Mark Carney makes a statement outside the Office of the Prime Minister and Privy Council in Ottawa on Tuesday.Justin Tang/The Canadian Press
Prime Minister Mark Carney said on Tuesday that he and Donald Trump have agreed to intensify trade talks after the U.S. President announced a suite of new tariffs on Canadian goods.
Mr. Trump’s move puts more pressure on Canada to make concessions and remove irritants such as provincial bans on U.S. alcohol products. But, speaking outside of his office on Tuesday, the Prime Minister said that kind of compromise should only be made as part of a comprehensive trade deal.
The Prime Minister spoke with the President on Tuesday, a day after Mr. Trump announced new tariffs for Canada that will be imposed beginning Aug. 19.
Unlike past American tariffs, the new 50-per-cent tariffs will not include an exemption for goods trading under the United States-Mexico-Canada Agreement. They will cover US$20-billion worth of products, according to U.S. officials, roughly 5 per cent of annual Canadian exports to the United States.
“I’ve spoken with the President. We agreed to intensify discussions. We’ll begin that right away,” Mr. Carney said.
Analysis: Trump’s latest tariff threats open new front in trade negotiations
Earlier this month, the U.S. opted not to renew the USMCA, the continent-wide free trade pact, triggering a period of annual reviews set to last a decade. The U.S. has started talks with Mexico to review the deal, but has so far not negotiated with Canada.
At their annual summer meeting in Charlottetown, Canada’s premiers on Tuesday appeared united in their efforts to stand up for the country, but differed in their approaches to Mr. Trump’s latest escalation. The new tariffs targeted dairy, lumber and alcohol, and will pinch some provinces more than others.
Ontario’s Doug Ford championed the sharpest response, calling for “dollar-for-dollar” retaliatory tariffs if the Americans impose the new tariffs.
Mr. Trump, meanwhile, told reporters at the White House that even more tariffs could be coming because he is still mulling others as punishment for Canadian wildfire smoke choking American skies.
“We’re looking at that separately,” he said. “They’re not managing their forests properly and the wind has a tendency to blow right over New York City, right over.” He did not explain how he believed Canada could prevent fires across the millions of square kilometres of its sparsely populated boreal forest.
The President said the 50-per-cent tariffs were necessary because Canada had been “very tough” on the U.S. for the past half-century.
Section 338 of the Tariff Act gives Trump a quick and easy way to impose tariffs
In a surprise move on Monday, Mr. Trump invoked the never previously used Section 338 of the Tariff Act of 1930 to impose levies on Canada. The White House made the announcement just a day after the President and Prime Minister sat together during the FIFA World Cup final.
In addition to tariffing Canadian alcohol and dairy products, the new levies will hit a grab bag of hundreds of other goods, including wood products, hockey sticks, cement, antiques and Christmas ornaments.
Mr. Carney told reporters that in his Tuesday call with Mr. Trump he made a series of “comprehensive and detailed proposals about how to modernize” the trade deal governing Canada and the U.S.
Prime Minister Mark Carney says trade talks will pick up in the coming weeks as the White House readies a new barrage of tariffs.
The Canadian Press
However, he did not provide any specifics, nor did his office. On Monday, U.S. ambassador to Canada Pete Hoekstra said Ottawa has previously offered to double exports of Canadian oil to the U.S. as part of a new trade pact.
Mr. Carney did not rule out Canada retaliating in response to the latest round of promised tariffs. He said he would discuss the options in meetings with the premiers this week. The Prime Minister had a virtual call with them on Tuesday and will join the premiers in Charlottetown on Wednesday and Thursday.
“We will look at all options in terms of how we would respond if they do come into effect,” Mr. Carney said.
U.S. Trade Representative Jamieson Greer on Tuesday suggested the latest round of tariffs is designed to crank up the pressure on Ottawa during USMCA negotiations and stems from Mr. Trump’s desire to move all auto production to the United States.
“Sometimes you take an action that leads to a better negotiation in the end,” he told CNBC.
