Prime Minister Mark Carney said he and United States President Donald Trump agreed to accelerate trade talks ahead of a potential U.S. move to impose 50 per cent tariffs on a range of Canadian goods next month.
The Trump administration announced Monday it would add the levies over what it said was unfair treatment of American alcohol, cars and dairy, further inflaming trade tensions between the two neighbours.
“We agreed to intensify negotiations in the coming weeks and the team and myself look forward to doing that,” Carney told reporters in Ottawa, while warning that Canada is prepared to respond if the White House follows through with the tariffs. “We will look at all options in terms of how we would respond if they do come into effect.”
Trump’s sectoral tariffs on autos, steel, aluminum and lumber have hurt key Canadian industries, but many other goods have been exempt from U.S. levies if shipped under the Canada-U.S.-Mexico Agreement (CUSMA). The new tariffs would affect about five per cent of Canadian exports to the U.S., but there would be no CUSMA exemption — signalling a significant escalation in the trade war.
The U.S. declined to renew CUSMA on July 1, setting up the three countries for annual reviews of the trade pact signed in Trump’s first term.
“This is part of the negotiation,” Carney said. “The first objective is to get a comprehensive agreement that benefits, obviously, both countries, that’s consistent with CUSMA,” he added.
“We’ll work towards that,” he said, but in parallel, “we will do whatever it takes and keep all options” open.
The Canadian government placed tariffs on U.S.-made autos in response to the Trump administration’s levies on foreign vehicles last year, though it provides exemptions for automakers that are building vehicles in Canada. Its supply-managed dairy system has also long been a source of tension.
Provincial governments are responsible for liquor distribution, and Ontario Premier Doug Ford and several other leaders decided to pull U.S. booze from shelves in response to Trump’s tariffs last year.
“The decision to change that first and foremost will be taken by the provinces themselves each individually and should only be taken, in my judgment, as part of an overall agreement,” Carney said.
Provincial premiers are gathering in Prince Edward Island this week and Carney is set to speak with them later Tuesday.
“Canada’s been very, very tough on us over the years for many years, and no other president’s done anything about that,” Trump said Tuesday at the White House. “I love Canada. I love the people of Canada.” But he repeated his view that Canada could not survive without the U.S.
—With assistance from Hadriana Lowenkron and Jennifer A. Dlouhy.