U.S., Canada in last-minute talks to head off steep new U.S. tariffs
Last-minute talks were continuing between the U.S. and Canada in an effort to head off President Trump's plan to impose 50% tariffs on $20 billion worth of Canadian goods.
The United States and Canada have been locked in a long-standing trade dispute, with recent tensions escalating over issues such as Canadian softwood lumber imports and access to Canada's dairy market. Despite this, the two nations have maintained a friendly and cooperative relationship, with Canadian soldiers fighting alongside Americans in Afghanistan following the 9/11 attacks.
The 5,525-mile border between the two countries is not defended and experiences daily crossings of nearly 330,000 people and $2 billion worth of goods. Around 800,000 Canadians live in the United States.
However, President Trump's aggressive approach to trade with Canada is a significant deviation from their usual cooperative stance. Trump has imposed tariffs on Canadian goods in an effort to boost manufacturing in the United States and has made inflammatory comments about potentially turning Canada into America's 51st state. Canadians have responded negatively, with a petition to expel the U.S. ambassador allegedly signed by nearly 218,000 people since July 21.
This petition accuses Ambassador Pete Hoekstra of normalizing Trump's threat to annex Canada, among other grievances.
A crucial deadline is looming on Wednesday, when Trump plans to impose 50% tariffs on $20 billion worth of Canadian products, covering a range of items from hockey sticks to tongue depressors. To avoid new tariffs, both nations are engaged in intense negotiations. Canadian Prime Minister Mark Carney stated that the negotiations are delicate and not meant for public discussion.
Trump's relationship with Canada has been strained due to trade, NATO, a dispute over a Detroit-area bridge, and his threats to make Canada the U.S.'s 51st state. Currently, the U.S. levies a 10% tariff on Canadian goods, though many are exempt due to adherence to the USMCA, a trade deal signed during Trump's first term. Nearly 72% of Canadian exports to the U.S. last year went to the American market.
The Trump administration might be hesitant to impose another hefty tariff, potentially hurting consumers during the upcoming midterm elections.
Experts believe that neither side wants the tariffs to take effect. U.S. trade negotiators aim to convince Canada to purchase more U.S. military equipment, participate in missile defense programs, and grant greater access to critical minerals, reducing reliance on China. Canada, on the other hand, seeks relief from U.S. tariffs on steel and aluminum as well as softwood lumber, which they claim receives unfair government subsidies.
Trump has prioritized tariffs in his economic agenda for his second term. In 2018, he imposed hefty import taxes on numerous countries, citing the U.S. trade deficit as a national emergency. However, the Supreme Court overturned these tariffs in February, prompting Trump to seek alternative ways to implement tariffs. Last month, he imposed 10% to 12.5% import taxes on 59 countries and the EU, accusing them of failing to enforce restrictions on forced labor imports.
Trump also invoked a 1930 tariff law to impose 50% tariffs on some Canadian exports. The Section 338 tariffs, never used before, are based on the claim that Canada discriminates against American exports of autos, alcohol, and cheese. If Canada retaliates, the U.S. will take action, according to U.S. Trade Representative Jamie G. Greer.
Trump is actively negotiating the renegotiation of the USMCA, the North American trade pact, to secure additional concessions from Canada.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
