Trump’s Tariff Deadline Sparks Tense Standoffs with Canada, India, and Brazil

Trade tensions reach boiling point as Trump's hardline tariff ultimatum hits resistance from major economies.

Three nations dig in—who'll blink first?

Canada's polite resistance, India's strategic pushback, and Brazil's commodity-powered defiance create a geopolitical tinderbox. Meanwhile, Wall Street shrugs—because nothing boosts portfolios like good old-fashioned trade wars.

A focus on Canada — with limited economic effects for now

Trump reiterated the lack of progress with Canada Thursday morning with a Truth Social post where he brought the Middle East into the mix.

"Wow! Canada has just announced that it is backing statehood for Palestine," he wrote. "That will make it very hard for us to make a Trade Deal with them."

The post came in response to the news that Canada will join France and the United Kingdom in this largely symbolic MOVE that Trump previously brushed off.

It's the latest Trump missive and continues a string of critical comments about America's northern neighbor stretching back to the beginning of Trump's second administration.

Trump is promising to move forward with 35% tariffs there, which WOULD be a major setback in relations between the two countries but one with more limited economic effects for now.

That's because about half of goods that travel between the two countries are able to trade largely duty free thanks to the United States-Mexico-Canada Agreement (USMCA).

Story Continues Canadian Prime Minister Mark Carney and US President Donald Trump during a Group of Seven (G7) Summit in Canada in June. (LUDOVIC MARIN/POOL/AFP via Getty Images) · LUDOVIC MARIN via Getty Images

Mexico is also covered by the USMCA — and is facing 30% duties of its own Friday — but has escaped much rhetorical fire from Trump who has again and again chosen to clash with Canada.

The USMCA isn't up for formal review until next summer, giving negotiators more time to get talks back on track.

A likely tariff hike on India — but with talks ongoing

India was the focus of another overnight social media post, with Trump lumping India in with Russia as "dead economies."

It's a 180-degree turn of sorts from Trump after previously warm relations that saw the president warmly greet Indian Prime Minister Narendra Modi at the WHITE House earlier this year.

The tensions appear to stem from India's hard negotiating stance. Trump reiterated Friday morning that India's tariffs are too high in the latest sign that a deal may be a ways off in closely watched talks that have implications for Apple (AAPL) and its large iPhone manufacturing operations there.

Indian officials were in Washington for talks in recent weeks and left without a deal but also sent signals that talks are making progress and that they feel an agreement could be struck in the fall.

President Donald Trump met with Indian Prime Minister Narendra Modi at the White House on February 13. (Indian Press Information Bureau via Getty Images) · Anadolu via Getty Images

The back and forth also comes as many analysts say the heated rhetoric as of late is a way to get concessions.

"India is the latest example where Trump's escalation is a sign that a deal is imminent," wrote Raymond James analysts in a note this week, calling this a "final opportunity to gain concessions before an agreement is made."

Trump said Wednesday that talks with India continue and that he still considers Modi a friend, but for the moment he is promising 25% tariffs on the world's fourth largest economy and main regional economic counterweight to China.

Trump has also pledged unspecified additional penalties on India because of the nations consumption of Russian oil.

Trade troubles with Brazil without a clear offramp

Meanwhile, any offramp with Brazil is much less certain. Trump is promised 50% tariffs there over what he describes as a witch hunt of Jair Bolsonaro.

The former Brazilian president is facing a trial for his role in trying to overturn the results of his country's 2022 election.

President Donald Trump met with then-Brazilian President Jair Bolsonaro during a dinner at Mar-a-Lago in 2020. (JIM WATSON/AFP via Getty Images) · JIM WATSON via Getty Images

Trump moved forward with his 50% plans Wednesday with an executive order that claimed that "politically persecuting a former President of Brazil" was a key factor leading him to declare a national economic emergency and impose additional 40% tariffs — on top of existing 10% duties — but with some notable exceptions for things like orange juice and aircraft parts.

Brazil has said that Trump's demand to intervene in the trial of Bolsonaro is a nonstarter and it's unclear what else they can offer — especially given that the US has a rare trade surplus with Brazil.

Meanwhile, Trump's use of emergency powers to target Brazil has come under withering criticism with Melinda St. Louis, a trade director at the watchdog group Public Citizen, saying "it's hard to fathom a flimsier justification for a U.S. national emergency."

Reuters is reporting that Brazil is expecting that 35.9% of its US exports — by value — will be hit by a steeper 50% tariff.

All told, markets have largely shrugged off Trump's latest tariff deadline with investors apparently more focused on Big Tech earnings.

But even with Trump promising to be "done" with trade after this week, the many loose ends between America and its 3rd, 10th, and 11th largest trading partners, according to the Census Bureau, aren’t going away.

That suggests efforts to find areas of agreement are likely to continue unabated.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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