Authored by Molly Schwartz, Rabobank cross-asset macro strategist,
Trading PlaybooksThe advancement of one of China’s AI models, Kimi, has sharpened attention on the latest US plans to counter China’s growing AI challenge. Kimi is reportedly more powerful than several US flagship models, though not yet as powerful what lies on the frontier. However, Kimi operates at a fraction of the cost per token. That cost advantage raises the competitive threat to US AI leadership more broadly, including for other leading firms in the space, and Trump is once again taking a page out of China’s playbook by cracking down on the free market and unfettered competition. With tariffs, the US sought to limit China’s influence to bolster its own struggling manufacturing sector. Now, the more immediate question is whether Washington will do the same in an attempt to maintain its lead in the AI race…and if it will be successful.
According to Axios, “the Commerce Department last year considered adding multiple Chinese AI labs to its ‘Entity List,’ which would effectively cut off US access without a license.” The US is considering other avenues of approach as well, such as banning Chinese AI for national security reasons. But not all in the land of the free are happy with Trump’s interventionist approach to global markets. Axios reports that David Sacks said on X that “we are at a critical inflection point in AI policy,” warning that leading closed labs want the government to eliminate their open- source competition. For markets, the issue is not just who builds the best model, but whether AI becomes another front in the fragmentation of global capital, technology, and trade flows.
But protecting US AI dominance domestically may not be enough. China has made itself the manufacturing hub of the world, exporting cheap, shiny goods at a rapid pace and allowing its sphere of influence to grow throughout developing and emerging markets. As these same markets adopt the need for AI infrastructure, who are they more likely to turn to? The niche technically superior (?) and more expensive US AI models, or the cheaper Chinese alternatives that do almost as good of a job?
While the US tries to restrict China’s access to new customers in the AI market, the Houthis may be unintentionally squeezing China’s access to its existing customers in the physical goods market. The Houthis have announced that they plan to impose a sea navigation ban against the Saudis, blocking off the Bab el-Mandeb Strait, which separates the Red Sea (and the Mediterranean Sea via the Suez Canal) from the Arabian Sea.
As the flow of vessels through the Strait of Hormuz remains limited under the current escalation, additional risks to the global supply chain are the last thing global economies need. Brent crude oil opened above $90/bbl yesterday—the highest price since June 11—and diesel traded around $16/bbl—the highest price since May. Additional upward pressure on oil prices because of the Houthis only further increases the fears of a supply-side-driven inflation shock and a consequential slowdown in economic activity as consumers struggle to keep up with the cost of living.
That means fewer consumers willing and able to purchase Chinese imports. A significant part of the current energy narrative, which is also informing our energy forecasts, is that China has more oil reserves than many once thought, giving China more room to wait out the war by drawing on its reserves. Therefore, yes, disruptions to the Bab el-Mandeb Strait may have little direct impact on China’s energy supply, but Xi is unlikely to welcome the pressure they put on China’s customers.
Europe, meanwhile, remains firmly behind the curve on both AI development, and the situation in the Middle East. It is, however, seeking to build its own additional barriers to global trade as Brussels tries to enforce new sanctions on Russia. But the EU’s habit of regulating itself into irrelevance is once again making an appearance, and several member states are putting up barriers of their own against Brussels. The Financial Times reports that Greece refused to sign on to the sanctions agreement, demanding a carve-out that would allow it to continue transporting Russian LNG. Austria, France, Greece, Germany, Italy, and Portugal also came to the table with their own demands. The FT cites a diplomat saying that “around the table, the moral imperative is functioning less and less. Capitals all agree on tough rhetoric and talk of solidarity, but then it all melts away.”
Over the weekend, the World Cup was able to do what the USMCA wasn’t - bring the leaders from the US, Canada, and Mexico together. Many people (mostly economists and market-types) wondered if the three would have some trilateral conversations about trade and the ambiguous status of the USMCA. An announcement from yesterday would suggest that if those conversations did happen, they didn’t go especially well for Canada.
As highlighted earlier in this article, Trump is no stranger to trading playbooks with leaders from more centrally planned economies, and tariffs have emerged as a signature tool of this Administration. Yesterday, Trump signed three proclamations to enforce additional tariffs on Canadian goods, covering motor vehicles, alcoholic beverages, and dairy. These proclamations enforce 50% tariffs across several product lines “ranging from wine to hockey sticks to cement” by leveraging Section 388 of the Tariff Act of 1930. Bloomberg notes that Section 338 has never been used by a President to impose tariffs. As a major distinction from previous tariffs we have seen the Trump Administration enforce on Canadian and Mexican goods, these explicitly “apply to all covered goods regardless of whether a good originates under the USMCA.” They are currently scheduled to take effect in 30 days.
