Struggle With Rising Prices
"Trump's definition of 'winning' is hitting the American people with ever-higher taxes," said economist Dean Baker.
Aug 01, 2025
U.S. President Donald Trump on Thursday used emergency authority to impose high tariff rates on imports from dozens of American trading partners, including Canada—a move that economists criticized as a senseless approach to global trade that will further increase costs for consumers who are already struggling to get by.
Trump outlined the new tariff rates in executive orders signed just ahead of his arbitrary August 1 deadline for U.S. trading partners to negotiate a deal with the White House, whose erratic, aggressive, and legally dubious approach has alarmed world leaders.
Under the president's new orders, Canadian goods that are not covered by the U.S.-Mexico-Canada Agreement (USMCA) will face 35% import duties, while steel and aluminum imports will face a 50% tariff rate.
Trump claimed Canada "has failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs." But Canadian Prime Minister Mark Carney hit back in a statement early Friday, noting that Canada "accounts for only 1% of U.S. fentanyl imports and has been working intensively to further reduce these volumes."
"While we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser-focused on what we can control: building Canada strong," Carney added. "Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partnerships throughout the world."
Economist Brad Setser said that while the impact of the higher tariff on Canadian imports could be muted because of the exemption of USMCA-covered products such as oil, the 35% rate is still "insane" and "dumb."
"Same with the high tariff on Switzerland. Crazy," Setser wrote, pointing to the 39% rate for Switzerland imports. "This isn't just protectionism, it is bad protectionism—and will have all sorts of unintended consequences."
The new tariff rates for Canadian goods will take effect Friday while the higher rates for other nations such as Brazil (50%), India (25%), and Vietnam (20%) won't kick in until next week "to give Customs and Border Protection officials time to prepare," The Washington Post reported. Customs and Border Protection collects tariffs, which are effectively taxes paid by importers—who often pass those costs onto consumers in the form of higher prices.
"Trump's definition of 'winning' is hitting the American people with ever-higher taxes," Dean Baker, senior economist at the Center for Economic and Policy Research, wrote late Thursday.
Recent U.S. economic data indicates that Trump's tariffs are already putting upward pressure on prices—and companies are using the president's trade chaos as an excuse to drive up prices further and pad their bottom lines.
The Tax Foundation noted earlier this week that "a variety of food imports" will be impacted by Trump's tariffs, likely leading to "higher food prices for consumers." More than 80% of Americans are already concerned about the price of groceries and many are struggling to stay afloat, according to survey data released Thursday by The Century Foundation.
Baker warned Thursday that even nations that have agreed to trade frameworks with the U.S. are not out of the woods.
"Deals are meaningless to Trump. He'll break them in a second any time he feels like it," Baker wrote. "I trust everyone negotiating with Trump understands that fact."
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Canadians Fume at Trump 'Tariff Bullying' as Carney Says Ottawa to Recognize Palestine
"It is time to align with human rights and international law. It is not a time to bend the knee," said the National Council of Canadian Muslims.
Jul 31, 2025
President Donald Trump said Wednesday that Canada's decision to conditionally recognize Palestinian statehood "will make it very hard" to complete a trade deal with the United States' northern neighbor, prompting widespread condemnation of the president's not-so-thinly-veiled threat.
On Wednesday, Canadian Prime Minister Mark Carney announced that Ottawa will grant formal recognition to Palestine at September's United Nations General Assembly (UNGA) in New York if the Palestinian Authority agrees to hold an election in 2026 and implement other democratic reforms.
Asked if he had consulted the U.S. about recognizing Palestine, Carney told reporters that "we make our own independent foreign policy positions."
Carney's announcement came as Israel—which is facing an ongoing genocide case at the International Court of Justice—is under increasing pressure to end its 663-day, U.S.-backed war and siege on Gaza, which has killed or maimed more than 220,000 Palestinians and fueled famine.
