The United States has escalated its trade enforcement action against Canada. They have imposed a 10 percent tariff on softwood lumber and a whopping 25 percent tariff on wooden furniture. In fact, the U.S. has now doubled tariffs on specific Canadian products to 50 percent. This action changes the trade landscape between the two countries in a very meaningful way. TREATY negotiations between the two federal governments—which have largely been led by Canada’s Ambassador to the United States, Kirsten Hillman—continue. She has worked closely with U.S. Trade Representative Jamieson Greer and his staff to pursue relief from these tariffs.
Just last month, former President Donald Trump increased steel and aluminum tariffs to a staggering 50 percent. To say the least, this unprecedented step has raised alarm among Canadian leaders over the potential damage to vital sectors. In fact, nearly 100 percent of American aluminum imports are from our neighbor to the north, Canada. Consequently, these tariffs have raised inflationary pressures on U.S. produced goods.
Dominic LeBlanc, Canada’s Minister of Intergovernmental Affairs, to pursue special tariff arrangements with the U.S. For these types of deals, his goal is to target underserved sectors. He wants to finalize things before the formal review of the Canada-United States-Mexico Agreement (CUSMA) starts early next year.
“Supply management is not a subject of negotiation with the Americans. It will not be, it is not or will never be on a negotiating table as we look at a review of the CUSMA agreement,” – Dominic LeBlanc
Despite these efforts, challenges persist. Conservative MP Adam Chambers criticized LeBlanc’s recent exchanges with U.S. senators, suggesting that they indicate minimal progress regarding tariff negotiations. As the deadline approached, Chambers raised alarm over what seemed to be a standstill in negotiations.
“You’re in a really tough spot. You’re negotiating with a country that seems to keep moving the goalposts and your boss keeps making promises that he seems to not be able to deliver upon,” – Adam Chambers
Even Conservative Leader Pierre Poilievre expressed these concerns. Overall, he said, after almost two years, Prime Minister Justin Trudeau has not succeeded in de-escalating the U.S. tariff war, nor has he brought home any real victories in trade efforts with other countries.
“It has been a gigantic bait-and-switch. We were sold this brilliant negotiator. Where is it?” – Pierre Poilievre
Those are the discussions today, the search for an off-ramp from Trump’s tariffs that would benefit key Canadian sectors. As negotiations go on, LeBlanc is hopeful but cautious, realizing that diplomacy can be a fickle beast.
“Time will tell us if my optimism is misplaced,” – Dominic LeBlanc
As part of the victory lap, he underscored just how important Canadian aluminum is for the U.S. market. Tariffs increase inflation for U.S.-manufactured vehicles, further impacting companies such as Ford, he discussed.
“If you’re the CEO of Ford Motors and all of your F-150 and 250 trucks are made with Canadian aluminum, imported into the manufacturing facilities in the United States, it’s an inflationary pressure on those trucks. That’s just one example amongst others,” – Dominic LeBlanc
LeBlanc’s comments highlight the complexities of navigating trade relations with a partner that has shown a willingness to modify negotiations frequently. He expressed frustration at not being able to say when a deal should be expected.
“I have lost the illusion we should predict, in precise time, when we may get to an agreement,” – Dominic LeBlanc
As Canada prepares for the impending review of CUSMA, ongoing negotiations regarding tariffs remain essential for stabilizing trade relations with the U.S. The result of these negotiations will have lasting and monumental effects on the Canadian economy and its pillar industries.
