00:00Yes, small victories. And I just want to let everyone know this is the third edition of Trump's Tariff Liberation Day.
00:08As we know, Vicky, it was postponed a couple of times ahead of this.
00:13But let's just focus in on Canada slightly.
00:16Trump has linked the tariff hike on Canada to fentanyl smuggling, even though Canada accounts for just 1% of U.S. fentanyl imports.
00:25And this comes despite an earlier exemption under the trade deal.
00:29How common is it for trade policy to actually be used in this way?
00:34And what does it say about the reliability of trade agreements under Trump's economic agenda, which we know is protectionist?
00:43Well, we do know that trade and sanctions particularly, but also tariffs, have been used as a political measure.
00:49I mean, after all, there are loads and loads of sanctions against Russia right now.
00:53And they have been increased, if anything.
00:55There are now going to be extra tariffs on goods imported into the U.S. by countries that are dealing directly with Russia.
01:03So, for example, this is exactly what's happening with India, which has suddenly seen tariffs to the U.S. go up very significantly.
01:10With Canada, yes, you're quite right.
01:12A lot of the fentanyl trade is the issue.
01:14And Canada was meant, and this is why there was a pause for a while, was meant to have done something in terms of drug trafficking across its borders.
01:22President Trump thinks they haven't done so.
01:24It is possible that he's also reacting to the fact that Canada has said they're going to recognize the Palestinian states in the autumn.
01:32Remains to be seen whether that happens.
01:34There's lots of conditions attached.
01:36So it could be that.
01:37But I think it is interesting.
01:37You mentioned the trade deal that existed already, and you're absolutely right.
01:41Some 90 percent of the exports to the U.S. going from Canada are going to be exempt completely because or at least they're going to have the tariffs that had been agreed at that time.
01:50So they will still fall under the agreement that was made in terms of the U.S.-Canada-Mexico agreement, which, as you remember, replaced NAFTA, which was the agreement that was there before, which was changed to improve a little bit the position of the U.S. in that.
02:06But the other countries accepted it, and that's been going on for some time.
02:09So we've got to bear in mind we hear those figures, very high tariffs that don't apply across all products.
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