The far-right government of Israeli Prime Minster Benjamin Netanyahu, who is wanted by the International Criminal Court for alleged crimes against humanity and war crimes, is also openly pursuing plans to ethnically cleanse Gaza of Palestinians so it can be transformed into what Trump has described as "the Riviera of the Middle East."
Critically, Carney's announcement also came amid trade deal negotiations between U.S. and Canadian officials ahead of Trump's August 1 deadline for 35% tariffs on all imported Canadian goods not covered by the U.S.-Mexico-Canada Agreement.
"More evidence there's no limit to Trump's goal to use tariff bullying to chip away at the sovereignty of other countries... on any issue at all," Canadian economist Jim Stanford said Thursday on the social media site X.
"See also his harsh tariffs on Brazil for prosecuting Trump's close friend and coup schemer Bolsonaro," he added, referring to disgraced former far-right Brazilian President Jair Bolsonaro, who is also known as the "Trump of the Tropics."
What do we even think we are negotiating here? A "deal" that will be subject to constant threats to tear it up based on the arbitrary moment-to-moment mood swings of our trading partner's president? Trump's word is meaningless, why delude ourselves to believe he'd honour any "deal" we'd negotiate?
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— Luke LeBrun (@lukelebrun.ca) July 31, 2025 at 6:27 AM
Dean Baker, a U.S. economist who co-founded the Center for Economic and Policy Research, said on X: "Looks like Trump wants us all to pay higher taxes in support of Israel's mass murder in Gaza. Can someone explain to me how this is 'America First?'"
The National Council of Canadian Muslims (NCCM) said on social media that "Donald Trump has openly endorsed plans to ethnically cleanse and annex Gaza, along with his own outrageous ideas of making Canada the 51st state."
"As Canada strikes out an independent foreign policy by planning to recognize Palestinian statehood, Trump's attempt to suggest that the trade deal is in peril because Canada took a step in the right direction is just another transparent attempt at bullying from a man who changes the goal posts in every trade 'negotiation' in any case," the group continued.
"This is the time to stand strongly in support of Canadian values," NCCM added. "It is time to align with human rights and international law. It is not a time to bend the knee. Canada must push forward by imposing further sanctions on Netanyahu's government, reviewing the Canada-Israel Free Trade Agreement, applying a full two-way arms embargo on the [Israel Defense Forces], and helping those escaping Gaza arrive in Canada."
Although Canada's government insists that it has prohibited arms transfers to Israel since January 2024, research by four groups—World Beyond War, the Palestinian Youth Movement, Canadians for Justice and Peace in the Middle East, and Independent Jewish Voices—revealed this week that there have been at least 47 shipments from Canadian weapons manufacturers to Israeli armaments companies between October 2023 and July 2025.
Trump and members of his administration sought to assuage anxiety over U.S. tariff whiplash by promising bigger, better deals. In April, Peter Navarro, the top White House trade adviser, vowed that Trump would hammer out "90 deals in 90 days." However, 90 days later, the U.S. has finalized deals with around half a dozen nations, with the suspension of Trump's so-called reciprocal tariffs set to expire on August 1. After that, Trump is set to impose tariffs as high as 50% on many countries.
Trump's attacks on longstanding allies have prompted calls for solidarity among Western democracies as they move to recognize Palestine.
"By trying to bully nations out of recognizing Palestine, Trump is making himself the biggest hurdle to a two-state solution and a lasting peace," British Member of Parliament Ed Davey, who leads the center-left Liberal Democrats, said on the social media site Bluesky Thursday. "The U.K. must stand strong with Canada and our allies, we should recognize the Palestinian state right now. No more delays."
Earlier this week, U.K. Prime Minister Keir Starmer said Britain stands poised to formally recognize Palestine at September's UNGA if Israel does not take "substantive" steps to end its war on Gaza, allow aid into the strip, and renounce annexation of the illegally occupied West Bank. Trump signaled that he would not object to U.K. recognition of Palestine.