Just because proclamations are signed does not mean that these tariffs will come to fruition, or that even if they do come to fruition, they will be long-lasting. This is not the first time the Trump Administration has leveraged tariffs as a negotiating tool, and then dampened them once demands were met. Given the USTR National Trade Estimate Report on Foreign Trade Barriers, issues involving the dairy, alcohol, and vehicles were always bound to come to the forefront in the USMCA negotiations. These tariffs likely serve as an intended message to Canada that the US wants to “even out the playing field” and will not take no for an answer.
The next step is for Ottawa to negotiate with the US before these tariffs come into effect, or, forbid, try to call Washington’s bluff.
Tyler Durden Tue, 07/21/2026 - 12:40Customs officers spent three days building a border examination for the man at the center of the COVID origins fight - until Biden's FBI put a stop to it with a single email.
On February 2, 2021, a national targeting security specialist at U.S. Customs and Border Protection's National Targeting Center circulated a referral to colleagues across the agency. The subject was Peter Daszak, president of EcoHealth Alliance, scheduled to land at John F. Kennedy International Airport three days later aboard Qatar Airways flight 701 from Doha, arriving 2:25 p.m. He was returning from the World Health Organization's mission to Wuhan investigating the origins of SARS-CoV-2.
The referral asked that Daszak be considered for a Tactical Terrorism Response Team examination - a secondary inspection that can include questioning and a review of electronic devices. Which, now we know, never happened.
Senator Rand Paul, chairman of the Senate Homeland Security and Governmental Affairs Committee, released the underlying records Monday. They show CBP flagged Daszak as "an extremely high person of interest," built out a formal targeting event, and then stood down two days before his flight at the request of the FBI's New York Field Office.
Rand Paul releases docs that reveal FBI halted border inspection of virus researcher over Wuhan lab links | Louis Casiano, Fox News
Agents with U.S. Customs and Border Protection (CBP) were preparing to question a British zoologist and disease ecology expert upon his return to… pic.twitter.com/e6IouRls9Q
According to the materials, officers noted Daszak's affiliation with Zhengli Shi - the WIV virologist known as "Bat Woman" - and that EcoHealth and Daszak had been working with her for more than fifteen years. They listed him as principal investigator on two NIH National Institute of Allergy and Infectious Diseases grants: 1U01AI151797-01, "Understanding Risk of Zoonotic Viruses Emergence in EID Hotspots of Southeast Asia," and 2R01AI110964-06, "Understanding the Risk of Bat Coronavirus Emergence," running June 2014 through June 2024. A search of the latter grant, the officers wrote, returned 19 publications, many authored by Shi - who listed the grant on her own resume despite not appearing as a principal investigator on it.
Peter Daszak and Zhengli Shi clinking glasses during their humanized bat covid researchThe assessment that has drawn the most attention is blunter: "Much of the funding DASZAK receives is put towards gain of function research." The officers defined the term in the document itself as experimentation aiming to increase a pathogen's transmissibility or virulence.
They also flagged EcoHealth's contracts with the Department of Homeland Security's Chemical and Biological Threat Division, noting that much of what the organization studied was likely subject to nondisclosure agreements or export controls - a live concern for someone crossing a border. And they noted NIH had publicly asked Daszak to retrieve the original type-specimen WIV used for genetic analysis and return it to the United States, along with explaining aspects of the collaboration including cell phone data.
The Questions They Planned To AskThe request section reads like a deposition outline. Why was Daszak chosen for the WHO team? Where in China did he go, and where did he stay? Did the team visit the WIV - and if so, which areas did it inspect, and whom did it meet? Did it visit the Chinese Center for Disease Control? Did it meet any other Chinese government officials?
Then the physical questions. Did Daszak collect biological samples during the trip? Was he traveling with any? Had he mailed samples back to the United States? Had he taken materials with him to China? Had he maintained contact with anyone at the WIV, and if so, how often and about what?
The final line asks about the purpose of separate travel between January 4 and January 7, 2021 - a trip the documents do not otherwise explain.
'Please Disregard Request For Inspection'On February 4 at 12:16 p.m., a CBP deputy chief officer serving as the agency's Joint Terrorism Task Force liaison sent a message to a long list of recipients, the addresses now redacted. It was brief. "Please be advised FBI New York requested we do not stop the subject below."
