U.S. President Donald Trump has ramped up the pressure on Canada, signing an executive order to slap 50% tariffs on array of Canadian products in 30 days.
He said it’s in response to unfair trade practices and to level the playing field as the two countries, along with Mexico, are in trade talks. But Canada Prime Minister Mark Carney said the new tariffs are in violation of the U.S.-Mexico-Canada agreement.
The new tariffs that will be imposed in less than a month cover a wide array of goods — and it won’t matter whether they fall under the USMCA. Trump said they are in response to Canada’s discriminatory treatment of American exports — such as automobiles, alcohol and dairy — named recently as "trade irritants" by Washington.
The announcement came late Monday. By Tuesday morning, Carney was on a phone call to Trump, but there was no apparent flexibility.
"I spoke with president Trump earlier this morning," Carney said. "We agreed to intensify negotiations in the coming weeks."
Carney said his government understands the motivation behind the tariffs and the dramatic changes the Trump administration is working bring in.
"Throughout this time we have made a series of detailed and comprehensive proposals about how to modernize [USMCA], recognizing the transition that the U.S. is underway in all its trading relationships including with Canada and Mexico," he said.
Carney said since the beginning of this trade dispute — 18 months ago — Canadians have stood together, supported each other, bought Canadian and diversified trading partnerships abroad.
Many economists say the tariffs do not serve anyone, and the effects will be felt by Americans as well as Canadians.
"Probably the one that’s going to have the biggest impact is tariffs on Canadian cereals and dairy," said Colin Mang, an economist at McMaster University. "This is going to drive up grocery prices even further for American consumers. It’s really going to hurt American families."
But Canadians, too, will be hurt by the latest Trump tariff.
"You know it really puts Canada in a unique and unfortunate position of having among the highest tariff rates of any trading partner," said international trade lawyer Dave Townsend. "A lot of companies cannot do business with a 50% tariff."
There are many Canadians, political, business and labor leaders who say it’s time to stand up to the Trump administration. Eight of the 10 provinces have implemented the ban on American booze, which Washington has referred to several times as a major irritant. The provincial premiers are meeting on Prince Edward Island, and tariffs and booze ban took over Tuesday’s agenda.
Ontario Premier Doug Ford has led the ban on American alcohol products, and he said he won't budge on the issue.
"We need to stand up to the bully," Ford said. "And we need to hit him tariff to tariff."
That’s echoed by British Columbia Premier David Eby.
"There is not a chance in hell that U.S. alcohol is going back on shelf in British Columbia," he said. "And the idea of the president that he can bully us into whatever he wishes is incorrect."
The premiers did agree to dropping interprovincial barriers so Canadian alcohol could move freely across the country.
The premiers also say Carney has not asked them to lift their alcohol bans. For his part, Ford wants to hit back in the areas where the U.S. needs Canada: energy, potash and critical minerals.
Carney will join the premiers in the next day or two and there will likely be a united plan going forward.
In one last note: The opening of the Gordie Howe Bridge between Windsor and Detroit will go ahead next Monday, but Ottawa says there will no longer be a celebration ceremony between the two governments to mark the opening.
