Canada’s Prime Minister has reached out to multiple countries as a way to attract investment to curb Canada’s slowing economy. One of the countries happens to be China and some of the talks revolve around:
- Green-energy supply chain partnerships
- Technology cooperation
- Investment in port infrastructure
This would benefit China’s want for expanded access to North America supply chains and a way around U.S. restrictions & tariffs (transshipment).
Trump heard news of this and threatened 100% tariffs on Canada upon any deal.
The fear is:
China exports goods → ships to Canada → relabels or lightly modifies → avoids U.S. tariffs by entering through NAFTA/USMCA loopholes. (Honestly rules would have to be broken In order to actually achieve this though. That would really sour U.S. & Canada relations.)
I did some searching around to see what the Supreme Court ruling can do to this threat. There’s 3 scenarios that can play out:
- Courts rule the president cannot use emergency powers (like IEEPA or an expansive reading of 232) without clear congressional authorization. In this scenario the 100% tariff threats on Canada won’t uphold without the authorization of congress.
- Courts strike down tariffs as “procedurally” improper. Then the threats could temporarily be blocked but could be reissued after fixing procedure. This just delays them longer.
- Courts Rule narrowly (like the tariffs were illegal as applied to China or based on China specific facts due to inconsistencies).
In order for them to hold up in this case then Canada would need to be seen as a security threat (which this has some merit to it… but is seen to be legally WEAK) and not just be based on the “association” with China side of the argument.
Interesting times!!!