Countries refused special treatment could still hit back against the United States with trade barriers of their own down the road.
US President Donald Trump is seeking to impose tariffs on up to US$60 billion (RM234.2 billion) of Chinese imports and will target the technology and telecommunications sectors, a source who had discussed the issue with the White House said yesterday.
A more likely scenario is that other countries could respond with strategic tariffs and duties on other US products, according to Chad Bown, a senior fellow at the Peterson Institute for International Economics. In fact, the trade action is affected by the USA president's decision.
"Imported aluminum used to make beer cans is not a threat to national security", said Jim McGreevy, the Beer Institute's CEO.
Since then, our two economies have become increasingly more integrated - underpinned by well-established and lucrative supply chains. The bloc does impose a 10 percent levy on US vehicle imports, but the USA charges a 25 percent levy on trucks and pickups, and up to 40 percent on some clothes, she said.
In some ways, the highly integrated nature of the two economies offers Canada, in particular, a certain amount of protection or cover from USA contingency protection practices (e.g., countervailing duties, anti-dumping tariffs and emergency safeguard measures).
The U.S. economy, boosted by a $1.5 trillion tax cut that Trump signed past year, is on a solid footing and the unemployment rate of 4.1 percent is the lowest since 2000.
Most economists oppose Trump's proposed steel tariffs, along with his call for a 10 percent duty on imported aluminum. The worldwide pushback was perhaps best captured by prime minister Pierre Elliott Trudeau when he told Nixon that it was impossible for Canadian businesses to purchase USA goods if they can't sell their own products in the American marketplace.
Lankford last week joined several Republican senators who wrote to Trump voicing their concern about how the steel and aluminum tariffs could hurt this country's relationship with allies. But that would only hurt Canadian manufacturers.
Trump could then follow through with a threatened new tariff on European-made automobiles.
The aluminum tariff could also disrupt the Canada-U.S. Defense Production Sharing Agreement (DPSA), which covers trade in military-related equipment and armaments.
The import tariffs of 25 percent on steel and 10 percent on aluminum could lead to a trade war and higher inflation, the credit rating agency said in a report. "What they do need is more infrastructure spending". By not targeting this nation's chief economic rival and providing openings for it in multilateral agreements, Trump is helping to make China great again.
In 2002, when the USA implemented steel tariffs, the result was a loss of 200,000 jobs, according to a 2003 report by Trade Partnership Worldwide.
Our economy benefits when other nations' economies grow, because those countries can then afford to buy more American products, Lankford noted in The Washington Post a year ago.
The tariffs have anxious Wisconsin's Republican Governor Scott Walker, who has urged Trump to reconsider. He might not understand the basic economic implications of his most recent moves, but Trump surely gets the politics of angering his base.
Canada and the United States share the world's longest secure border, with approximately 400,000 people, and goods and services worth 2.5 billion U.S.dollars crossing daily. What worries us is the ripple effect of the global trade row. "Consumers are just beginning to see more money in their paychecks following tax reform, but those gains will soon be offset by higher prices for products ranging from canned goods to cars to electronics".