{"id":18856,"date":"2025-06-27T10:52:09","date_gmt":"2025-06-27T10:52:09","guid":{"rendered":"https:\/\/www.europesays.com\/us\/18856\/"},"modified":"2025-06-27T10:52:09","modified_gmt":"2025-06-27T10:52:09","slug":"as-u-s-trade-deal-deadline-looms-ottawa-begins-to-temper-expectations","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/18856\/","title":{"rendered":"As U.S. trade deal deadline looms, Ottawa begins to temper expectations"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

There\u2019s a growing sense in the business community and among trade experts that U.S. President Donald Trump is unlikely to remove all the tariffs he\u2019s placed on Canadian goods.BRENDAN SMIALOWSKI\/AFP\/Getty Images<\/p>\n

Two weeks into intensive trade negotiations with the United States, Canada remains publicly committed to the goal of getting all tariffs removed. Nevertheless, Ottawa is beginning to manage expectations.<\/p>\n

Kirsten Hillman, Canada\u2019s ambassador to Washington and lead trade negotiator, highlighted President Donald Trump\u2019s<\/a> unwavering fondness for tariffs in several media interviews this week. <\/p>\n

Several business leaders and industry representatives, who\u2019ve had conversations with Canada\u2019s negotiating team, say they\u2019ve been asked what level of tariffs they could live with. The Globe and Mail is not naming them so they could speak freely. <\/p>\n

The details of the discussions between Ottawa and Washington, which kicked into high gear this month following a meeting between Mr. Trump and Prime Minister Mark Carney<\/a> at the G7 summit<\/a>, remain a tightly held secret. One business leader, who has consulted with the Canadian team, likened Mr. Carney\u2019s approach to how investment bankers run M&A deals: only a handful of people have access to the terms, and secrecy is paramount.<\/p>\n

But as negotiators sprint toward a self-imposed July 21 deadline, there\u2019s a growing sense in the business community and among trade experts that Mr. Trump is unlikely to remove all the tariffs he\u2019s placed on Canadian goods in recent months \u2013 no matter what Ottawa puts on the table.<\/p>\n

Canada must not accept any trade deal that includes auto tariffs, head of Unifor says<\/a><\/p>\n

Canada refuses to pause digital sales tax as trade talks with U.S. continue Friday<\/a><\/p>\n

\u201cFree trade is no longer free. It comes with a subscription cost, and the subscription cost is a tariff,\u201d said Goldy Hyder, president and chief executive officer of the Business Council of Canada.<\/p>\n

Mr. Trump has de-escalated his global trade war in recent months. He paused the \u201creciprocal tariffs\u201d he placed on more than 50 countries (excluding Canada and Mexico) for three months, and introduced several important tariff carve-outs for Canadian and Mexican goods. Dozens of countries are now negotiating with the U.S. to secure a more permanent reprieve, with the July 9 \u201creciprocal tariff\u201d deadline rapidly approaching.<\/p>\n

Still, the President seems committed to tariffs at some level \u2013 both as leverage to extract nontrade concessions from other countries, such as higher spending on defence or border security, and as a permanent tool to raise tax revenue and cajole foreign companies to build factories in the U.S.<\/p>\n

Indeed, more tariffs are already in the pipeline. The U.S. has launched investigations into lumber, copper, semiconductors and pharmaceuticals under Section 232 of the Trade Expansion Act, which could result in sectoral tariffs similar to those on steel, aluminum and autos. <\/p>\n

\u201cA short-term agreement that creates certainty around tariff levels and minimizes what those levels are ought to be a realistic landing zone, so long as such an agreement checks the box for some other key priorities,\u201d Jake Colvin, president of the National Foreign Trade Council, which advocates for U.S. companies, said of the Canada-U.S. talks.<\/p>\n

\u201cBut given President Trump\u2019s strongly held belief in tariffs, it may be unrealistic to expect that tariffs will completely revert to what they were in 2024.\u2033<\/p>\n

A more realistic outcome in the near-term, observers say, could be a partial reduction in the existing Section 232 tariffs, alongside quotas that allow a certain amount of steel, aluminum and automobiles to enter the U.S. tariff-free or at a lower tariff level.<\/p>\n

That would resemble the arrangement British Prime Minister Keir Starmer signed with the Trump administration last month, which lowered tariffs on some sectors and introduced quotas for cars and beef, but left a baseline 10-per-cent tariff in place.<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

British Prime Minister Keir Starmer and the Trump administration signed an arrangement that left a baseline 10-per-cent tariff in place.Kevin Lamarque\/Reuters<\/p>\n

\u201cThe Brits, depending on your perspective, fortunately or unfortunately, set the standard. Not only did they agree to quotas, but they agreed to tariffs within the quotas. And that makes negotiating against that a difficult position for other countries around the world,\u201d said Daniel Ujczo, a trade lawyer with U.S. law firm Thompson Hine LLP.<\/p>\n

He said that U.S. officials he has spoken with show a clear preference for some sort of quota system, which could vary by industry. <\/p>\n

\u201cWhen we\u2019re looking at goods such as aluminum on which the U.S. is heavily reliant, it is reasonable to expect that the quota would be based on existing volumes plus some room to grow on,\u201d Mr. Ujczo said. \u201cI think automotive becomes a bit more challenging, given the administration\u2019s views that it wants final assembly in the United States.\u201d<\/p>\n

Steel tariffs, meanwhile, are widely seen as the hardest nut for Canada to crack, given the strength of the U.S. steel lobby and the fact that the U.S. industry has capacity to ramp up production to meet domestic needs \u2013 unlike with aluminum. <\/p>\n

