During a briefing with journalists on his way to work before a remote cabinet consultation, Premier Mark Carney projected that trade discussions ‘will escalate’ prior to the deadline on August 1st. Prime Minister Mark Carney expressed skepticism about the feasibility of securing a deal with President Donald Trump that would eradicate all U.S. tariffs on Canadian products. It is the initial instance where the Premier acknowledged the likely continuation of some of Mr. Trump’s protective tariffs in any agreement aimed at extinguishing the trade dispute between Canada and the U.S.
Both countries, Canada and the U.S., are currently engaged in resolving their four-month-long trade argument wherein each party has imposed its own tariffs, initiated by Mr. Trump in March. Last week, President Trump announced plans to impose a 35% tariff on imported goods from Canada beginning August 1st, thereby intensifying the strain on negotiations.
As he entered his office before a virtual cabinet meeting on Tuesday, Premier Carney hinted at an increase in the intensity of trade talks, well ahead of the deadline on the first day of August. Expressing his thoughts in French, Mr. Carney emphasized his skepticism about reaching a deal that completely removes all tariffs.
He expressed that currently, there’s scarce evidence of any agreements or deals with the U.S. that has allowed any nation or jurisdiction to enjoy tariff-free commerce. This sentiment was echoed by William Pellerin, a partner with the international trade team at McMillan LLP, who suggested that Mr. Carney might be creating realistic expectations about what Canadian people and businesses should hope to achieve from a trade deal with Trump.
Mr. Pellerin expressed concerns that he and his clients must now brace for the potential permanence of U.S. tariffs. He added that any Canadian business that opted for a short-term relapse to ‘absorb the tariffs rather than transferring them’ to U.S. customers may need to reconsider this strategy.
The ongoing ten-percent base tariffs on goods sold to the U.S., despite a trade agreement with Mr. Trump in June, continues to plague the U.K. Similarly, Vietnam concluded its White House negotiations with a remaining 20-percent levy on goods it sells to the U.S.
As per Mr. Carney, Canada already has a trade pact with the United States and Mexico – the USMCA – that manages trade, but Ottawa and Washington still need to tackle industries that Mr. Trump has aimed at with tariffs or tariff threats.
He stressed the importance of addressing the issues in sectors such as automotive steel, aluminum, pharmaceuticals, and others. He pointed out the necessity to ‘stabilize the Canadian situation’. Premier Carney asserted that the average Canadian ‘needs to acknowledge the seismic shift in the international business environment’ primarily due to Mr. Trump.
He stated, ‘Our focus will remain on what is primarily within our power, and that is the development of a robust Canadian economy.’ He underscored that this encompasses reinforcing the steel industry, ‘a robust car industry in Canada, and the strength of the Canadian aluminum industry, copper industry, and more.’
Mr. Carney emphasized that his administration would concentrate its efforts on what it can execute to realize these objectives.