He accused Canada of failing to make sufficient concessions towards a deal.
“The Canadians have always been willing to engage, if engagement means talking and meeting,” he said, adding that Ottawa’s “proposals are generally for promises to discuss these issues, which we’re already doing, not to actually change.”
U.S. President Donald Trump's latest threat to impose 50 per cent tariffs on a wide swath of Canadian goods is more narrowly targeted than first feared, argues Royce Mendes, head of macro strategy at Desjardins. He sees the new tariffs as part of an intensifying negotiations strategy ahead of U.S. midterm elections in the fall.
The Canadian Press
Since Mr. Trump launched his trade war last year, several countries have signed new deals with Washington, agreeing to punitive economic measures in exchange for the President not imposing even higher tariffs.
Canada has not signed such a deal. Mr. Carney has, however, made concessions to Mr. Trump, including rolling back some retaliatory tariffs, cancelling a planned digital services tax and agreeing to share revenue from the Canadian-funded Gordie Howe International Bridge to Detroit with the United States.
A joint Canada-U.S. celebration planned to mark next week’s bridge opening was cancelled by Ottawa on Tuesday. Infrastructure Minister Gregor Robertson’s office said it would be “inappropriate” in light of the new tariffs.
In an interview, Conservative MP Shuvaloy Majumdar called for more transparency from the Prime Minister about his plan to strike a new trade pact.
“The uncertainty of this economy is unbearable for Canadians, and so they have a responsibility to the public to demonstrate what their plan is to conclude a deal for North America,” he said.
In addition to the Prime Minister’s meetings with the premiers, Dominic LeBlanc, Minister for Canada-U.S. Trade, convened the Canada-U.S. advisory committee later Tuesday.
One of the group’s members, Flavio Volpe, said the tariffs were to be expected as talks between Canada, the United States and Mexico near the home stretch.
“I think we expect the author of The Art of the Deal to throw some curveballs and to turn up the temperature as we get into the later innings,” Mr. Volpe said. “We shouldn’t panic.”
Mr. Volpe, who is the president of the Automotive Parts Manufacturers’ Association, said Canadian negotiators have steadily whittled down the number of irritants that the U.S. wanted addressed.
He said Mr. Trump’s decision to target dairy, alcohol and lumber shows he is trying to force concessions in areas where Canada has not yet made any.
Trump’s latest tariff list reads like a perfectly stocked bar
A major irritant for the Trump administration has been the decision of most provinces to remove U.S. alcohol from store shelves in response to American tariffs on steel, aluminum and autos, which disproportionately hit Canada because of the two countries’ integrated economies.
One of the orders from the U.S. says Canadian imports of U.S. alcohol dropped by 81 per cent after the bans took effect.
Alcohol is controlled by the provinces and territories, and how to respond to the added pressure from the United States dominated the premiers’ talks in Charlottetown.
The provinces are split on the alcohol ban, with Alberta and Saskatchewan allowing the sale of U.S. alcohol, while Ontario and British Columbia have stood firm on the exclusion. Those provinces directed their provincially operated liquor stores to stop purchasing U.S. alcohol in early 2025.
“There is not a chance in hell that U.S. alcohol is going back on the shelf in British Columbia,” B.C. Premier David Eby told reporters.
The idea that the President “can bully us into whatever he wishes is incorrect,” he said.
“We can’t keep rolling over for President Trump. We can’t back down,” Mr. Ford said. “If these talks fail in 29 days, we need to hit them back as hard as we can.”
“We always seem to be on our back heels. We need to be on the offence, not constantly on the defence with President Trump. We need to stand up to the bully.”
Quebec Premier Christine Fréchette said her government would take time to review the new tariffs and called the maintenance of Quebec’s dairy-pricing regime a “non-negotiable.” The system of supply management is a major irritant for the Americans.
Saskatchewan Premier Scott Moe said he supports Ottawa taking a “very ambitious” approach at the negotiating table.