Source: iA Global Asset Management
President Trump’s Liberation Day has arrived, and the scenario presented is by far the least pessimistic for Canada. After several weeks of speculation, the United States announced its reciprocal tariff plan, promising to usher in a new golden age for the American people. President Donald Trump implemented a baseline tariff of 10%, which was lower than expected. That being said, the rates applied to several countries differed significantly: 34% for China, 32% for Taiwan, 26% for India, 25% for Korea, 24% for Japan, 20% for the European Union and 10% for the United Kingdom.
As a result of these actions, the average U.S. net effective tariff rate has shot up from 2.5% to more than 20% in the biggest tariff shock since the 1930s and a significant shift away from the post-World War II trend of globalization and international trade cooperation. Owing to a surprise exemption for USMCA-covered goods, Canada and Mexico were not included in the reciprocal tariff regime, however.
