In a surprising turn in the ongoing Canada-US trade conflict, President Donald Trump has issued a new statement threatening to impose a 35% tariff on Canadian goods beginning next month.
The announcement arrives as the two nations are deeply involved in vigorous trade discussions aimed at finalising a new agreement shortly, leaving the implications of the recent tariff threat for these negotiations uncertain.
Canada’s newly appointed prime minister, Mark Carney, is now encountering scrutiny regarding his ability to confront Trump and deliver on the equitable agreement for Canada that he pledged.
Carney emerged victorious in April’s general election, pledging to maintain his “elbows up” stance against US threats. This phrase, rooted in a popular ice hockey metaphor, encapsulates an assertive and confrontational approach to governance.
Canada’s recent concessions to Trump have produced minimal results thus far.
In late June, Canada decided to abandon its proposed Digital Services Tax (DST) aimed at large technology firms, following a warning from Trump that he would terminate negotiations regarding the policy.
The White House asserted that Canada acquiesced to its demands, a development that has sparked discussion within Canada.
Canadian commentator Robyn Urback remarked, “Perhaps Prime Minister Mark Carney’s elbows were beginning to tire.”
She characterised the government’s fluctuating approach to negotiations as a “chicken dance.”
In a recent opinion piece published in The Globe and Mail, Blayne Haggart, a political science professor at Brock University, expressed his scepticism regarding Carney’s US strategy. He stated, “Nothing about Carney’s US strategy, particularly his pursuit of a ‘comprehensive’ trade and security agreement, makes a lick of sense.”
He stated that reversing the decision on Daylight Saving Time has resulted in “less than nothing.”
Despite ongoing challenges, a significant number of individuals are prepared to extend their patience with Carney, as recent polls indicate that his administration continues to enjoy robust backing.
Roland Paris, who previously served as an adviser to Ottawa regarding Canada-US relations, expressed to the media that it is premature to determine if Canada has made concessions too soon.
“The outcome hinges significantly on the final agreement,” he stated.
Mr. Paris stated that it is evident Trump negotiates with a tough approach.
“Should Carney ultimately yield to Trump and result in an unfavourable agreement, he will face political repercussions domestically,” he stated.
Before the reversal on Daylight Saving Time, Canada aimed to placate the president by committing C$1.3 billion earlier this year to bolster security at the shared border, alongside the appointment of a “fentanyl czar” in response to Trump’s assertions regarding the drug’s influx across the boundary.
In his Thursday letter regarding the new tariff, Trump reiterated his warning to Canada concerning the drug.
Carney failed to provide additional countermeasures in response to the president’s decision to double tariffs on steel and aluminium last month.
The prime minister addressed the looming threat of a 35% tariff set to take effect on August 1, stating, “Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses.”
He stated that Canada will persist in negotiations, with the deadline for an agreement now set for next month. The two nations had established a deadline of July 21.
Canada has received a positive development regarding the new tariff rate, as it will not be applicable—at least for the time being—to goods covered under the US-Mexico-Canada free trade agreement, which encompasses a significant portion of cross-border trade.
President Trump has dispatched comparable communications to over 20 nations as part of his strategy to establish new agreements with America’s trade allies.
In Canada, there is a notable consensus among citizens of various political affiliations regarding opposition to Trump’s tariffs.
On Thursday, Conservative leader Pierre Poilievre asserted that his party is prepared to take all necessary actions “to secure the best deal for Canada.” Meanwhile, British Columbia Premier David Eby remarked that Trump’s letter serves as “one more reminder of why Canadians need to come together.”
The ongoing negotiations could involve complexities that are not immediately apparent.
Fen Hampson, a professor of international affairs at Carleton University and a noted expert on international negotiations, contended that despite its smaller economy compared to the US, the country retains a degree of leverage.
“It is crucial to note that American consumers will ultimately bear the cost of the tariffs, not us,” he stated.
Numerous manufacturers in the United States depend on Canadian products such as steel and aluminium, which are presently facing a significant 50% tariff.
Prof Hampson emphasised that the outcome of negotiations should not be assessed solely based on the last action taken or the concession offered. “The evaluation can solely be based on the results it produces.”
Analysts highlight Carney’s initiatives aimed at decreasing dependence on the United States, notably through the signing of an arms agreement with the European Union. Additionally, there is a focus on expediting significant projects and dismantling domestic trade obstacles.
In response to enquiries regarding Trump’s recent threat, Canada’s industry minister, Melanie Joly, emphasised that the government “does not negotiate in public.”
She refuted claims that Canada is failing to confront Trump.
“We are facing a highly unpredictable US administration,” she stated, adding, “and we are not alone in this situation.”
