Trump and Canada Negotiate Tariffs to Avert Trade War

President Donald Trump and Canadian Prime Minister Mark Carney are engaged in high-level trade negotiations in Washington to avert 50 per cent tariffs on $28 billion worth of Canadian goods. The U.S. administration has demanded greater market access for dairy and the removal of provincial bans on American liquor and wine. In a sign of good faith, Canadian premiers have agreed to lift those alcohol bans to facilitate a deal.

Negotiators are currently discussing a compromise that would reduce U.S. auto tariffs from 25 per cent to 15 per cent and lower steel and aluminum tariffs from 50 per cent to 25 per cent via a tariff-rate quota. While Canada-U.S. Trade Minister Dominic LeBlanc stated that parties are very close to an agreement, he noted that they still have more work to do. Canada continues to resist changes to its dairy supply management system and is pushing for formal renewal talks for the Canada-U.S.-Mexico Agreement (CUSMA).

Mexico's Economy Minister Marcelo Ebrard expressed optimism that Mexico will secure similar tariff reductions for its own automobile and steel exports. Trump indicated that the U.S. is starting a new deal with Mexico, while characterizing the Canadian talks as moving along. Despite the progress, U.S. Vice-President JD Vance claimed Prime Minister Carney attempted to out-tough the U.S. administration during the process.