COMMENTARY: Canada is facing 35% tariffs. Now what?
As the second half of summer kicks off and the Aug. 1 deadline set by United States President Donald Trump has passed, Canada doesn't seem any further ahead on making a trade deal with the U.S.
Prime Minister Mark Carney has long said that any deal must benefit Canada; the fact that no deal has emerged suggests the government has yet to see something that meets this condition.
In July, Ipsos asked Canadians whether they thought Trump was bluffing, and 36 per cent of Canadians said they believed he was. Trump, it turns out, wasn't bluffing. The president's announcement of a 35 per cent tariff on non-CUSMA-compliant goods came into force as of Aug. 1.
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How long these punitive tariffs — layered on top of additional aluminum, auto and forestry tariffs — will last remains to be seen. What is clear now is that we are in uncharted waters leading up to the fall, when Parliament returns, with 'national security' a catch-all for more U.S. tariffs.
Canada's negotiating position seemed to be complicated by Carney's announcement that Canada would recognize a Palestinian state in September, subject to some conditions — at least according to a Truth Social post from the president.
Trump immediately linked that decision with the declining chance of a trade deal, further underlining that every action Canada takes could be tied to decisions about tariffs.
Carney may have done this to give both sides an out. If he fails to keep Canada's 'elbows up,' it will invite criticism from every side of the political spectrum.
Still, Carney seems to have the public on his side.
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Ipsos has tracked Canadians' views on the relationship with the U.S. since February, and our latest Trump, Tariff and Turmoil results show that trust has been broken for some time.
In February, 57 per cent of Canadians agreed 'we can never trust the Americans the same way again.'
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In July, that number stood at 59 per cent, and that was before the president unleashed tariffs on Canada.
Some in the Trump administration seem to have been confused by Canada's reaction. U.S. ambassador Pete Hoekstra has said that he still doesn't fully understand how personal and aggressive some Canadians have become on this issue.
But the data makes it clear the answer isn't a big mystery.
In addition to feeling like trust has been broken with the U.S., Canadians feel the relationship is rapidly deteriorating.
In July, two-in-three Canadians (63 per cent) felt the relationship between Canada and the U.S. had gotten worse over the period prior to the poll, and again, this was before the latest developments.
Close to half (48 per cent) say they've bought fewer products made in the United States, or stopped buying American products altogether, led by baby boomers (65 per cent). In June, we found that boomers continue to be the generation who are most likely to boycott travelling to the U.S. (42 per cent).
Nonetheless, Canadians do have some belief that the American administration does not represent American companies. Over half (53 per cent) say if a company is American-owned but makes its products in Canada, it's OK to support them.
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That measure has steadily risen since February, when only 42 per cent held that view.
Canadians appear to have taken a nuanced view of the current dispute, despite their evident anger and confusion at the administration for what many see as a betrayal by their closest ally and friend.
In the recent words of former prime minister Stephen Harper, 'That is something we can't forget.'
Harper recently called for expanding Canada's trade markets to other nations, an opinion that is shared by Canadians, who wholeheartedly agree, with many saying that Canada's future is better served by aligning with like-minded countries in Europe rather than the U.S.
Of course, this is easier said than done.
In the dog days of summer, Carney has a serious challenge ahead of him. He has opted not to make what he and his team consider a bad deal for Canada, concluding that no deal is better than a bad one, despite the uncertainty it brings.
Carney now has a variety of options before him.
He can levy further retaliatory tariffs on the U.S. — something he's avoided so far, but something 60 per cent of Canadians agree with, even if it means paying more for things.
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He can simply do nothing and hold out, hoping that Canadian businesses can absorb the new non-CUSMA tariffs, or even offer further bailouts to affected businesses.
Or he could fold and sign a short-term deal.
Most likely, Carney will play for time and give himself a chance to find new markets and negotiate a new deal.
When this all started in February, the goal was clearly a zero-tariff agreement. That option does not appear to be on the table any longer, as countries sign deals with baseline tariffs far lower than what Canada now faces.
It's clear tariffs are here to stay. Canadians need to buckle up and prepare for further turmoil.
Going into the fall, when Parliament returns, things will be messy.
The prime minister needs to use the time he has to land an impossible compromise that Canadians will support, and that may be the most difficult task of all.
