Once again, President Donald Trump has unleashed a wave of new tariffs, this time in dozens of letters to allies and foes alike. One of them is to Canada and outlines a 35 percent tariff that’s to come into effect on August 1, despite the two countries being in the midst of intense negotiations on a new trade deal. Some analysts north of the border call it a Trump tactic; others say Canada should hit back hard. There’s some uncertainty about which sectors exactly will be hit, and just how Canada should respond.
The August 1 deadline caused Prime Minister Mark Carney to revise his own deadline for a trade deal with Washington from July 21 to the August date. However, Foreign Affairs Minister Anita Anand said she believes a deal can still be reached by next week.
“Our teams are working extremely hard behind closed doors in a complex negotiation,” Anand said. “This is an effort that we are putting all our weight behind. It is necessary for the health of our economy and the benefit of Canadian workers and businesses. Therefore, I will say that we are still hopeful that an agreement can be achieved.”
Canada’s Minister of Innovation, Science and Industry, Melanie Joly, isn’t pulling any punches about the new tariffs.
“We denounce these illegal tariffs, and we think they are a direct attack against our workers, and now in the copper industry. So, we’ll fight against them,” Joly said.
Joly was referring to Trump’s recently announced 50 percent tariff on copper imports to the US. More than half of Canada’s copper exports go to the U.S. Trump has also threatened 30 percent tariffs on Mexico and the European Union. John Boscariol is a Toronto-based international trade lawyer.
“This is all part of Trump’s negotiation bluster; we’ve seen it time and time again. I think this is all part of his plan to create somewhat of a level of chaos that he feels is going to create leverage for him in the trade negotiations with each of these partners,” Boscariol said.
The new deadline does give negotiators more time to reach a deal. Matthew Holmes is a senior vice president with the Canadian Chamber of Commerce.
“There are almost two tracks here. This blanket 35 percent threat. If it applies to absolutely everything, it’s going to be very damaging to the Canadian economy. But it will ultimately also be damaging to the American economy,” Holmes said. “It will mean that the products they buy today at this price, they’re going to pay 35 per cent more for it, which will make them quite expensive for the American people and for American businesses.”
Canada also continues to take steps to strengthen its trading partnerships throughout the world. Here again is Industry Minister Melanie Joly.
“We need to make sure that while the US is closing its markets and really taking its own path regarding protectionism, that we as a stable and democratic country continue to have open markets, including with the EU,” Joly said.
But there could be a lot more at stake than trade, even implications across other important parts of the North American relationship. Wesley Wark is a national security expert.
“I think we have to recognize that we’re in an entirely uncharted territory with the American administration, and that we have to be tough in response,” Wark said. “And being tough in response not just on the economic front but I think it really is on the national security front and being tough on the national security front and getting through to, if not Donald Trump, at least officials around him, that Canada is really serious that we will go our own way, if we cannot trust the United States as a partner.”
Although Trump’s playbook has become familiar, it’s still created uncertainty for businesses, and some critics say that it has a broader impact. The idea of threatening huge tariffs in order to get Canada to accept a lower baseline tariff. Unions in particular say that’s coercion.
Meanwhile, Prime Minister Carney will meet with provincial premiers a week from today to map out their tariff strategy.
