High-Stakes Trade Talks Accelerate Prior to Wednesday Tariff Deadline
Canada and the United States have still not landed a trade deal just a day before President Donald Trump’s latest tariffs are set to take effect, and Ottawa has signalled that it will retaliate, threatening to heat up an already-bruising, year-and-a-half-long continental trade war.
On Monday, Prime Minister Mark Carney’s chief emissaries sat down with Commerce Secretary Howard Lutnick, one of Mr. Trump’s most influential cabinet members, who could unlock the tariff relief Canada is seeking but has a history of clashing with the country’s leaders.
Mr. Carney, meanwhile, said he has a plan if the new tariffs of 50 per cent on US$20-billion worth of Canadian goods are imposed at 12:01 a.m. Wednesday, adding he would speak with Mr. Trump directly before then.
Three sources with knowledge of the talks said the U.S. is holding firm to its position on autos, leaving one of the toughest issues to crack for the final dash to a deal.
Two other sources said it was also possible that the U.S. would offer a brief extension if talks are close by late Tuesday but haven’t concluded.
The Globe and Mail is not identifying the sources because they were not authorized to disclose details of the confidential negotiations.
Dominic LeBlanc, the minister responsible for Canada-U.S. Trade, and Canada’s chief negotiator Janice Charette met with Mr. Lutnick at his Washington office Monday. They were joined by U.S. Trade Representative Jamieson Greer.
“We’re going to continue working,” Mr. LeBlanc told reporters as he left the meeting after about an hour and 45 minutes. “Our job is not yet done.”
While Mr. Greer is in charge of negotiations and has been Mr. LeBlanc’s main interlocutor this past month, Mr. Lutnick wields significant influence over Mr. Trump. His department also directly administers the auto, steel, aluminum and forestry tariffs that Canada is trying to get reduced in the talks.
One of the three sources briefed on the discussions said it was a good sign that Canadian officials had met with him, as it could mean necessary technical steps are being taken to push a deal forward.
Mr. Lutnick, however, has a history of disparaging Canada. Earlier this year, he convinced Mr. Trump to delay the opening of the Canadian-funded Gordie Howe International Bridge to Detroit, in part so a deal could be worked out to protect the business of the rival Ambassador Bridge, which is owned by a Trump donor, according to media reports.
In April, he accused Canadians of unfairly milking the U.S. economy. “They suck,” he told a public event in Washington.
A separate source with knowledge of the negotiations said Mr. Lutnick’s role is to reinforce the U.S.’s position, not to compromise or try to meet Canada halfway. But yet another source said Mr. Lutnick’s presence could bode well for Ottawa, as it is an indication that Mr. Trump’s advisers are all united on the deal.
On the key autos issue, the three main sources said Monday, the U.S. is sticking to its offer to lower the tariff from 25 per cent to 15 per cent and maintain an exemption for the value of U.S. content in Canadian-made vehicles. Canada has demanded a much lower tariff and an exemption for the value of all content produced in North America.
One of the sources said there had been virtually no negotiation over the matter, pushing it close to the deadline of the talks. Another said that, given the U.S. content exemption, the offer is at least better than what any other country had received from Mr. Trump.
Two sources briefed on the talks from the U.S. perspective told The Globe that they were optimistic and believed a deal was getting closer. They were skeptical that the White House would extend negotiations past Wednesday, given that the purpose of Mr. Trump’s latest tariff threats was to press Canada into a deal.
One of the sources, plus a different source, said a short extension was possible.
Two other sources, briefed by the Canadian side, said earlier Monday that negotiators remain far apart. However, following the meeting with Mr. Lutnick and Mr. Greer, one source briefed on the talks said there was a 50/50 chance of a deal.
At a Monday news conference in St. John’s, Mr. Carney said the federal government is ready for all outcomes Wednesday, including if the new tariffs take effect.
“I have plans for any situation,” he said, describing talks with the U.S. as “very intense and delicate.”
The Prime Minister, speaking at the announcement of a hydroelectric power deal between Quebec and Newfoundland and Labrador, joked that he would translate “maîtres chez nous” – masters in our own home – for Mr. Trump.
In the high-stakes talks, Canada is seeking reductions in Mr. Trump’s sectoral tariffs on autos, steel, aluminum and forestry, imposed last year under Section 232 of the Trade Expansion Act, as well as for the President to drop his plan to impose his latest threatened levies, under Section 338 of the Smoot-Hawley Tariff Act. The latter tariffs would hammer electronic equipment, dairy and alcohol, among many other things.
In exchange, the U.S. is demanding that Canada concede on a series of trade issues, including an end to retaliatory tariffs on U.S. autos, having provincial leaders end their bans on American alcohol and cancel their Buy Canadian procurement policies, as well as changes to how diary licences are allocated.
Other issues factoring into the talks are Washington’s demand that Ottawa complete its long-delayed purchase of F-35 fighter jets and grant the U.S. right of first refusal over Canadian critical minerals.
The Globe previously reported that forestry is a particularly serious sticking point, with Canada insisting on a reduction in Section 232 tariffs on the sector and the U.S. wanting to exclude it entirely from the deal.
Getting the premiers to sign on will also be necessary to fulfill some of Mr. Trump’s demands, making sectors such as Ontario’s auto and British Columbia’s forestry industries key to getting everyone on board.
Ontario Premier Doug Ford said Monday that his province is ready no matter what happens Wednesday. “We need to stick together,” he said during a speech at the Association of Municipalities of Ontario conference in Ottawa. “Canada, the United States and Mexico are so much stronger when we work together.”
Mr. Ford spoke of attending a recent U.S. governors’ meeting that included both Democrats and Republicans.
“People want certainty. They want stability,” he said. “They’re getting very impatient − not with us, I think, with the President − that they want to start moving and getting a deal together.”
With reports from Laura Stone and Mark Rendell in Toronto
This article was first reported by The Globe and Mail
