As the rest of the world awaits the return of Donald Trump’s ”reciprocal” tariffs, Canada is out of the line of fire. Probably. At least for now.
Wednesday marks the end of a 90-day pause of tariffs on dozens of U.S. trading partners around the globe which were announced in April, ranging from a low of 10 per cent to a high of 84 per cent.
Canada wasn’t on the initial list of countries announced on ”Liberation Day” April 2, and Prime Minister Mark Carney has said he’s still aiming for a trade deal with the U.S. by July 21. Still, no-one should assume we’re off limits given Trump’s penchant for unpredictability, warn trade experts and business groups.
“There’s a general sense we’re on our own track, because we’ve got our own negotiations going on, but I don’t think we can take anything for granted,” said Matthew Holmes, head of public policy at the Canadian Chamber of Commerce. “Just because we didn’t make it onto the science fair bristol board the last time doesn’t mean we won’t make it this time.”
Trump, argued Holmes, could issue the same letter he’s sent this week to Japan and South Korea, promising a 25 per cent tariff starting in August.
“I think there’s a risk he could do that. I wouldn’t be shocked,” said Holmes.
Trump on Monday placed a 25 per cent tax on goods imported from Japan and South Korea, citing persistent trade imbalances with the two crucial U.S. allies in Asia.
Trump provided notice of the tariffs to begin on Aug. 1 by posting letters on Truth Social that were addressed to the leaders of both countries. The letters warned both countries not to retaliate by increasing their own import taxes, or the Trump administration would further increase tariffs.
“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25 per cent that we charge,” Trump wrote in the letters to Japanese Prime Minister Shigeru Ishiba and South Korean President Lee Jae-myung.
White House press secretary Karoline Leavitt said at the daily news briefing that similar letters to a dozen countries would be issued on Monday. Following a now well-worn pattern, Trump plans to continue sharing the letters sent to his counterparts on social media and then mail them the documents.
While Canada is unlikely to be the recipient of one of those letters, nothing is impossible when it comes to the U.S. president’s negotiating tactics, said veteran trade lawyer John Boscariol.
“I wouldn’t put it past Trump to pull something of a surprise out of his hat like he did with the DST,” said Boscariol, head of the international trade law group at McCarthy Tetrault.
On June 27, Trump abruptly suspended trade talks with Canada, citing Canada’s Digital Services Tax, which large tech companies have lobbied heavily against. Just days later, Carney eliminated the DST, and the talks were back on.
Whether that surprise comes ahead of Wednesday’s end of the 90-day pause, or ahead of Carney’s July 21 deadline, Trump has shown an inclination to lob last-minute grenades into negotiations when he feels he’s not getting his way, Boscariol said.
“There’s nothing to stop him from doing something similar with another issue. That could be dairy, or it could be any other issue,” said Boscariol. “There definitely is a sense Trump is leveraging access to the U.S. market to get benefits in other areas.”
Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association, said he’s hopeful that a deal can be reached by July 21, given that Carney, Trump, U.S. Secretary of Commerce Howard Lutnick and Canada’s intergovernmental affairs minister Dominic Leblanc have been in close, frequent contact.
“I think the right people are talking. And they’re talking at a frequency for deals to happen,” said Volpe.
Still, he added, nothing is ever guaranteed.
“I think anything’s possible. While there’s a ton of overlap, there are some pretty specific places where we see things differently. All of those things are a risk if they’re not reconciled by the 21st,” said Volpe.
And, warned the Canadian Chamber of Commerce’s Holmes, Trump still isn’t lifting steel, aluminum or automotive tariffs, which are already hammering the Canadian economy.
“They are very clearly coming at very specific sectors of ours,” said Holmes.
With files from the Star’s wire services
