Canada’s new Trade Minister, Dominic LeBlanc, is scheduled to meet with U.S. Secretary of Commerce, Howard Lutnick. This meeting takes place as trade relations between the two countries continue to undergo pivotal changes. The meeting comes on the heels of Canada’s announcement to lift certain retaliatory tariffs on American goods, an action designed to ease tensions and foster collaboration.
Starting September 1, Canada will lift the 25 percent tariffs it imposed on a range of American goods last spring. This encompasses all sorts of goods, from oranges to booze to clothing to shoes to motorcycles to cosmetics. Canada still intends to maintain its own counter-tariffs on U.S. steel, aluminum, and automobiles. It’s the latest indication that Canada is pursuing a more careful and measured approach to trade talks.
This session is intended to provide background on the origins of the current Canada-United States-Mexico Agreement (CUSMA). Negotiated during Donald Trump’s administration, CUSMA was intended to be a replacement for the North American Free Trade Agreement or NAFTA. With the agreement still in an initial trial period, review process and re-negotiation on the horizon, initial negotiations should begin in the next few months. LeBlanc has maintained that he is in daily contact with Lutnick on these issues.
Canada’s March response was to target the very same goods, slapping a 25 percent tariff on American products. This strategic move was a direct response to U.S. trade policies. Prime Minister Mark Carney as a first step in a rapprochement with the Americans. This decision was met with a blended response from environmentalists, municipal leaders, and industry representatives from coast to coast to coast.
Donald Trump has been very happy with the tariffs in the past. He argued that America has never been more respected as evidenced by the record revenue amounts generated from duties. In fact, he called Canada’s decision to terminate some tariffs “nice.” The White House quickly jumped on this bandwagon, calling the move “long overdue.”
This new tariff amendment has received a cool reception from Canadian stakeholders. The Canadian Federation of Independent Business has previously applauded the decision as “a step in the right direction. On the other hand, Conservative Leader Pierre Poilievre slammed it as evidence that Mark Carney had begun his “capitulation and climbdown.”
LeBlanc probably worries about his upcoming repartee with Lutnick. It is entirely possible that this result will lead to more productive discussions on trade and economic cooperation between our two nations going forward.