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Globe and Mail
39 minutes ago
- Globe and Mail
Letters to the editor, Aug. 10: ‘Canada should now take all concessions off the table … it is time to be tough against a tyrant'
Re 'Poilievre says Carney has failed with Trump, urges narrow countertariffs' (Aug. 8): I worry that Canada might capitulate to bullying from Washington like so many other countries have done. From my perspective, Canada should now take all concessions off the table, including elimination of the digital services tax. Canada should also impose tariffs on non-USMCA-compliant vehicles and other goods from the United States. Hit back on any other items that can generate revenue to compensate our people from the impact of tariffs, including energy and oil and gas. Perhaps Canada and Britain can reach a deal on steel. Both countries export to the U.S; if what each country makes complements the loss of U.S. trade, it could be win-win. It is time to be tough against a tyrant. Bullies are encouraged by acquiescence. Fawning is disgusting and encourages him. Janet Henley St. John's Re 'Carney announces $1.2-billion in lumber industry supports' (Report on Business, Aug. 6): Get around U.S. softwood tariffs by going metric. Years ago, we went metric for weights and measurements at great expense, for little payback. There would certainly be costs involved, but if we went metric on softwood manufacturing, then the world would be our market and not just the United States. We would lose the U.S. market, but then, as Donald Trump said, they 'don't need anything Canada has.' Frank Best Collingwood, Ont. Re 'Trump's firing of economic data collector raises alarm' (Aug. 4): Examples from Greece, China, and Argentina of the disastrous results of political interference in non-political institutions are helpful. But we don't have to look far to see similar examples much closer to home. Not long ago, the Harper government didn't seem to like the policy implications of demographic information, so the long-form census was cancelled; for similar reasons, scientific input into public discourse was silenced. And there are more current provincial examples of attacks on public institutions and processes. Institutional interference that serves only political purposes is always corrosive. It is well and good to be reminded of this by observing the international experience. However, that does not obviate the need to be aware of the same phenomena, past and present, occurring right here. Kent Sargeant Calgary Re 'How Norway cracked the electric-vehicle code' (Aug. 1): Here's one way to shift to more electric vehicles. Fully charged EV batteries should be modular and available for exchange at gas stations. It should take less than one minute when all EVs are designed for quick battery replacement. The removed batteries should then be sent to large central facilities that refurbish and recharge them, then send them back to services stations. Motorists don't own the batteries; the cost could be added to monthly electricity bills. This method would require little new infrastructure and no need for motorists to replace expensive long-term batteries. 'Refuelling' times would be faster than filling a tank with gasoline. Frank Foulkes Professor emeritus, department of chemical engineering and applied chemistry, University of Toronto Re 'What's in a number?' (Letters, Aug. 2): Several correspondents have argued strongly for lowering the voting age to 16. That, by lowering the voting age, democracy is strengthened. That, in particular, it is our youth who will have to live with the downstream results of today's political decisions. And, at present, the future has no vote. So why stop at 16? Since those under 16 have even more riding on the future, their votes should be cast by their mothers, acting on their behalves. I guarantee child poverty and related issues would be cleared up within a couple of election cycles. Just look at what the senior vote did for my demographic. Here is an opportunity for Canada to show the world we take the future of our youngsters very seriously. Allan Portis Toronto Re 'A long ballot satire within satire' (July 30): So the Longest Ballot Committee believes that election laws would be better made by a citizens' assembly. Why stop there? Given the issues with electoral politics on every file, why not turn Parliament itself into a citizens' assembly – that is, appoint members by random lottery? (The modern term for this is sortition.) If they want real democracy, regardless of leaning left or right, return democracy to its roots: This is how officials were appointed in ancient Athens, where elections were deprecated by Aristotle as a recipe for oligarchy. People on juries act seriously. It can work in Parliament, too. Mark Tilley Middlesex County, Ont. Re 'Vancouver mourns the loss of its iconic Kitsilano Beach log' (Aug. 2): While I understand the city's concern for safety, the removal of the beloved giant driftwood from Kitsilano Beach without thought for the community has truly left us saddened. For generations, this magnificent piece served as a play area for children, a