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Prime ministers

Canada-U.S. Trade Talks: Permanent Tariffs on Goods Loom as Negotiations Intensify

Strategic Insights

— 1 min read

Canadian Prime Minister Mark Carney has expressed skepticism about the possibility of striking a deal with President Donald Trump that would completely eliminate U.S. tariffs on Canadian goods. Carney's comments were made as trade talks between the two countries continue, with a deadline looming for the imposition of 35-per-cent tariffs on imports from Canada. The Prime Minister's remarks have significant implications for Canadian businesses and workers, who may need to adapt to a reality of permanent tariffs on U.S. goods.

Key Takeaways:

  • Prime Minister Mark Carney has acknowledged that a trade deal with the U.S. may not eliminate all tariffs, citing a lack of evidence that such an agreement is possible.
  • Talks between Canada and the U.S. will intensify ahead of the August 1 deadline for imposing 35-per-cent tariffs on imports from Canada.
  • Canada has a trade agreement with the U.S. and Mexico (USMCA) that regulates trade, but Ottawa and Washington must address sectors targeted by President Trump with tariffs or threats of tariffs.
  • International trade lawyer Lawrence Herman said any notion of free trade with the U.S. is over, citing Trump's use of tariffs and tariff threats to make deals.
  • Goldy Hyder, president of the Business Council of Canada, recommends focusing on achieving the lowest baseline tariff possible and seeking exemptions from existing tariffs.
  • Canadian agricultural producers urge Ottawa not to settle for broad-based tariffs on all goods, citing the importance of maintaining tariff-free access to the U.S. market.

Statistics:

  • 35-per-cent tariffs on imports from Canada will be imposed by the U.S. starting August 1, unless a trade deal is reached.
  • 10-per-cent baseline tariffs remain in place for Britain, despite a trade agreement with Trump in June.
  • 20-per-cent residual levy is applied in Vietnam on goods sold to the U.S.
  • 19-per-cent tariff on exports to the U.S. has been agreed upon by Indonesia.

Sources:

  • "Prime Minister Mark Carney says Canada-U.S. trade talks will 'intensify' before tariffs deadline", The Globe and Mail
  • Interviews with William Pellerin, partner at McMillan LLP's international trade group, Goldy Hyder, president of the Business Council of Canada, and Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance.

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