For several reasons, Canada is especially well positioned to capitalize on a disastrous new executive order signed by President Donald Trump. Specifically, this order imposes a 35 percent tariff on all goods that do not comply with CUSMA. This executive order raises the tariffs on all Canadian steel, aluminum and cars. Consequently, it deepens the strife in the ongoing trade war between the two nations.
Speaking for the government of Canada, Intergovernmental Affairs Minister Dominic LeBlanc expressed disappointment in the newly-reimposed tariffs. He said the conversations that took place in Washington last week helped shed important light on the fears Americans have about trade. LeBlanc described these discussions as “informative, constructive and cordial,” suggesting that there is still a desire to pursue further bargaining with the Trump administration.
Impacts of New Tariffs
The new tariffs will especially impact semi-finished copper products, which will be hit by a breathtaking 50 percent tariff. LeBlanc drove home an essential point. As much as 90 percent of Canadian goods could avoid being subjected to higher tariffs since they meet CUSMA. To the extent that such compliance exists, it would mitigate the exposure of Canadian exporters to potential financial liability.
Devolution deal supporter and former Bank of England Governor Mark Carney said he was saddened at the rising responsibilities. He took this action in light of those developments. We know that, by seeking an agreement that works for Canadians first, Canada can lead the way. He announced that Ottawa will settle for nothing less than an agreement. That deal needs to be in the best interests of Canadians.
Ongoing Negotiations
LeBlanc has taken his show on the road with notable fervor to advance his cause with Canadian and U.S. lawmakers. He stood by the idea that Canada is still “very optimistic” about getting a deal done that would benefit both countries’ economies. His meetings in DC were about building bridges, and they were truly fruitful. He is very committed to moving in the direction of an agreement.
Carney was generally positive but warned against getting hopes up too high. He pointed to the difficulty of completing an agreement by Friday as some had previously expected. Yet these negotiations are heavy lifting. They need a good deal that really meets the interests of Canadians, which will again prove to be time-consuming negotiation.
“We’re prepared to stick around and do the work needed.” – Dominic LeBlanc
Future of Canada-U.S. Trade Relations
Canada wants to ensure it continues a strong, positive trading relationship with its southern neighbor. Simultaneously, it threads the needle through the headwinds that tariffs have created. These are important steps that both LeBlanc and Carney are taking to protect Canadian interests during what is expected to be a fractious negotiation process.
As the situation develops, Canada’s government continues to monitor its trade relationship with the U.S., aiming for a resolution that reflects mutual respect and benefits both economies involved. As states and sectors continue to negotiate and talk with one another, there is hope that a positive outcome can be found amid these fresh trade headaches.