sunset gathering spot for friends and families and no less a peaceful place for meditation for many of us. It wasn't just a piece of wood, it was a keeper of memories and a symbol of community connection. It's not too late to commemorate this driftwood's profound impact. I urge Vancouver officials to work with residents to create a meaningful legacy, be it through an art installation, a memorial plaque, poetry embedded nearby or ultimately a safe, remodelled structure that pays tribute to the original. Beryl Woodrow Vancouver Re 'Cleaning after my mother's death taught me about what can't be replaced' (First Person, Aug. 1): I, too, despaired at the task of cleaning out my mother's home after she died almost two years ago. My mom was also an organized 'keeper.' When I would gently chastise her for the multiple accumulated notepads, or stacks of balls of wool we'd come across while valiantly searching for some other crucial item, she'd smile and say, 'I will use them one day!' I'm now ashamed that this occasionally annoyed me. (I did, surreptitiously, do away with my childhood Encyclopedia Britannica set. I'm sure she noticed, but didn't say a word.) The smallest things made my heart skip a beat when I came across them after her death: her favourite lipstick tucked in the back of a drawer, a delicate and frayed silk scarf not worn for years, a copy of a note to a dear friend. I carry one of her many handwritten shopping lists-bookmarks in my wallet. Andrea Cooper Murphy Toronto Letters to the Editor should be exclusive to The Globe and Mail. Include your name, address and daytime phone number. Keep letters to 150 words or fewer. Letters may be edited for length and clarity. To submit a letter by e-mail, click here: letters@
CBC
40 minutes ago
- CBC
Carney says Canada's trade with U.S. is mostly tariff-free. But that's not the whole story
It's become a common refrain when Canadian politicians are asked about retaliatory measures or negotiations in the ongoing trade war: 85 per cent of Canada's trade with the U.S. is "tariff-free." Prime Minister Mark Carney said as much on Tuesday and again on Friday, when pressed for information about his next salvo in the dispute with the U.S. after President Donald Trump imposed 35 per cent tariffs on Canadian goods that aren't compliant with the Canada-U.S.-Mexico Agreement (CUSMA). "We're in a situation right now where 85 per cent of our trade with the United States is tariff-free," Carney told reporters at a news conference in Trenton, Ont., on Friday. But "85 per cent" only roughly describes Canada's exports to the U.S. which have the potential to qualify for exemptions under CUSMA — not the proportion of exports that is actually spared from Trump's tariffs. Citing that percentage alone understates the costs Canadian businesses are facing as Trump imposes more tariffs, argues Tyler Meredith, founding partner of the policy-based public affairs firm Meredith Boessenkool & Phillips. U.S. Census Bureau data shows that last year, only about 38 per cent of U.S. imports from Canada were traded under CUSMA provisions. Data on how many Canadian companies are CUSMA-compliant is not readily available. An analysis of the effect of tariffs by the Yale Budget Lab published on Thursday assumed that 50 per cent of Canada's exports to the U.S. are now certified. Meredith says applying for CUSMA exemptions can be a daunting process for small businesses. But he said that faced with higher tariffs, they may be considering either taking on the costs of certification — or looking at markets beyond the U.S. "We are one of the most trade-dependent on the United States of any developed country," said Meredith, a former economic adviser to the Trudeau government. "If the consequence is that trade overall falls, as we are seeing now in the data, that's going to be a cost that we disproportionately bear relative to other countries." Prior to Trump's tariffs, Canadian exporters could trade with the U.S. under Most Favoured Nation (MFN) status. That allowed them to trade with very low tariffs — or none at all — without registering for preferential treatment under CUSMA. All World Trade Organization (WTO) members, such as Canada, have MFN status when trading with each other. How do Canadian goods get preferential treatment? Products are certified CUSMA-compliant if they meet the agreement's rules of origin. Their eligibility is determined on a case-by-case basis since they must meet product-specific requirements. A certain amount of the product needs to be made in Canada with Canadian inputs to qualify for an exemption. Steve Mallia, owner of Starfield Optics, a Toronto-based manufacturer of telescopes and accessories, said registering his small business for CUSMA benefits "wasn't a priority" until Trump began threatening Canada's sovereignty and economy in January. "We saw our orders dry up literally overnight so we knew we had to make a change," said Mallia, who runs the business with his wife Natalie. His only other employees are a part-time bookkeeper and a chartered accountant, he said. In the past eight months, Mallia has been researching the process for claiming preferential