The subject line of the referral chain was amended to read "DISREGARD." A follow-up instructed colleagues to disregard the inspection request and said the subject would be routed elsewhere for any requests. The National Targeting Center's own summary of the episode closes the matter in eight words: "FBI requested not to stop subject. No further NTC action."
The documents do not say why. No rationale appears anywhere in the release. An FBI request of this kind can reflect an active investigation the bureau does not want disturbed, an interest in protecting sources or methods, or a separate arrangement already in place. None of that is in the record, and Paul's release does not claim to know. Fox News reported that the bureau did not respond to its request for comment.
Nor are these classified records, despite some coverage describing them that way. The pages carry a Law Enforcement Sensitive / For Official Use Only caveat - restricted handling, but unclassified.
The Man In The Targeting PackageDaszak was then president of EcoHealth Alliance, the New York nonprofit that routed NIH funding to bat coronavirus work at the Wuhan Institute of Virology, and one of ten members of the WHO team whose selection drew criticism at the time given his financial and professional entanglement with the lab the mission was meant to examine.
What the WHO team's critics did not know at the time was the full contents of a proposal Daszak had assembled three years earlier. In March 2018, EcoHealth submitted a $14.2 million bid to DARPA titled "Defusing the Threat of Bat-borne Coronaviruses" - DEFUSE - with the Wuhan Institute of Virology, Ralph Baric's lab at UNC-Chapel Hill, and several other partners. The proposal set out plans to build full-length infectious clones of bat SARS-related coronaviruses, to screen for receptor binding domains suited to human cells, and to insert proteolytic cleavage sites into bat coronavirus spike proteins, testing the results in mice engineered to carry human receptors. Early drafts later obtained under FOIA show the authors were specifically interested in furin cleavage sites at the S1/S2 junction. DARPA rejected the bid, citing in part gain-of-function concerns. The following year, a novel bat-derived coronavirus carrying a furin cleavage site at precisely that junction began infecting people in Wuhan - a feature absent from every closely related sarbecovirus catalogued to date.
DEFUSE never officially became public through Daszak. It surfaced in September 2021, when the online research group DRASTIC obtained leaked copies and The Intercept published an account - eight months after the WHO mission he sat on had returned from Wuhan, and seven months after CBP's targeting package was quietly shelved. Daszak's defense has been consistent and narrow: "The DARPA proposal was not funded. Therefore, the work was not done. Simple." EcoHealth has argued the project required a budget and multi-lab coordination it never received, so the experiments could not have been performed. The counter-case is equally specific: internal drafts show Daszak advising Baric and Shi that he wanted the proposal to emphasize the American side of the work to keep DARPA "comfortable," even though WIV would do much of it - and separately, virologist Kristian Andersen, a prominent advocate of natural origin, has argued the formal proposal specified cleavage sites at a different position on the spike than the one SARS-CoV-2 carries. None of that was disclosed while Daszak was helping investigate the lab in question.
What followed is now well documented. After the House Select Subcommittee on the Coronavirus Pandemic found EcoHealth had failed to report gain-of-function experiments at WIV, ignored oversight requests, and filed a required research report two years late, HHS suspended the organization's funding in May 2024 and opened debarment proceedings. In January 2025 it formally debarred both EcoHealth and Daszak personally for five years. EcoHealth terminated his employment effective January 6, 2025, and the organization is now defunct. Daszak has never been charged with a crime, has consistently denied wrongdoing, and has argued the investigations were politically driven. He now heads Nature Health Global, a nonprofit working on ecological research and pandemic prevention.
The intelligence picture also moved. The FBI assessed with moderate confidence that a laboratory incident was the likely origin; the Department of Energy reached the same conclusion with low confidence. Last year the White House published a comprehensive origins report naming a lab-related incident involving gain-of-function research as the most likely explanation.
The Reading Room - And What Comes Next Week"They told the public a COVID lab leak 'wasn't plausible,'" Paul wrote on X. "Their own private messages say otherwise. Today I'm launching The Reading Room where the public can review records related to my ongoing investigation - not just conclusions but the actual documents." He added: "This isn't the whole story. It's the start of one." The archive sits at paul.senate.gov/readingroom and will be updated on a rolling basis.
🧵They told the public a COVID lab leak “wasn’t plausible.” Their own private messages say otherwise. Today I’m launching The Reading Room where the public can review records related to my ongoing investigation – not just conclusions but the actual documents.
