Prime Minister Mark Carney has no immediate plans to ask U.S. President Donald Trump and his negotiating team to return to the table for more trade talks, a source with knowledge of the plans said Monday.
The message leaves little optimism for a resolution to punishing new tariffs from the United States and what Mr. Carney on Saturday described as a trade “war” with Canada’s closest ally and economic partner.
The source said while Canada would not ask for talks at this stage, it’s possible the Trump administration could change its mind and ask for negotiations to resume. Though the source cautioned that is not what Ottawa is planning for.
A separate source said Ontario is now planning for at least two years of tariffs from the United States.
The Globe and Mail is not identifying the sources who were not authorized to speak publicly about the matter.
Meanwhile, Mr. Trump says he will raise tariffs on Canadian autos to 50 per cent and also start tariffing auto parts on Jan. 1, 2027, after a prospective trade deal between the two countries collapsed on Friday.
Mr. Trump’s latest threatened tariffs would be in addition to 50-per-cent tariffs on US$20-billion worth of Canadian goods that came into effect on Saturday, as well as tariffs on steel, aluminum, autos, forest products and other sectoral levies in place since last year.
“Canada has been ripping off the United States of America for years,” Mr. Trump wrote on Monday on his Truth Social network. “Not sustainable, and NOT ANYMORE!”
Mr. Trump said he would double auto tariffs from 25 per cent to 50 per cent and that these would apply to cars, trucks, and auto parts. Auto parts had not previously been tariffed, expanding the economic blast radius of his continental trade war.
He also said steel tariffs would be “increased” to 50 per cent. These tariffs are already at 50 per cent, as are tariffs on aluminum. Forestry tariffs range from 10 per cent to 25 per cent, in addition to older tariffs on softwood lumber that date to Mr. Trump’s first term.
“Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer! On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!” Mr. Trump wrote.
He also complained about a “60 Billion Dollar Deficit” between the countries and Canadian tariffs “on our Farmers.” The trade deficit is mostly caused by the U.S. choosing to import Canadian oil and gas. He did not specify which farmers he was referring to, but Canada’s dairy supply-management system has long been a trade irritant. The vast majority of U.S. agricultural products face no tariffs from Canada.
Ottawa readies tariff-relief plan for businesses
Prime Minister Carney said this weekend that he ordered negotiators to walk away from trade talks on Friday after the U.S. added more punitive demands to the trade deal at the last minute. Among other things, he cited American demands that Canada mirror U.S. trade restrictions on other countries, hampering Ottawa’s ability to make trade deals.
He said Canada will retaliate “dollar-for-dollar” against Mr. Trump’s tariffs on US$20-billion of goods. Those Canadian counter-tariffs will start on Sept. 8.
The auto sector was at the centre of trade negotiations in recent weeks, with Canada promising to remove its retaliatory tariffs against U.S. automobiles and to unwind its remission system – which lowers tariffs for companies that retain production in Canada – in return for lower U.S. tariffs on autos.
The Trump administration had offered to cut auto tariffs to 15 per cent from 25 per cent. However, the two sides disagreed about whether that relief would apply to trucks, and whether there would be a tariff carve-out for Canadian content in the vehicles mirroring the existing carve-out for U.S. content.
Mr. Carney said that Mr. Trump’s negotiating team informed Canadian negotiators at the last minute that medium- and heavy-duty trucks – such as General Motor Co.’s GM-N Chevrolet Silverado produced in Oshawa, Ont., and Ford Motor Co.’s F-N F-Series trucks that will be produced in Oakville – would not be getting the tariff relief granted to light vehicles.
Throughout the negotiations last week, the auto industry and Ontario Premier Doug Ford pushed Ottawa to try to get better terms for the sector. Even though the deal would have lowered the effective tariff rate on Canadian-made light vehicles to around 7.5 per cent, auto industry experts have argued the tariff rate needs to be in the low single-digits to ensure the long-term profitability and survival of final vehicle assembly in Canada.
Auto tariffs of 15% would erase profitability and spur industry’s decline, experts say
Mr. Carney was also under pressure from Quebec cabinet ministers over a U.S. demand that Canada drop rules obliging streaming services such as Netflix and Amazon Prime to prioritize Canadian content, including French-language content, in what its algorithms surface for viewers in Canada.
On Monday, Mr. Ford suggested that Canada should cut off the U.S.’s oil supply in response to Mr. Trump escalating his trade war.
“Well, he can kiss my ass, as far as I’m concerned,” the Ontario Premier told Toronto talk radio station NewsTalk 1010. “We’re going to go at him full speed,” he said, threatening that American motorists ”won’t be able to fill up, because we’ll be controlling the oil and the gas going down there.”
Mr. Carney has previously said he does not “see the value” in putting energy exports such as oil on the table in trade talks. “Canadians are reliable,” he said last month in Alberta. “People trust us, and so, when you’re a supplier of a key commodity, key service, you’ve got to think really hard about not supplying.”
Last year, Mr. Ford announced a surcharge on Ontario’s electricity exports to the U.S. as retaliation for Mr. Trump’s tariffs. He quickly backed down after Mr. Trump threatened to increase tariffs in response.
Throughout the trade war over the past year, auto parts have been excluded from tariffs in recognition of the crucial role hundreds of Canadian parts suppliers play in U.S. auto supply chains. Mr. Trump’s new threat to impose 50-per-cent tariffs on auto parts would amount to a major escalation.
With the prospective trade deal in shambles, the auto industry is relying on the remission system Ottawa put in place last year to protect the sector.
The system gives auto manufacturers a break on Canada’s 25-per-cent tariffs on U.S.-made vehicles if they maintain their production levels in Canada. In effect, it’s leveraging access to Canada’s sizeable auto market of around 2-million vehicles per year to convince the “big three” Detroit automakers, Honda HNDAF and Toyota TM-N to keep their factories on this side of the border.
The two sides have spent more than a year and a half in off-and-on negotiations over Mr. Trump’s tariffs. The deal last week, arrived at after a month of feverish talks, would have seen Canada accept some of Mr. Trump’s tariffs and make a long list of other concessions in exchange for the President lowering the tariffs and not hitting Canada with new ones.
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