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Tariffs

Premiers Gather in Ontario to Address Trump's Tariff Threats and Trade Negotiations

Strategic Insights

— 2 min read

This week, the Canadian premiers will be meeting in Ontario to discuss the country's response to President Donald Trump's tariff threats, with a focus on safeguarding Canada's economy. The meeting comes at a time of great uncertainty, with the Trump administration pushing back a deadline for a new trade pact with Canada and threatening to impose 35-per-cent tariffs on Canadian goods outside the United States-MexicoCanada Agreement. The premiers will also receive an update from Mark Carney on the state of trade and security negotiations with the U.S.

Key Takeaways:

  • The premiers will discuss how to respond to President Trump's latest threat to impose 35-per-cent tariffs on Canadian goods outside the United States-MexicoCanada Agreement.
  • The higher tariffs are not expected to cover goods traded under USMCA or oil, gas, and potash traded outside the deal.
  • U.S. Commerce Secretary Howard Lutnick stated that USMCA will be renegotiated in a year's time, and stressed that goods under that deal remain tariff-free.
  • The Prime Minister has said that he sees little evidence that a deal can be struck with Mr. Trump that removes all U.S. tariffs on Canadian goods.
  • About 95 per cent of Canadian goods flowing into the U.S. are compliant with USMCA, but the steel and auto industries are struggling.
  • Ontario Premier Doug Ford pushed for matching tariffs dollar for dollar and Ontario believes there will need to be tariffs against steel coming from the U.S. if a deal isn't reached.
  • Other provinces aren't as supportive on countermeasures, though support the Prime Minister's efforts to date.
  • Saskatchewan Premier Scott Moe stated that the Prime Minister is "doing his level best" to engage premiers and Canadians, but has not been a fan of counter-tariffs.
  • The premiers will also discuss Indigenous concerns over a new bill to fast-track major national projects, known as Bill C-5.
  • The bill has been met with concerns from Indigenous leaders that it will circumvent their rights, while provincial leaders are seeking clarity from the Prime Minister on their role under the law.

Statistics:

  • 95 per cent of Canadian goods flowing into the U.S. are compliant with USMCA.
  • 50-per-cent and 25-per-cent levies are currently being placed on steel and auto industries, respectively.
  • 35-per-cent tariffs are being threatened on Canadian goods outside the United States-MexicoCanada Agreement.
  • 1 August has been pushed back as the new deadline for a trade deal with Canada.

Sources:

  • [Toronto, Globe and Mail]
  • [Ottawa, The Canadian Press]
  • [U.S. Commerce Secretary Howard Lutnick, CBS program Face the Nation]

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