— Senator Rand Paul (@SenRandPaul) July 20, 2026The timing is not incidental. As Just The News noted, the documents landed just over a week before Anthony Fauci is scheduled to testify before Paul's committee on whether he misled Congress about NIAID funding for gain-of-function work at the Wuhan Institute of Virology.
One detail in the file is easy to miss. The email chain was forwarded internally on September 3, 2025 - four and a half years after the fact, and presumably in response to the committee's records demand. Whatever the FBI's reason for calling off the stop in February 2021, it stayed inside CBP's system until a Senate chairman went looking for it.
Tyler Durden Tue, 07/21/2026 - 12:20* * *
Trump Gives Wide-Ranging Comments on Iran: Doesn't Want to Talk, "We've Been Nice"President Trump issued a series of big claims to reporters in the Oval Office on Tuesday. For starters he asserted that Iran wants to "desperately" meet but said "we" have no interest, and that the US military is not finished at all with Iran, and so there's no interest in talking at the moment.
And amid polls that show the war is increasingly unpopular among American voters, he stated that Iran is "probably" trying to hurt his and his Republican Party's chances in the upcoming congressional elections in November by seeking to control Strait of Hormuz, and with the latest attacks on international shipping. "I'm just going to do the right thing," Trump claimed, before saying that "The election, I can’t think about that having to do with this. I think people are very impressed."
He also revisited the Obama-era JCPOA, saying if the US hadn't "terminated the nuclear deal" then "you wouldn’t have Israel right now because they would have had a nuclear weapon years ago." He added that "if we didn’t do the B2 bombers knocking out the nuclear sites a year ago, one of the first things we did early in the administration, they [Iran] would have a nuclear weapon, and you wouldn’t have Israel." Trump continued, "And in my opinion, you wouldn’t have various other countries in the Middle East [as] they would have been terminated, extinguished."
He continued to be pressed on what the 'plan' and end goal is, and what the stopping and exit point might be. The president's response:
Reporter: There are no signs that Iran is ready to stop fighting. So, what is the plan?
Trump: How would you know? How would you know if there are no signs? Why?
Why do you know something that I don’t know?
You don’t know what dialogue is taking place behind the scenes. They… pic.twitter.com/xxAObQnkuk
Another big threat and warning came when Trump declared that "Iran hasn't seen anything yet" as "we've been nice" so far. Below is a quick rundown of some key statements from the fresh press interaction:
Israel has meanwhile been alleging that Iran is concentrating its nuclear program at highly fortified Pickaxe Mountain. Trump in the comments suggested the US military will take direct aim at the underground complex:
Trump says the U.S. will be hitting Pickaxe mountain in Iran "pretty soon very heavily and there is nothing they can do about it"
This is nothing but a lie to continue the war. https://t.co/DCwFew6SB1
— Brett Erickson (@BrettErickson28) July 21, 2026'Slip through Jordan'... where American troops were killed:
Trump on Iran:
We are degrading them at levels that nobody thought was possible. They’re being degraded really seriously.
They did slip something through in Jordan. pic.twitter.com/Dprd7zOjtP
A quick review of just how fast the situation is ratcheting over the past days alone...
Many signs point to major U.S. escalation in Iran:
1. Benjamin Netanyahu is pushing Trump to widen / intensify U.S. strikes.
2. The State Department warned of coming escalation in the region.
3. Trump says he'll hit Pickaxe Mountain, which would require a major bombing…
The just-declared (as of Monday) Houthi blockade on Saudi maritime shipping has already begun to witness ill-effects, as reports emerge of two oil tankers having made U-turns while initially en route toward the Suez Canal. The reports say their crews received threats from Houthi militants in Yemen. The emerging details:
Two oil tankers which loaded Saudi crude for China and India made U-turns in the Red Sea and headed toward the Suez following a warning from Yemen’s Houthi militia.
...The group, in an email sent to shipping companies, warned them not to load or discharge cargo at Saudi Arabian ports and said such activity may result in being targeted “in any location”.
Dollar and yields spiking as oil rises.... West Texas Intermediate (WTI) has reached six-week highs on Tuesday.
MAP OF THE DAY: Starting to see some oil tankers either U-turning or slowing down on their approach to the Bab El-Mandeb Strait (near Yemen). First sign that the Houthi treat is having an impact -- HOWEVER, many otherS are still going ahead from the Gulf of Aden into the Red Sea pic.twitter.com/7aYhuLz5b9
— Javier Blas (@JavierBlas) July 21, 2026Iran state media taking note of inflicting pain...
