Trade Talks With Canada Collapse, Trump Will Seriously Regret This

Trump puts 50 percent tariffs on select goods. Canada will retaliate.

Trade Talks Fail

The Wall Street Journal reports U.S. Imposes 50% Tariffs on Some Canadian Goods After Last-Ditch Talks Fail

Trade talks between the U.S. and Canada broke down on Friday, officials from both countries said, paving the way for the U.S. to impose 50% tariffs on about $20 billion worth of Canadian goods early on Saturday and risking escalation into an all-out trade war.

However, U.S. Trade Representative Jamieson Greer told reporters that talks failed on Friday night, despite what he said was the Trump administration’s willingness to offer Canada the “best treatment” of any major U.S. trading partner. Without a deal, the new tariffs, which apply to about 5% of Canada’s U.S.-bound exports, went into effect at 12:01 a.m. on Saturday.

Carney, conversely, said Friday that last-minute changes from the U.S. side “were unfair, uneconomic, and called into question the reliability of any deal.” He said that he would impose dollar-for-dollar retaliatory tariffs on U.S. goods and introduce support for Canadian workers in the coming days.

“In recent weeks, we made important progress toward improving Canada’s position as having the best deal in the world with the U.S.,” Carney said in a statement. “However, that progress has not been enough to meet our objectives for Canadians.”

Many of Canada’s recent trade actions against the U.S. were put in place in retaliation for earlier levies imposed by Trump, including his sector-specific levies of up to 50% on automobiles, steel, aluminum and forest products. Though most Canadian exports have avoided those duties because they complied with the U.S.-Mexico-Canada Agreement, the new round of tariffs doesn’t exempt such products.

The 11th-hour collapse in negotiations injects fresh tension into a bilateral relationship between traditionally close allies that has rarely been worse. Since returning to the White House, Trump has put Canada in his crosshairs, imposing tariffs on its goods, threatening to use “economic coercion” to make it the 51st state and calling its prime ministers “governor.” The tariffs and threats against Canada’s sovereignty have enraged Canadians, many of whom have boycotted U.S. travel and products.

Polls show most Canadians support taking a hard-line approach in trade talks, even if it prolongs economic hardship. Just 18% back making concessions to get a deal, according to an Abacus Data survey this week.

Carney Responds

Please consider a Statement by Prime Minister Carney on Canada-U.S. trade negotiations

“Over the past 18 months, Canada’s new government has focused on building our strength at home, diversifying our partnerships abroad, and striking a fair deal with the United States.

Our objectives in our trade negotiations have been to:

• Preserve tariff-free access to the U.S. for the vast majority of Canadian business;
• Provide greater stability to our trade relationship;
• Significantly reduce U.S. tariffs on our key strategic industries, so that Canadian businesses in these sectors would have the best access of any in the world;
• Protect our small and medium-sized businesses – the lifeblood of our economy – including by removing the imminent threat of new tariffs; and
• Maintain our flexibility, independence, and sovereignty so we can keep building the Canada we want.

We have recognised from the beginning that America has changed, and that we will not return to our old relationship. Our government understood, before many, that America is altering all its trade relationships. Putting tariffs on its closest allies and charging for access to its vast market.

We have worked in that context. To strike a fair deal that would provide the best access to the U.S. market and greater certainty to Canadian businesses and workers. Throughout, our goal has been to secure the best deal for Canadians, never a deal at any price or on any deadline.

In recent weeks, we made important progress toward improving Canada’s position as having the best deal in the world with the U.S.

However, that progress has not been enough to meet our objectives for Canadians. As a result, this evening, I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa. They have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute. However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal.

At midnight tonight, the U.S. intends to impose a 50% tariff on roughly $28 billion of Canadian goods. Canada will match those tariffs dollar for dollar to protect our workers and businesses.

In the coming days, the government will introduce additional measures to support Canadian workers and businesses, building on the nearly $25 billion in support provided over the past 18 months.

These actions complement Canada’s core economic strategy. From day one, we have been focused on building our strength at home and diversifying our partnerships abroad.

That strategy is working. We are advancing nearly $500 billion in major infrastructure projects. In parallel, we are unlocking new export markets for Canadian businesses. Our existing free trade deals already provide Canada with preferential access to 1.5 billion consumers, and we are on track to double that market access by the end of this year.

Canadian economic growth is accelerating, and we are on course to have the second-fastest growth in the G7 over the next two years. Our economy is creating jobs at four times the rate of the United States. Our exports to non-U.S. markets are on track to double over the next decade. Foreign direct investment in Canada is at its highest level in two decades, running at twice the rate of our nearest G7 competitor. Canada now ranks as the most attractive country in the world for infrastructure investment.

Canada has what the world wants. And we will not allow any nation to determine our future. We will set our own course to keep building Canada strong for all.”

Books Will Be Written

That’s an excellent interview. Play it.

Why Bullying Doesn’t Work

A Lose-Lose Proposition

Trade wars are a lose-lose proposition.

I have many times stated that the correct response to tariffs is to lower them to zero no matter what other nations do.

I now wonder if that applies when dealing with an economic idiot who does not honor any deal he makes, and always wants more.

The question is moot however, because politically speaking it is impossible to not retaliate.

In this case, only 18 percent of Canadians don’t want Carney to respond.

What Trump Understands

The only thing Trump understands is force.

Trump has backed down on China every time China responded to his tariffs by cutting off rare earth elements and magnets.

Due to the political requirement to retaliate, Carney needs to smack Trump in the face as hard as he can with an economic 2 by 4.

An export ban on Canadian oil to the US and/or a ban on Canadian auto parts to the US would do exactly that. Then we would see how Trump deals with $7.00 diesel and no cars for sale.

Because some Canadian oil exporters are shut down for scheduled repairs, the price of diesel is poised to blast higher anyway.

However, I would prefer to see Carney give Trump a swift smack to the face with that 2 by 4.

Iran shows the way. Now it’s Canada’s chance.

Dear Mark Carney, please shut off all oil and car parts to the US and let Trump deal with it.

Trump would be demanding renegotiations in about one hour flat.

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