Canadian trade negotiators are working around the clock to avoid the imposition of crippling 50 percent duties by the Trump administration, but the two sides appear to be at an impasse.
Set to take effect on Wednesday, the duties, imposed under Section 338 of the Tariff Act of 1830, will impact 550 product categories including motor vehicles, alcohol and dairy.
President Donald Trump said he leveraged the trade statute to offset relative trade disadvantages for U.S. exporters created by Canadian policies, specifically related to American autos and auto components. And amid the tariff tension, all but two Canadian provinces have also halted purchases and distribution of American-made spirits.
According to Canadian news outlet CBC, the U.S. has proposed reducing existing auto tariffs from 25 percent to 15 percent—or even lower if the cars include more American content. However, Canadian auto makers worry that conceding to a rate of even 7.5 percent would give the U.S. the ability to permanently impose auto tariffs that undermine the terms of the U.S.-Mexico-Canada Agreement.
Meanwhile, Canadian officials have said they’re encouraging the provinces to resume sales of American spirits as a means of appeasing the U.S. government and pushing trade to resume.
Should the tariffs take effect on Wednesday, $20 billion in Canadian products would be impacted, amounting to more than 5 percent of the $383 billion in products the U.S. imported from Canada last year.
Canadian trade minister for U.S. relations Dominic LeBlanc and chief trade negotiator Janice Charette traveled to Washington, D.C. last week, staying over the weekend to continue negotiations. On Monday, they met with U.S. Trade Representative Ambassador Jamieson Greer and Commerce Secretary Howard Lutnick.
“Our job is not yet done,” LeBlanc said after the two-hour sitdown, according to the Canadian Press News. According to the outlet, Prime Minister Mark Carney aims to speak with Trump before the clock runs down on the Wednesday deadline.
“We are involved in very delicate and intense negotiations, this is not the time to negotiate in public,” Carney said Monday, according to CBC. “We are in the middle of a negotiation, and we are coming into those negotiations from a position of strength.”
Carney told reporters that he is prepared with a potential plan for any situation that may arise from the trade talks.
Greer last week told reporters at the Iowa State Fair that Canadian provinces must lift any bans on U.S. alcohol sales and revamp dairy procurement rules if the countries are to reach consensus.
“Any potential resolution has to include all of these, or a pathway forward for them,” he said.