The price of Brent crude oil has crossed the $91 per barrel mark amid rising tensions regarding US escalations in the West Asia region.
Follow: https://t.co/h0eMpifVIe pic.twitter.com/oOuuh20WMF
Amid a spate of fresh attacks on Gulf states, the IRGC claimed its cruise missiles destroyed Amazon's central data infrastructure in Bahrain and also hit US air defense systems. Bahraini, US and Amazon officials issued no response in the immediate aftermath.
The IRGC said its Aerospace Force targeted and "destroyed" the central data infrastructure hub in Bahrain using several cruise missiles. It further stated that "US air defense systems and radar installations in the Bahraini areas of Muharraq and Riffa were also targeted" in the attack.
If accurate this highlights yet again that billions of dollars worth of infrastructure is going up in flames in the Gulf, and that defense against missiles and drones has been waning
Kuwait Water Desalination & Power Plants Attacked for 2nd Consecutive DayFor a second consecutive day, Kuwait is reporting attacks on power-generation and water-desalination plants. The fresh assault caused fires and disrupted electricity generation, amid an emergency response and efforts begin restoring affected units.
Further attacks on Bahrain, Kuwait, and Jordan are also being reported, as well as new IRGC strikes on foreign tankers seeking 'unauthorized' transit of the Strait of Hormuz. According to some latest via Al Jazeera:
On Tuesday Kuwait has confirmed it is dealing with inbound Iranian drone and missile attacks yet again, also with sirens continuing to sound in Bahrain.
Iran Seeks To Hold Hormuz Leverage 'At All Costs'Despite daily US saturation strikes on Iran, and in turn Iran's daily attacks on Gulf states, nothing has really changed in what seems a stalemated situation and quagmire.
Amin Saikal, emeritus professor at Australian National University, has described that "Both sides have really been trying to inflict heavy damage on each other, and they’ve come really to a point of saturation in many ways." He continued, "Logically, that should really lead them to negotiation. But of course, that is not really happening at the moment simply because the United States wants to gain control over the Strait of Hormuz, and that’s something the Iranians will never give up."
Saikal called Hormuz “a reward” for Tehran, while pointing out that "Because of this unprovoked war, the Iranians have gained this leverage, and they want to retain it at all costs."
Still, President Trump is warning that Iran will pay "many times over" for the deaths of American soldiers, and has said he gave his Pentagon leaders directives for carrying this out.
10th Strait Day of EscalationThe tit-for-tat escalation between the US and Iran entered its tenth day as another tanker was struck in the Strait of Hormuz. Meanwhile, the Iran-backed Houthis threatened shipping at a second strategic chokepoint in the southern Red Sea.
US Central Command launched strikes targeting Iranian command and control centers, missile and drone launch sites, and air defenses to "further degrade Iranian military capabilities used to attack commercial shipping in the Strait of Hormuz."
Pvt. Isabella Gonzales, 19, of Carrollton, Texas, was killed by an Iranian attack on Jordan on July 17, 2026
President Trump wrote on Truth Social, "Every time Iran kills an American soldier, they will pay for that killing many times over!"
Still, Pakistan and Qatar are urging both sides to return to their positions before the latest escalation began on July 9. Iran says it remains open to diplomacy but will not negotiate under attack, while the Trump team has signaled that strikes will continue until Tehran stops attacking tankers and bulk carriers in the critical waterway. Reuters reported that mediators have proposed a 10-day ceasefire.
Hormuz Traffic at Near Standstill as Another Tanker StruckShipping flows in the Hormuz have all but slowed, according to new Bloomberg data. As of Tuesday morning, just six vessels have transited the critical waterway. The data doesn't account for ships turning off transponders.
Bloomberg reports that Iran struck another tanker in the strait:
Visible traffic through Hormuz came to a near standstill on Monday following Iranian attacks on vessels over the weekend.
An oil supertanker called the Acheloos and a smaller fuel tanker were both struck in the waterway, according to Dynacom Tankers Management Ltd., the ships' manager.
Early Tuesday, the UK Maritime Trade Operations said that a tanker had been struck by an unknown projectile in the strait northeast of Oman's Limah, citing multiple reports, without identifying the vessel. The notice indicates a separate attack to those on the Dynacom tankers.