Around 150 of 193 U.N. member states already recognize Palestine, and this week France and Malta also said they would do so at the UNGA. On Thursday, Portuguese Prime Minister Luís Montenegro said that his government "is considering recognition of the Palestinian state."
There have been increased calls for Canada to find ways to lessen its dependence on the U.S.
"Clearly, August 1 is barely the beginning of this struggle for Canada's heart and soul, never mind a 'deadline,'" Stanford asserted. "Regardless of what happens this week, Canada must charge ahead on this epic mission to rebuild an economy that can survive independently of the U.S."
In a bid to gain some independence from their increasingly unreliable neighbor, Canada and Mexico are working to establish a new land and sea trade corridor that would completely bypass the United States, an initiative projected to cost the U.S. economy at least tens of billions of lost dollars, according to PPR Mundial. In addition to utilizing diverse modes of transport, including rail and maritime connections, the bilateral proposal is expected to incorporate advanced digital technologies including blockchain to manage customs and other formalities.
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Caving to Trump, Canada Drops Tax on US Tech Firms
One journalist accused Canadian Prime Minister Mark Carney of chickening out.
Jun 30, 2025
Acquiescing to pressure from the Trump administration, the Canadian government announced on Sunday that the country will rescind the digital services tax, a levy that would have seen large American tech firms pay billions of dollars to Canada over the next few years.
The Sunday announcement from the Canadian government cited "anticipation of a mutually beneficial comprehensive trade arrangement" as the reason for the rescission.
"Today's announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month's G7 Leaders' Summit in Kananaskis," said Canadian Prime Minister Mark Carney in the statement.
The digital services tax impacts companies that make over $20 million in revenue from Canadian users and customers through digital services like online advertising and shopping. Companies like Uber and Google would have paid a 3% levy on the money they made from Canadian sources, according to CBC News.
The reversal comes after U.S. President Donald Trump on Friday blasted the digital services tax, calling it a "direct and blatant attack on our country" on Truth Social.
Trump said he was suspending trade talks between the two countries because of the tax. "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period," Trump wrote. The United States is Canada's largest trading partner.
Payments from tech firms subject to the digital services tax were due starting on Monday, though the tax has been in effect since last year.
"The June 30, 2025 collection will be halted," and Canada's Minister of Finance "will soon bring forward legislation to rescind the Digital Services Tax Act," according to the Sunday statement.
"If Mark Carney folds in response to this pressure from Trump on the digital services tax, he proves he can be pushed around," said Canadian journalist Paris Marx on Bluesky, speaking prior to the announcement of the rescission. "The tax must be enforced," he added.
"Carney chickens out too," wrote the author Doug Henwood on Twitter on Monday.
In an opinion piece originally published in Canadian Dimension before the announcement on Sunday, Jared Walker, executive director of the progressive advocacy group Canadians for Tax Fairness, wrote that all the money generated for the tax could mean "more federal money for housing, transit, and healthcare transfers—all from some of the largest and most under-taxed companies in the world."
Walker also wrote that the digital service tax could serve as a counterweight to the so-called "revenge tax" provision in Trump's sprawling domestic tax and spending bill.
Section 899, called "Enforcement of Remedies Against Unfair Foreign Taxes," would "increase withholding taxes for non-resident individuals and companies from countries that the U.S. believes have imposed discriminatory or unfair taxes," according to CBC. The digital services tax is one of the taxes the Trump administration believes is discriminatory.
"If 'elbows up' is going to be more than just a slogan, Canada can't cave to pressure when Donald Trump throws his weight around," wrote Walker, invoking the Canadian rallying cry in the face of American antagonism when it comes to trade.
"But this slogan also means the Carney government has to make sure it is working on behalf of everyday Canadians—not just the ultra-rich and big corporations that are only 'Canadian' when it's convenient," Walker wrote.
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