Canada Dropping Retaliatory Tariffs Outside Metals, Autos
Canadian Prime Minister Mark Carney said that Canada is dropping its retaliatory tariffs on American exports -- except for those in steel, aluminum and autos -- as long as those U.S. goods qualify for USMCA.
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Carney noted that the retaliatory measures it imposed, which it generally has done in trade disputes, have been "to incentivize a negotiated settlement," but few other countries followed suit. Now, he said, Canada will match what the U.S. has done, in excluding most goods from tariffs -- he noted that "more than 85% of Canada-U.S. trade is now tariff-free."
President Donald Trump, speaking to reporters at the White House, said he had a "very good call" with Carney on Aug. 21, and said he likes the Canadian prime minister a lot.
"And we're going to have another call soon," he said.
He complained that "Canada and Mexico have taken a lot of our business over the last 30 years," but said that "we are working on something, we want to be very good to Canada."
Carney faced skeptical questions from the Canadian press about what he had gotten in return for dropping these tariffs. One reporter said, "Your argument today is Canadians should accept the best of a bad deal."
The reporter said that Trump said that dropping the retaliation would kick-start negotiations. He continued that Carney also said that the two had "a long conversation yesterday, and we see the opportunity to build on our relationship. ... We intend to advance those discussions as rapidly as possible."
Carney said he rejected that characterization, though he had emphasized repeatedly that Canadian exports are facing the lowest effective tariffs -- 5.6% -- of any country in the world.
"It's vital we do everything we can to preserve this unique advantage for Canadian workers, Canadian businesses," he said in his opening remarks.
In responding to that question, he said, "We have held out, we have not signed a deal we don't think is in the best interests of Canadians."
He said by doing this, it makes space to talk about the metals, autos and lumber, and "to make sure for those strategic sectors ... [we] get fair access to the U.S. market."
Although Carney said Canada's position is no longer "elbows up," or fighting against its larger southern neighbor, he repeated that the strategy of integrating the Canadian and U.S. economies is no longer the way to go.
"Some of our historic strengths have become vulnerabilities" with the new trade posture, he acknowledged. "We must adjust."