Whether any of this would be acceptable to Canada remains to be seen.<\/p>\n

\u201cOur government believes that open and stable trade between Canada and the United States is deeply beneficial to both countries, and we are confident that we can reach a trade deal with the U.S. Administration within the 30-day period,\u201d said Gabriel Brunet, a spokesperson for Dominic LeBlanc, the minister responsible for Canada-U.S. trade. <\/p>\n

\u201cTo that end, Minister LeBlanc and Ambassador Hillman are in regular conversation with their U.S. counterparts to make Canada\u2019s case for the removal of tariffs on Canadian goods. At the same time, we are focused on building here at home.\u201d <\/p>\n

Mr. Trump\u2019s tariffs are a breach of U.S. obligations under the United States-Mexico-Canada Agreement, the free-trade deal that Mr. Trump himself negotiated during his first term in office. Agreeing to keep some levies in place could make it hard to proceed with USMCA renewal discussions, which are currently scheduled for 2026, said Meredith Lilly, professor of international economic policy at Carleton University and a former trade adviser to prime minister Stephen Harper.<\/p>\n

Moreover, a hastily arranged deal could leave Canada exposed to the future whims of Mr. Trump. <\/p>\n

Unlike a typical trade agreement, which is hashed out over years by hundreds of lawyers and bureaucrats agonizing over every detail, the kind of deal Mr. Trump signed with Britain in May is of questionable legality and could be hard to enforce.<\/p>\n

Prime Minister Mark Carney says Canada is ready to enact new steel and aluminum counter measures against the U.S. if a trade deal is not finalized by July 21, the end of the 30-day negotiation period.<\/p>\n

The Canadian Press<\/p>\n

\u201cIn many ways that\u2019s more of a framework for co-operation and negotiation, but I really doubt that it is a legally binding agreement,\u201d Prof. Lilly said. \u201cI almost think of it as a bit of a back-of-the-napkin type of document.\u201d<\/p>\n

The right place to deal with long-standing grievances, over things such as access to Canada\u2019s supply managed dairy market, broadcast restrictions or auto content rules, is in the USMCA discussions, Prof. Lilly said. <\/p>\n

At least one issue likely won\u2019t be able to wait. Canada\u2019s Digital Services Tax, which would see Ottawa collect billions in taxes from U.S. internet companies, comes into force next week. <\/p>\n

\u201cYou can\u2019t have the Canadian government collecting more than $2-billion American dollars from American companies and expect the relationship to improve in the short term,\u201d said Mr. Colvin of the National Foreign Trade Council.<\/p>\n

Ultimately, Ottawa is lacking leverage in the negotiations, experts said. Canada\u2019s countertariffs don\u2019t appear to be biting particularly hard, domestic opposition to tariffs in the U.S. is muted and, so far, U.S. economic data has been fairly robust, while inflation has remained in check. <\/p>\n

Mr. Carney has been trying to strengthen his hand in real time. Since becoming Prime Minister, he has sought a deal with Mr. Trump that goes beyond trade to address common defence and security concerns. <\/p>\n

The decision to ramp up military spending and discuss joint participation with the U.S. on Mr. Trump\u2019s \u201cGolden Dome\u201d missile defence system appears to be designed to grease the wheels of a trade deal. <\/p>\n

Carney commits Canada to biggest increase in military spending since Second World War, doubling budget by 2035<\/a><\/p>\n

The same goes for Mr. Carney\u2019s efforts to accelerate the development of Canada\u2019s critical minerals resources. Right now the U.S. relies heavily on Chinese-controlled mines and processing facilities for a number of crucial inputs into its high-tech and defence industries. Mr. Carney is pitching Canada, with its robust store of minerals, as a safer alternative. <\/p>\n

It\u2019s unclear whether U.S. access to Canadian critical minerals would be formalized in some sort of agreement. The U.S. Department of Defence already invests in Canadian mines directly, and Canada has signed an agreement on critical minerals with the European Union that could be a template.<\/p>\n

Finally, there are Canada\u2019s efforts to close ranks with the Americans to prevent cheap Chinese imports from flooding North American markets. Canada matched U.S. tariffs on Chinese electric vehicles during the final months of Joe Biden\u2019s presidency. More recently, it has slapped tariffs and quotas on Chinese steel, partly to protect the Canadian market and partly to address U.S. concerns about Chinese steel being routed through Canada. <\/p>\n

\u201cI want to emphasize you do not get a seat at the table for one of these deals without agreeing to take action against China,\u201d Mr. Ujczo said. <\/p>\n

Canada is making the right moves on all these fronts, said Christopher Sands, director of the Hopkins Center for Canadian Studies at Johns Hopkins University. And many of the things Canada is now doing to get in Mr. Trump\u2019s good books \u2013 taking a more active role in Arctic defence, or speeding up critical mineral development, for instance \u2013 are things that Canada should have been doing anyway, he said. <\/p>\n

But Mr. Carney and his team are ultimately playing defence in a game they don\u2019t control. <\/p>\n

\u201cThis is the way the President likes it, you keep guessing what he wants and coming up with more until he finally goes, \u2018Yeah, okay,\u2019\u201d Mr. Sands said. \u201cIt\u2019s like the cat playing with the mouse: Okay, I played with this mouse enough. I\u2019ll let it go. Or I\u2019ll eat it.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: There\u2019s a growing sense in the business community and among trade experts that…\n","protected":false},"author":3,"featured_media":18857,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[2147,17837,50],"class_list":{"0":"post-18856","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-canada","9":"tag-e-ny","10":"tag-news"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114754954672447571","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/18856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=18856"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/18856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/18857"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=18856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=18856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=18856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}