Friendly Fire Between Neighbours

"On Trade, and in other ways, also, they are among the worst Nations in the World to deal with."

"They feel entitled, and  yet, WE DON'T NEED CANADA, THEY NEED US!" 

"[Canada is one of the most] entitled [countries to deal with in terms of trade]."

"[Canada] wants the benefits of being a State, without being one." 

U.S. President Donald J. Trump

 

"As we drilled down, what we discovered was that what our understanding of what had been agreed to was quite different from what was showing up in the documents. When that kind of happens once or twice, it's kind of understandable, but when it happens consistently, and every interpretation is the most negative interpretation [then it] got to a point [where they walked away]."

"That's just something we could not accept [dispute over tariff of medium and heavy vehicles] because we want to protect the existence of an automotive assembly industry in Canada for cars, light trucks, you know, medium trucks and heavy duty trucks."

"We're disappointed. We worked hard, but at the end of the day, the terms that were put forward on a deadline -- that was created by the United States -- it didn't work for us."

"[The U.S.]  has changed its view of economic partnership [and] in the face of that, Canada, among other things, has said that we will look to diversify. So we have to ensure that any agreement we would come to with the United States does not constrain our ability to create trading relationships, open and free trading relationships with other jurisdictions."

"We're just not willing, at the end of the day, to accept terms that were unfair, uneconomic and actually, you know, called into question the reliability of the deal."

"Because you know one of the things that you'd hate to see happen is you agree on something and then, after agreeing to it, it gets undermined."

Mark Wiseman, Canadian ambassador to the United States 

President Trump's notional 'next up'

 

A range of issues contributed to the collapse of the trade talks between the U.S. and Canada. The written text of a potential deal failed to match what the Canadian side believed it had agreed to. Following the collapsed talks when the Canadian delegation walked away from a deal both sides felt would finally be the solution to the awkward, prolonged trade talks between the two neighbours, political and security allies and for the most part, longstanding friendly relationships, the U.S. took steps to apply a punishing 50 percent tariff on some $20 billion in Canadian goods.

 

Canada was faced with little option but to respond in kind, a retaliation that the U.S. warned would cost Canada even more once Canada's move takes effect on September 8. Further escalation of U.S. tariffs is now a certainty, although it remains unclear whether there will be a resumption of negotiations between    the present and the September 8 date. 

 

There was a dispute over tariff treatment of medium and heavy vehicles with the U.S. resisting cutting tariffs, despite Canadian negotiators explaining that they are produced by both General Motors Co. and Ford Motor Co., automakers with operations in Canada. That balking on reduced tariffs for those vehicles fits right into President Trump's oft-repeated urging for American manufacturing integrated with Canadian counterparts in shared production, be put to a stop, for U.S. companies to withdraw their Canadian presence and return to full manufacturing in the United States.

 

Richmond Plywood Corporation in Richmond, B.C., says it has paused its U.S. sales because importers won't pay the 50 per cent tariffs and the company can't absorb the cost. (Bhavjit Thandi)

 

Another contentious issue for Canada is the heavy tariffs on Canadian steel exports aluminum  and lumber. President Trump is fond of repeating that Canada has nothing that the U.S. needs or wants, but the United States has everything that Canada desires. Canadian electrical energy, oil and liquid natural gas exported to the United States is critical to American energy needs. Without Canadian steel and aluminum and lumber the costs of domestic architecture in the U.S. will deal a blow to U.S. consumers in higher construction costs for houses.

 

U.S. trade negotiators introduced another unexpected item when the demand was made that Canada pedal back on its search for alternative trade and export routes to other countries. Separate trade agreements with other nations to swerve away from total dependence of exporting Canadian goods and services to the United States did not sit well with the Trump administration. Other U.S. trade irritants are issues such as American spirits that are currently black-listed from entry to Canada in a retaliatory move against unfair trade practices that include new and growing tariff inclusions on goods meant to be protected under the Canada-U.S.-Mexico agreement (CUSMA).

 

The federal government is laying out its plan to hit the U.S. with dollar-for-dollar counter-tariffs that will impact around 700 different American products.  CTV

 

New issues brought to the negotiating table such as bilingual French-English signage on U.S. exports to Canada have surprisingly cropped up, when for as long as trade has existed between the two countries the two official language requirements for export to Canada have been routine. "It is non-negotiable, in terms of our ability to protect - and to not just protect, but to be able to enhance and grow the French language in Canada, in Quebec and in the rest of Canada. Those that want to do business in Canada, be it digital or anything else, must respect that fundamental reality", observed Ambassador Wiseman. 

 

President Trump's constant goading of Canada, referring to the nation as the 51st State, calling its prime ministers 'governors', his AI-assisted videos with the U.S. flag superimposed over the northern half of North America, his complaints that Canadians for some unknown reason don't care for his style, have not endeared him to the Canadian public. As a result of the new U.S. tariffs imposed on Canada, 87,000 Canadian jobs have been placed at risk and the Canadian unemployment rate bloat to 6.8.

 

Canada is prepared to respond with counter tariffs on U.S. steel, dairy, appliances, electronics and other products. Canada's economy will be hurt, and it won't take very much longer before the American economy too will feel the pain. Canada exported $454 billion in goods and services to the U.S. last year, much of it in energy, while importing $426 billion, according to U.S. Commerce Department data. 

 

"We're going to need a suite of programs, probably not unlike we did through the COVID era, to support working people and the industries that they depend on", observed Lana Payne, national president of Unifor, representing workers in the automotive as well as other sectors in Canada. 

 

"The last thing we need right now, as our economy is getting back on its feet, is a trade war with Canada". opined former Trump earlier administration vice-president Mike Pence. 

 

Ottawa announced new support support for workers and businesses facing U.S. tariffs. CTV