The flare-up in violence sent Brent crude oil futures surging in recent weeks to over $90 a barrel, with Goldman commodity expert Daan Struyven warning on Monday that oil prices could rally to $120 if there is no de-escalation.
"Escalation in the Middle East and the decline in estimated Persian Gulf flows to below 45% of pre-war levels have pushed oil prices back up," Struyven said in a note to clients.
Related:
US Consumers Feeling the PinchMeanwhile, US consumers are feeling the pinch again at the pump, with the national average for regular 87-octane gasoline topping $4 a gallon once more. This is the politically sensitive line in the sand at which the Trump administration takes notice and consumer behavior begins to shift down at convenience stores, gas stations, and QSRs (quick-service restaurants).
Pattern of Pentagon Concealing US Casualties: NYTThe New York Times reported Monday that the Pentagon withheld information that US troops had been injured in Iranian attacks on Jordan in the week before the missile strikes that killed at least two US soldiers and left one missing.
"Those attacks injured dozens of U.S. service members and damaged several helicopters, according to several U.S. officials, who spoke on the condition of anonymity to discuss operational matters," the report says. "But the Pentagon did not disclose the earlier strikes, nor the casualties and damage they inflicted."
The slain soldiers in Jordan were reportedly staying in flimsy prefabricated housing at the time of the deadly ballistic missile attack. US officials described a situation that suggests American forces were essentially sitting ducks, and that not enough has been done to protect the Pentagon's Mideast bases.
NYT painted a picture of a US admin pattern of concealing the true extent of American casualties. "In statements after airstrikes against Iranian military sites last week, U.S. Central Command said it was retaliating for Iran’s attacks against commercial ships transiting the Strait of Hormuz, never mentioning Iran’s strikes on bases in the region, including in Jordan," it noted.
Overnight Headlinescourtesy of Bloomberg...
US-Iran Tit-For-Tat
Diplomacy & Ceasefire Efforts
Regional Risks
Energy & Market Impact
President Donald Trump signed three proclamations Monday imposing an additional 50 percent tariff on a broad list of Canadian goods, accusing Canada of discriminating against American dairy, alcohol, and auto exports. The White House said the president was acting to hold Canada accountable for what it called "continued discrimination" against U.S. commerce, according to The Epoch Times. The duties take effect in 30 days.
American whiskey is seen on the shelves of a SAQ liquor store in Montreal on March 4, 2025. The Canadian Press/Christinne MuschiThis is not a blanket levy on everything crossing the northern border, and what got left out is as revealing as what got hit. Oil - of which Canada is the largest foreign supplier to American refineries - is exempt. So is potash, the fertilizer input U.S. farmers depend on and cannot readily source elsewhere. Fish and critical minerals are out. So are goods already carrying national-security tariffs, including steel and many auto parts, per the White House fact sheet.
What remains is still enormous. The covered list runs from milk and cream to alcohol, hockey equipment, food products, construction materials, clothing, furniture, technology, and car parts, ABC News reported from a senior administration official's briefing. That official put the range at "wine to hockey sticks to cement." The automobile proclamation alone lists 18 pages of eligible goods.
Rather than the emergency powers that underpinned earlier rounds, these proclamations invoke Section 338 of the Tariff Act of 1930 - a Depression-era provision allowing duties of up to 50 percent against countries found to discriminate against American commerce. It has sat essentially unused for decades. Reporting on the action notes the statute permits exactly the 50 percent ceiling the administration went to, and that reaching for a dormant 1930 authority is likely to draw court challenges quickly. The 30-day runway before the tariffs bite is the window in which those challenges would be filed.
The duties apply whether or not the goods previously qualified for exemption under the U.S.-Mexico-Canada Agreement. Trump's own renegotiated North American trade deal, in other words, will not shield Canadian exporters from this round.
As justification, the administration official pointed to Canadian provincial conduct on alcohol: all but two provinces and territories have halted the purchase, distribution, or retailing of American alcoholic beverages while imposing no comparable restrictions on other countries. The official also cited Canadian tariffs on some American cars and the long-running dairy quota dispute, framing the action as "leveling the playing field for crucial American exports."
Canada is one of only two countries - China being the other - to have retaliated against Trump's earlier tariffs, and the administration has said repeatedly it intends to make an example of both. The Associated Press notes the move risks a fresh round of economic disruption, with higher consumer prices and further deterioration in a relationship that was among Washington's closest before this term.
Tyler Durden Tue, 07/21/2026 - 12:00