Canada’s head of state, Mark Carney, has revealed plans to impose novel duties on imports of U.S. aluminium and steel, scheduled to take effect on 21 July. The commencement of these new tariffs relies on the progression of ongoing trade discussions with U.S. President Donald Trump. The two leaders had an opportunity to meet during the G7 meetings in Alberta within the week. On Thursday, Carney reaffirmed the mutual intention between America and Canada to attain a resolution through further negotiations over the next 30 days.
Carney stated, ‘The way our negotiations progress will influence how we refine our response.’ He went on to stress the imperative need for Canada to bolster its own economic resilience. The aim is to shield Canadian companies and the local workforce from the unjust American tariffs. Carney explained, ‘Our main priority is to protect the Canadian aluminium and steel producers and all the workers involved, which is why we’ll be rolling out some countermeasures specifically crafted for them.’
Carney proceeded to outline Canada’s proposed two-pronged approach. Initially, Canada will revise its extant retaliatory tariffs on American-made steel and aluminium goods on the 21st of July. The extent of the adjustment will be determined by the steps made in the superordinate agreement concerning trade with the U.S. The elevation of tariffs engages a new level of defence against Trump’s aggressive trade stances, which Carney perceives as a severe risk of inciting global recession.
Carney articulated his concerns, stating, ‘We are in the middle of a trade war, which is coinciding with other real wars. These could have grave implications on the price of commodities and global growth.’ As the former head of the central banks in Canada and the UK, Carney’s commentary carries undeniable weight. Moreover, he highlighted the overbearing tariffs put in place by Trump, which include a 50% tariff on steel and aluminium alongside a 25% tariff on auto industry goods.
Trump has not spared other nations either, with most countries having to face a 10% tax on their imports into the U.S. This figure could potentially see an increase after July 9 when the 90-day negotiation period, as defined by Trump himself, concludes. Mexico and Canada are subject to separate as high as 25% tariffs that were established by Trump as part of his strategy to combat fentanyl smuggling. However, certain goods are still safeguarded under the agreement signed between the U.S., Canada, and Mexico in 2020 whilst Trump was serving his first term.
Canada is the leading international provider of aluminium, steel, and uranium to the U.S. Additionally, it supplies 34 critical metals and minerals which are of great interest to the Pentagon. Each day sees a trade worth approximately 3.6 billion Canadian dollars, which translates to 2.6 billion dollars in U.S. currency, crossing the border. Canada is also the paramount destination for exports for 36 states in the U.S.
Carney, emphasising the importance of ongoing trade relations with the U.S., stated, ‘Our trade relationship with the United States needs to be solidified. Achieving unhindered access to U.S. markets is essential for us.’ Trump recently revealed that a trade framework had already been signed earlier in the week.
This new trade framework contains provisions to guard against potential tariffs, with quotas set for this specific purpose. Despite these protective measures, a baseline 10% tariff will largely remain. In close of his remarks, Carney did not confirm whether he would agree to a trade deal if any U.S. tariffs on Canadian goods persist.
