President Donald Trump’s economic adviser Kevin Hassett said that Canadian officials have “misunderstood” the tariffs proposed by the Trump administration on Canada, Mexico, and China as being part of a broader “trade war.”
“The good news is that in our conversations over the weekend, one of the things we’ve noticed is that Mexicans are very, very serious about doing what President Trump said,” Hassett, the director of the White House’s National Economic Council, said on CNBC on Monday.
His comment came before Mexican President Claudia Sheinbaum and Trump held a call on Monday that led to negotiations and both announcing that he would delay 25 percent tariffs on her country’s goods for one month. Trump is slated to speak to Canadian Prime Minister Justin Trudeau later today.
But, Hassett said, “Canadians appear to have misunderstood the plain language of the executive order and they’re interpreting it as a trade war.”
When asked if Trump’s policies will create more inflation, Hassett said one needs to look at all of the president’s policies together.
“I think this is going to be one of the biggest supply-side positive shocks that we’ve ever seen,” he said.
On Sunday, when asked what Canada and Mexico must do to lift the 25 percent tariffs, Trump told reporters that both have to “balance out their trade” with the United States, adding that they also have to “stop people from pouring into our country” and that they need to halt fentanyl trafficking.
“And that includes China,” said Trump, who announced an additional 10 percent tariff on Chinese goods, bringing it to 25 percent. Trump said that China would face the tariff because its ruling communist regime has failed to curb the production of fentanyl precursor chemicals.
Trump also stated that the tariffs against the United States’ three largest trading partners, which take effect on Tuesday, may cause Americans some short-term pain but that “long term, the United States has been ripped off by virtually every country in the world.”
The president also suggested on Sunday that the 27-nation European Union could also see duties imposed on their products. He did not say when that may happen.
In an announcement on Monday following her call with Trump, Sheinbaum pledged to send Mexican troops to the U.S.–Mexico border to stop the flow of illegal immigration into the United States, which has exploded in recent years.
“Mexico will reinforce the northern border with 10,000 members of the National Guard immediately, to stop drug trafficking from Mexico to the United States, in particular fentanyl,” Sheinbaum wrote on X. “The United States commits to work to stop the trafficking of high-powered weapons to Mexico.”
The Mexican president then said that the two neighboring countries would continue talks on security and trade before confirming the month-long pause in tariffs.
Trump also wrote on social media that he spoke Monday morning with Trudeau and would “be speaking to him again at 3:00 P.M.,” using that post to criticize Canada for being uncooperative.
“Canada doesn’t even allow U.S. Banks to open or do business there,” Trump wrote in the post. “What’s that all about? Many such things, but it’s also a DRUG WAR, and hundreds of thousands of people have died in the U.S. from drugs pouring through the Borders of Mexico and Canada.”
After Trump announced the tariffs, Trudeau on Saturday announced retaliatory tariffs on a raft of U.S. imports into Canada. Trudeau also encouraged Canadians to buy Canadian products and vacation at home rather than in the United States, saying, “We didn’t ask for this but we will not back down.”
