Trump, Carney hold talks as new US tariffs on Canada loom

U.S. President Donald Trump and Canadian Prime Minister Mark Carney engaged in urgent talks on Monday to address looming tariffs on Canadian goods, according to a Canadian official. The tariffs, which would take effect on Wednesday, are set to be imposed on approximately 5.5% of Canada's exports to the U.S., equating to about US$20 billion in value, as estimated by Oxford Economics.

These duties primarily target products such as wine, hockey sticks, cement, paper, printing, wood, clothing, and electronics equipment. While the impact on Canada's economy is described as modest, Oxford Economics notes that the duties could disproportionately affect central Canada's manufacturing sector. Canadian negotiators have been in Washington to secure a deal to avoid the tariffs and also to seek relief on Trump's sector-specific duties, which have adversely affected industries like auto, steel, lumber, and aluminum in Canada.

Ottawa is reportedly offering concessions, such as pressuring provinces to allow US alcohol and wine back onto their shelves. Despite these efforts, it remains unclear whether a deal is imminent. The White House has stated that any decision on the tariffs would come directly from Trump. Former US commerce official Christopher Padilla expects that the administration threatened new tariffs to gain early concessions from Canada during ongoing negotiations over renewing the US-Mexico-Canada free trade agreement (USMCA).

However, even if a deal is reached, it might still be rejected by Trump, who has been known to penalize allies over other political concerns.