treatment under CUSMA — without the same legal resources as a large corporation. The experience has made him feel that "the little guy" is being forgotten by the Canadian government during the trade war, he said. "This is the part that takes up a lot of time and costs money," Mallia said. "The last thing I want is to ship something and then, you know, customs gets ahold of [the product] and they go, 'You know what? He didn't use the right colour ink.'" Since March, more Canadian exporters reported that they would absorb tariff costs or raise prices than apply for relief through Canada's remission program, according to a report published in July by the Canadian Federation of Independent Business (CFIB). In exceptional circumstances, the federal program grants companies relief from the payment of tariffs applied as of March 4 on products from the U.S. or issues refunds for tariffs already paid. The federation, which advocates for the interests of small businesses, surveyed its members about the actions they have taken to mitigate risks during the trade war. Why not fire back with more counter-tariffs? Carney was asked on Tuesday whether he would retaliate against the U.S. with a new tariff rate, days after failing to reach a deal by the Aug. 1 deadline. "We've always said we will apply tariffs where they had the maximum impact on the United States and minimum impact in Canada," he said. Unlike most countries subjected to Trump's tariffs, Canada has a comprehensive trade agreement with the United States in CUSMA. U.S. tariffs kick in for dozens of countries, sparking protests, outrage 2 days ago More than 60 countries were hit with U.S. President Donald Trump's latest wave of tariffs on Thursday. Despite global backlash and signs his own economy is taking a hit, Trump continues to promise even steeper tariffs ahead. The country is also one of few to have retaliated against the U.S. in response to Trump's economic disruption, a step Canada took before the U.S. targeted virtually all of its global trade. Wednesday, Trump threatened to hit goods imported from India with a total of 50 per cent tariffs, citing New Delhi's continued purchases of Russian oil. And Trump imposed tariffs on dozens of countries' exports last week through an executive order. Tariffs now vary between 10 per cent for the U.K. and 41 per cent on war-torn Syria. That same order brought the total tariff rate of Brazil — Latin America's largest economy — to a staggering 50 per cent.
Winnipeg Free Press
5 hours ago
- Winnipeg Free Press
Russia and Ukraine hold fast to their demands ahead of a planned Putin-Trump summit
The threats, pressure and ultimatums have come and gone, but Russian President Vladimir Putin has maintained Moscow's uncompromising demands in the war in Ukraine, raising fears he could use a planned summit with U.S. President Donald Trump in Alaska to coerce Kyiv into accepting an unfavorable deal. The maximalist demands reflect Putin's determination to reach the goals he set when he launched the full-scale invasion of Ukraine on Feb. 24, 2022. Putin sees a possible meeting with Trump as a chance to negotiate a broad deal that would not only cement Russia's territorial gains but also keep Ukraine from joining NATO and hosting any Western troops, allowing Moscow to gradually pull the country back into its orbit. The Kremlin leader believes time is on his side as the exhausted and outgunned Ukrainian forces are struggling to stem Russian advances in many sectors of the over 1,000-kilometer (over 600-mile) front line while swarms of Russian missiles and drones batter Ukrainian cities. Ukrainian President Volodymyr Zelenskyy also has stood firm in his positions, agreeing to a ceasefire proposed by Trump while reaffirming the country's refusal to abandon seeking NATO membership and rejecting acknowledgment of Russia's annexation of any of its regions. A look at Russian and Ukrainian visions of a peace deal and how a Putin-Trump summit could evolve: Russia's position In a memorandum presented at talks in Istanbul in June, Russia offered Ukraine two options for establishing a 30-day ceasefire. One demanded Ukraine withdraw its forces from Donetsk, Luhansk, Zaporizhzhia and Kherson — the four regions Moscow illegally annexed in September 2022 but never fully captured. As an alternate condition for a ceasefire, Russia made a 'package proposal' for Ukraine to halt mobilization efforts, freeze Western arms deliveries and ban any third-country forces on its soil. Moscow also suggested Ukraine end martial law and hold elections, after which the countries could sign a comprehensive peace treaty. Once there's a truce, Moscow wants a deal to include the 'international legal recognition' of its annexations of Ukraine's Crimean Peninsula in 2014 and the four regions in 2022. Russia says a peace treaty should have Ukraine declare its neutral status between Russia and the West, abandon its bid to join NATO, limit the size of its armed forces and recognize Russian as an official language on par with Ukrainian -– conditions reflecting Putin's earliest goals. It also demands Ukraine ban the 'glorification and propaganda of