Canadian Prime Minister Mark Carney has engaged in a series of calls with United States President Donald Trump, according to Carney’s office, as Canada attempts to avert new 50 percent tariffs from taking effect at midnight on Wednesday. The two leaders spoke by phone on Monday afternoon, with Carney’s office stating that no further details were shared, though the call focused on the ongoing trade negotiations.
” We are negotiating,” Carney told reporters on Monday, emphasizing the intense and delicate nature of the negotiations. He stated that the discussions are ‘very intense and delicate’ and that public discussion is not the priority. The new US tariffs would cover approximately $20 billion worth of imports, applying regardless of Canadian goods qualifying for preferential treatment under the US-Mexico-Canada Trade Agreement, which has shielded much of Canadian industry from earlier US tariffs.
Spokespersons for the White House and the Office of the US Trade Representative have declined to comment on the calls, adding to the sense of urgency in the negotiations. The two countries have historically wrangled over trade for decades, with disputes including Canadian softwood lumber imports and US access to Canada’s protected dairy market. Despite these ongoing disagreements, they have maintained a relatively amicable relationship.
The new tariffs would primarily impact automobiles, with the US Commerce Department releasing new rules for automakers exporting from Canada and Mexico to certify their current levels of US content for tariff deductions. This process, which previously took twice per year, is now being reduced to once per year. However, the two sides remain divided on how to account for content, with Washington demanding that only US-produced content be counted, while Canada wants all North American content, including Canadian and Mexican parts, to be counted.
The automotive sector is facing significant economic consequences. According to a Reuters report, the two sides have discussed cutting US Section 232 tariffs on Canadian vehicles to 15 percent from 25 percent, with further reductions based on the amount of US content in each vehicle. The Canadian auto official, Candace Laing, stated that with automotive profit margins averaging only 6 percent, even a 15 percent tariff was too high, arguing that with roughly half of the value of every Canadian-built vehicle originating in the US, tariffs would hurt businesses on both sides.
Earlier this Tuesday, the US Commerce Department released new rules for automakers exporting from Canada and Mexico to certify their current levels of US content for tariff deductions, reducing the complicated exercise to once per year from twice per year. However, the US Federal Register notice stated that automakers must recertify vehicles’ US content by September 30 for them to claim deductions in the new annual cycle starting December 1.
Trade experts and industry officials warn that the new tariffs could lead to job losses and business closures in vulnerable sectors including lumber, wine, and dairy. They also suggest that the dispute could complicate broader negotiations for the United States-Mexico-Canada Agreement (USMCA), which the US last month refused to renew and which is now in an annual review. ‘There are billions in goods per year that were not impacted before, but now are at risk of being impacted significantly,’ said Candace Laing, CEO of the Canadian Chamber of Commerce. ‘Businesses have been doing a high-wire act for well over a year, holding off on hiring, investment, and growing in Canada.’
Canadian officials met with President Trump on Monday for nearly two hours, with Greer repeatedly citing Canada’s tariffs following initial US tariffs, some provinces’ refusal to stock US liquor, and Canada’s dairy supply management system as grievances. The situation remains delicate, with the potential for further escalation or a resolution depending on the outcome of the negotiations.
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Source: Al Jazeera
