To address the high tariff measures of the United States, Canada originally planned to impose a 25% tariff on electricity in certain U.S. states, which sparked strong backlash from the United States. In an interview on 3/12, U.S. Commerce Secretary Howard Lutnick stated that after President Donald Trump learned of this news this morning, he immediately posted a counterattack, strongly demanding that Canada withdraw this measure, and successfully got Canada to back down and directly cancel the additional tariff on the same day.

The tariff dispute is related to the drug problem, and Trump said he will not sit idly by

Assuming Canada really imposes an electricity tariff, it will affect the daily electricity use in Michigan, New York and Minnesota. However, after Trump found out, he immediately instructed the top officials of his own government to communicate with Canada, and finally led to the cancellation of the tariff.

However, Canada's action is because the United States recently imposed tariffs on Canadian goods. The outside world believes this is a retaliatory measure by Canada, but Lutnick emphasized that the U.S. tariff policy on Canada is mainly to crack down on drug smuggling.

Lutnick pointed out that about 75,000 Americans die from overdoses of drugs such as FENTANYL every year, and a large amount of drugs come from the Canadian border. The U.S. government believes this is a serious national security issue, so it uses trade sanctions to force Canada to more strictly control the influx of drugs. Although the two sides of the U.S. and Canada are putting pressure on each other, the tough stance of the Trump administration has forced Canada to back down and ultimately choose to withdraw the additional electricity tariff.

Steel and aluminum tariffs remain at 25%, but the 50% tariff plan is suspended

In addition to the electricity tariff, the United States originally planned to raise the tariff on Canadian steel and aluminum products to 50%, but Lutnick revealed that this plan has been cancelled, and it is still maintained at 25% currently. He stated that steel and aluminum are critical industries for U.S. national defense security and cannot rely on supplies from other countries.

In addition, Lutnick also emphasized that the United States needs to ensure the supply chain of important industries such as automobiles, pharmaceuticals, and semiconductors is produced domestically in the United States, which is also one of the reasons why the Trump administration is pushing for Reciprocal Tariffs policy.

Trump's trade war strategy, pressuring opponents to achieve U.S. interests

Regarding the trade friction between the U.S. and Canada, the outside world has questioned the inconsistent policies of the Trump administration, often adjusting tariffs in the short term, causing market unease. However, Lutnick emphasized that this is Trump's negotiation strategy to put pressure on the other party first, forcing them to compromise, and then negotiate the terms.

He gave an example that when a country "doesn't listen", Trump will use tough measures to put pressure on them, "You don't agree? Then we'll get tough, and the other party will immediately be willing to sit down and talk." Lutnick believes that traditional government negotiations often drag on without a decision, but Trump's approach can quickly reach an agreement. The case of Canada's electricity tariff this time is an example of "resolved in one day".

Manufacturing industry returns to the U.S., vowing to create a large number of blue-collar job vacancies

Another major trade policy goal of the Trump administration is to bring U.S. manufacturers back from overseas. Lutnick bluntly stated that the past North American Free Trade Agreement (NAFTA) has seriously damaged the U.S. auto industry, causing many automakers to move to Canada and Mexico, and American workers have lost their jobs, exacerbating social problems.

If your factory is moved to Canada or Mexico, your life will be ruined, then drugs, alcohol, despair, and finally suicide. And that's why Trump wants to bring these factories back. He emphasized that the Trump administration's tariff policy is to force businesses to return to the US market, increase job opportunities in US manufacturing, and create demand for high-tech blue-collar workers. Lutnick predicts that these job vacancies will have salaries ranging from $125,000 to $150,000 per year, becoming the direction of economic development in the US.

Stock market volatility, consumer confidence decline, Lutnick says Trump's return will be good

Recently, the US stock market has fluctuated significantly, with the NASDAQ index falling 14%, and the market is worried about the impact of the trade war on the economy. Lutnick refuted that this is the mess left by the Biden administration, and once TRON's policies are fully implemented, the economy will rebound. He predicts that the US will usher in a manufacturing revival, thereby narrowing the trade deficit, and ultimately causing the stock market to soar.

Regarding tax reform, Lutnick revealed that TRON's long-term plan is to exempt Americans with annual incomes below $150,000 from income tax. In addition, he suggested that the US should sell green cards, "The US issues 400,000 green cards a year, and if one is sold for $5 million, that's $2 trillion in revenue." This revenue can reduce the deficit and allow the US to lower its tax burden.

Whether TRON's policies will succeed, the founder of Bridgewater is quite worried

Overall, the economic policies of the TRON government are centered on "trade war, manufacturing repatriation, and tax cuts" in an attempt to enhance the competitiveness of the US economy. However, the uncertainty brought about by these policies has also exacerbated market volatility.

Recently, Ray Dalio, the founder of Bridgewater Associates, also warned in an interview that the economic strategy of "America First" promoted by the TRON government, which reshapes the global economic order by imposing tariffs on trade partners, not only poses risks at the economic level, but may also lead to confrontation and conflict between countries. Whether this "TRON economics" can bring long-term prosperity or will cause greater economic risks, it remains to be seen how it will be implemented in the future.

(Ray Dalio warned of the US debt crisis: the global economy may face a "shocking" change)