This is an adapted excerpt from the Feb. 16 episode of “Velshi.”
On Thursday, President Donald Trump issued a new executive memo calling for “fair and reciprocal” trade tariffs on all major U.S. trading partners, a move that risks sparking a broader economic confrontation with our allies. Trump says the United States, the world’s largest economy, is being “unfairly” taken advantage of by “both friend and foe.”
In a lengthy post Saturday on his Truth Social platform, Trump defended his plan. “America has helped many Countries throughout the years, at great financial cost. It is now time that these Countries remember this, and treat us fairly — A LEVEL PLAYING FIELD FOR AMERICAN WORKERS,” the post read.
Parts are often shipped back and forth across our continental borders several times before a completed car rolls off the line.
Trump has instructed his top advisers to put forward new tariff levels for America’s trading partners across the globe. The new levels will target trading practices that the Trump administration deems unfair, including other countries’ tariffs, taxes, subsidies and exchange rates.
Treasury Secretary Scott Bessent says there is an April 1 deadline to study and devise America’s new tariffs. Trump’s commerce secretary nominee, Howard Lutnick, says the agency could be ready to implement those tariffs the very next day.
On top of these reciprocal tariffs, Trump also plans to roll out auto tariffs, which he says could also be implemented as soon as April 2. Auto tariffs would likely be especially harsh on Canada, which Trump says has “stolen” the U.S. auto industry. Trump is threatening tariffs of “50 or 100% because we don’t want their cars, we want to make the cars in Detroit.”
But what Trump is missing here is that even American cars contain foreign-made parts, with a significant amount coming from Canada and Mexico. It’s part of a deeply integrated and interconnective automotive supply chain negotiated and implemented over decades. Parts are often shipped back and forth across our continental borders several times before a completed car rolls off the line.
And it’s not only cars. Many products — like electronics, home goods, processed foods and scores more — cross back and forth between all three North American countries as they are processed from raw materials to parts to the point of sale.
With Canada, our modern trade agreements go back to the Automotive Products Trade Agreement of 1965, also known as the Canada-U.S. Auto Pact, which eliminated most tariffs on cars and parts. That later evolved into a larger deal, the 1989 Canada-United States Free Trade Agreement, which was replaced in 1994 by the North American Free Trade Agreement, or NAFTA, and included Mexico. Trump killed NAFTA in his first term, before negotiating the United States-Mexico-Canada Agreement, or USMCA, which is up for renewal in 2026. Notably, an old order on steel and aluminum imports had scores of carve-outs for countries and U.S. companies alike. The White House says that isn’t happening this time. Trump has already announced a separate 25% tariff on all goods coming from Canada and Mexico, which he imposed on Feb. 3 along with a 10% tariff on Chinese imports. Trump has cited migrants and fentanyl as justification for these economic penalties. However, only the tariffs on China were actually implemented. Canada’s and Mexico’s tariffs have been delayed for 30 days, as have the countries’ promised countermeasures. Set to compound the issue is the executive action Trump signed imposing a 25% tariff on all global steel and aluminum imports. You may recall Trump did something similar during his first term in 2018, imposing 25% tariffs on foreign steel and 10% on foreign aluminum. Notably, that old order had scores of carve-outs for countries and U.S. companies alike. The White House says that isn’t happening this time. However, like last time, these new tariffs will mainly affect U.S. allies, especially our neighbors to the north and south. Almost 40% of our total imported steel comes from Canada and Mexico. The overwhelming majority of America’s aluminum imports come from Canada as well. There are costs to starting a trade war with one of your oldest friends, strongest allies and greatest trading partners. The American people will soon feel those consequences.
Ali Velshi is the host of “Velshi,” which airs Saturdays and Sundays on MSNBC. He has been awarded the National Headliner Award for Business & Consumer Reporting for “How the Wheels Came Off,” a special on the near collapse of the American auto industry. His work on disabled workers and Chicago’s red-light camera scandal in 2016 earned him two News and Documentary Emmy Award nominations, adding to a nomination in 2010 for his terrorism coverage.
Allison Detzel is an editor/producer for MS NOW.
Marc Katz
Marc Katz is a producer for MSNBC's "Velshi."
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