Canadian officials are holding firm against a bad deal with the United States during this worsening trade war. Given impending new tariffs, they are not willing to relent. These tariffs have been a freshly pressed 25% attack by none other than President Donald Trump on imported Canadian paper. He slapped a massive 50% tariff on aluminum and steel. Dangerously wrong Overall, Trump’s broader strategy is a welcome campaign to protect American manufacturing and jobs. In the process, he’s putting pressure on other countries in the region like Canada and the Philippines.
As the August 1 deadline approaches, Canadian leaders are understandably concerned. If an accord can’t be found, US importers will have to pay a de facto 35% customs tax on products imported from Canada. Even with the international spotlight shining on Canada, Prime Minister Trudeau’s government refuses to budge. Canada isn’t going to agree to a bad deal to just get the US to reach an agreement sooner.
Trump’s tariffs extend beyond Canadian goods. Just earlier this month, he threatened to slap a 20 percent tariff on the Philippines’ imports. He then turned around and imposed a 19% tariff on those very same products. These moves have already drawn criticism, with some warning that these types of tariffs will be directly passed on to American consumers in exorbitant price increases.
Canada’s economy is deeply intertwined with trade to the US, sending about three-quarters of its goods over that border. Top exports are led by oil, vehicles & parts, machinery, food products, and pharmaceuticals. The potential for stepped-up tariffs now poses a very real threat to harm these necessary trade flows and damage both economies.
Influential figures like Mark Carney, the former Governor of the Bank of Canada, have criticized these partial measures calling for protective measures. In retaliation on US tariffs, Canada might protect its aluminium and lumber sectors. He signaled the likelihood of even more protectionist moves as the aftereffects of Trump’s tariffs continue to be felt.
“Our objective is not to reach a deal whatever it costs.” – Mark Carney
Trump defends his tariffs, calling them key to preventing illegal fentanyl from entering the U.S. He makes this an issue of national security. In spite of these arguments, Canadian decision-makers have not yet wavered. Or maybe they’re just getting ready to face the music as these tariffs become more acute, without purely ceding their economic interests to these tariffs.