Nazism and neo-Nazism' and dissolve nationalist groups. Since the war began, Putin has falsely alleged that neo-Nazi groups were shaping Ukrainian politics under Zelenskyy, who is Jewish. They were fiercely dismissed by Kyiv and its Western allies. In Russia's view, a comprehensive peace treaty should see both countries lift all sanctions and restrictions, abandon any claims to compensation for wartime damage, resume trade and communications, and reestablish diplomatic ties. Asked Thursday whether Moscow has signaled any willingness to compromise to make a meeting with Trump possible, Putin's foreign affairs adviser Yuri Ushakov responded that there haven't been any shifts in the Russian position. Ukraine's position The memorandum that Ukraine presented to Moscow in Istanbul emphasized the need for a full and unconditional 30-day ceasefire to set stage for peace negotiations. It reaffirmed Ukraine's consistent rejection of Russian demands for neutral status as an attack on its sovereignty, declaring it is free to choose its alliances and adding that its NATO membership will depend on consensus with the alliance. It emphasized Kyiv's rejection of any restrictions on the size and other parameters of its armed forces, as well as curbs on the presence of foreign troops on its soil. Ukraine's memorandum also opposed recognizing any Russian territorial gains, while describing the current line of contact as a starting point in negotiations. The document noted the need for international security guarantees to ensure the implementation of peace agreements and prevent further aggression. Kyiv's peace proposal also demanded the return of all deported and illegally displaced children and a total prisoner exchange. It held the door open to gradual lifting of some of the sanctions against Russia if it abides by the agreement. Trump's positions Trump has often spoken admiringly of Putin and even echoed his talking points on the war. He had a harsh confrontation with Zelenskyy in the Oval Office on Feb. 28, but later warmed his tone. As Putin resisted a ceasefire and continued his aerial bombardments, Trump showed exasperation with the Kremlin leader, threatening Moscow with new sanctions. Although Trump expressed disappointment with Putin, his agreement to meet him without Zelenskyy at the table raised worries in Ukraine and its European allies, who fear it could allow the Russian to get Trump on his side and strong-arm Ukraine into concessions. Trump said without giving details that 'there'll be some swapping of territories, to the betterment of both' Russia and Ukraine as part of any peace deal that he will discuss with Putin when they meet Friday. Putin repeatedly warned Ukraine will face tougher conditions for peace if it doesn't accept Moscow's demands as Russian troops forge into other regions to build what he described as a 'buffer zone.' Some observers suggested Russia could trade those recent gains for the territories of the four annexed by Moscow still under Ukrainian control. 'That is potentially a situation that gives Putin a tremendous amount of leeway as long as he can use that leverage to force the Ukrainians into a deal that they may not like and to sideline the Europeans effectively,' Sam Greene of King's College London said. 'The question is, will Trump sign up to that and will he actually have the leverage to force the Ukrainians and the Europeans to accept it?' Putin could accept a temporary truce to win Trump's sympathy as he seeks to achieve broader goals, Greene said. 'He could accept a ceasefire so long as it's one that leaves him in control, in which there's no real deterrence against renewed aggression somewhere down the line,' he said. 'He understands that his only route to getting there runs via Trump.' In a possible indication he thinks a ceasefire or peace deal could be close, Putin called the leaders of China, India, South Africa and several ex-Soviet nations in an apparent effort to inform these allies about prospective agreements. Tatiana Stanovaya of the Carnegie Russia and Eurasia Center argued Putin wouldn't budge on his goals. 'However these conditions are worded, they amount to the same demand: Ukraine stops resisting, the West halts arms supplies, and Kyiv accepts Russia's terms, which effectively amount to a de facto capitulation,' she posted on X. 'The Russian side can frame this in a dozen different ways, creating the impression that Moscow is open to concessions and serious negotiation. It has been doing so for some time, but the core position remains unchanged: Russia wants Kyiv to surrender.' She predicted Putin might agree to meet Zelenskyy but noted the Kremlin leader would only accept such a meeting 'if there is a prearranged agenda and predetermined outcomes, which remains difficult to imagine.' 'The likely scenario is that this peace effort will fail once again,' she said. 'This would be a negative outcome for Ukraine, but it would not deliver Ukraine to Putin on a plate either, at least not in the way he wants it. The conflict, alternating between open warfare and periods of simmering tension, appears likely to persist for the foreseeable future.'
