Canadian Prime Minister Mark Carney will meet with President Donald Trump at the White House on Tuesday for trade discussions.
Trump’s feud with Canada became one of the first major foreign policy dramas of his second administration, beginning even before he took office. Most recently, the United States imposed a 35% tariff on some Canadian goods, higher than many other close U.S. trading partners. Carney will try to negotiate this down during a Tuesday visit to the White House, where the Canadian and U.S. leaders have been seen to get along.
The prime minister’s office said Carney would travel to the U.S. on Monday evening, “ahead of a working visit and meeting” with Trump the following day.
“Canada and the U.S. each launched consultations last month that will inform preparations for the first joint review of CUSMA. The Prime Minister’s working visit will focus on shared priorities in a new economic and security relationship between Canada and the U.S,” the statement read.
The Canadian government has started to view talks with the U.S. optimistically after a long period of pessimism. Canada’s top trade negotiator, Dominic LeBlanc, told a Canadian parliamentary committee earlier this week that Canada still had leverage in the trade war with the U.S. because it was also hurting the latter’s businesses.
“We are confident that the domestic pressure from senators, governors, business leaders, union leaders, in the United States will also create potentially an opportunity for us to come to an agreement with the American administration,” he said.
Trump’s main stated logic of tariffs against Canada was the allegation that it wasn’t doing enough to stem the flow of fentanyl across the border into the U.S. Carney has countered this accusation, saying Toronto has put a significant amount of resources toward stemming the flow of illicit drugs to the U.S.
He took on a pessimistic tone in August, when Trump levied the 35% tariffs against many Canadian goods not covered by the U.S.-Mexico-Canada Agreement. Carney said Canada was “disappointed,” but found hope in the USMCA exemptions.
“The U.S. application of [USMCA] means that the U.S. average tariff rate on Canadian goods remains one of its lowest for all of its trading partners,” he said in a statement at the time. “Other sectors of our economy — including lumber, steel, aluminum, and automobiles — are, however, heavily impacted by U.S. duties and tariffs. For such sectors, the Canadian government will act to protect Canadian jobs, invest in our industrial competitiveness, buy Canadian, and diversify our export markets.”
The USMCA gives duty-free treatment for materials produced in the U.S., Mexico, or Canada, provided importers or manufacturers have a Certificate of Origin proving it. Products wholly manufactured using materials originating in North America; materials from North America, such as American lumber, Mexican avocados, and Canadian mineral ores; products that undergo “substantial transformation” in North America; and products that meet a regional content/costs requirement are all exempt from tariffs.
Roughly 90% of Canada’s exports to the U.S. in May were USMCA-exempted, meaning the tariffs were only harshly felt on specific industries, mainly Canada’s aluminum, lumber, steel, and automobile industries.
CANADA DROPPING RETALIATORY TARIFFS ON MANY US PRODUCTS
Canada dropped many of its retaliatory tariffs on U.S. products late last month, reasoning that this would match the USMCA exemptions provided by the U.S.
“Canada and the U.S. have now reestablished free trade for the vast majority of our goods,” Carney said during a press conference. “Canada currently has the best trade deal with the United States. And while it’s different from what we had before, it’s still better than that of any other country.”