U.S. Makes It's Position on Trade Clear

Figuring out the the Trump position on anything is a difficult one. He can contradict himself in the same day. But fair to say that his tariffs on Canada for steel, aluminum, lumber and cars is not just a negotiating position but the actual position he is taking so long as he is president. Jamieson Greer, the U.S. Traded Representative has made it very clear. He has stated that Canada's manufacturing sector has to move to the U.S. and Canada will have at least 10% tariff on all goods and possibly 15% tariff and Canada can't have any corresponding tariff or face punishment. He says the U.S. wants the liquor ban abandoned (even though it is in response to U.S. sectoral tariffs), they want access to Canada's dairy

The conservative viewpoint in Canada is that Trudeau and now Carney were just playing games on a deal. It is apparent that Poilievre in 2026 has seen popularity drop even steeper for not even mentioning Trump by name for few of alienating his base who, in some cases, support Trump and even advocate for the U.S. to annex Canada or for parts to separate. The steady migration of his MPs to the Liberals and low poll numbers could indicate that made in his own party see Trump as a drag on their support and chanced of government.

July 1st is the day that CUSMA, the free trade agreement is to be negotiated in earnest although discussion are going on non-stop since Trump came back into office. NAFTA and now CUSMA have been around since 1994 and aside from a few areas such as culture and supply management, it is almost entirely tariff-free. As such, Canada, Mexico and the U.S. have configured supply chains so that we are all supplying elements to an overall economy. The end of free trade means those supply chains disappear.

It would appear the U.S. thinks that all manufacturing will be in the U.S. and we will buy the products. However, the U.S. car companies of Ford, GM and Stellantis have already indicated now high priced the cars will be and that they are likely to go under as a result. For Canada, we are likely just to stop buying those products and get cheaper ones elsewhere. Chinese electric cars are far cheaper.

Many Republicans know how damaging tariffs are but the fear they have of Trump is so high, they will say nothing. The strategy of waiting or dragging out negotiations has been mentioned a few times. The Supreme Court has struck down some tariffs and others have time limitations on them. All the while, the mid-term elections are coming and some Republicans fear they will lose the House and possibly the Senate. By then it is game over and the House will take responsibility for tariff control again and Trump will see more Republicans distance from him.

Or at least that is what the Carney and the Canadian government is probably hoping for. Signing a bad deal is worse than no deal. As most countries are finding, Trump changes the deals he has in place every week.  With this in mind, Carney has been going to country after country to begin the process of restoring old trading relations and beginning new ones. In this past week, a deal with India on energy has been made despite misgivings about Indian involvement in the death of Canadians.

There is probably no trade deals out there that don't have some sort of naysayer. Sanctions for countries like Belarus and Russia because of Ukraine invasion. Tariffs, boycotts and tensions with the U.S. with Trump. Issues with China and India because of foreign intervention. And the list goes on. Any attempt to change those dynamics comes with challenges. And conservative media keeps says Carney is holding up real work on a U.S. trade agreement.

It starts to feel like gaslighting as we often see from Conrad Black contributions from the National Post. Or puff pieces from Postmedia about Poilievre. It is no wonder why Ford Progressive Conservatives get so annoyed. Ford knows that the deal the U.S. wants is to close down all car manufacturing in Canada and have a 15% tariff on top of that. Some federal Tories seem convinced Carney is holding up the deal but the provincial ones know that only a quick bad deal is in the offing.

Time is on Carney and Canada's side. Tariffs are unpopular among Americans. War fares even worse and the United States is doing both. The mid-term election in November possibly means the House of Representatives and Senate go Democrat. And while Democrats are not always trade friendly, they are not likely to pursue blanket tariffs on Canada and the world. Trump seems pretty set on his path and for the foreseeable future, Canada is likely to try to stay off his radar while leaving negotiating to the backrooms.