Carney casts doubt on Canada securing a tariff-free deal with Trump

CTV News

2 days ago

Canada's prime minister is forging ahead with plans to come to a trade agreement with the United States. CTV National's Colton Praill on the upcoming meeting.
Most countries will likely have to accept some baseline tariff rate on their goods by the United States, Prime Minister Mark Carney signalled Tuesday morning, on his way into a meeting with his cabinet on Parliament Hill.
'There is not much evidence at the moment — from the deals, agreements and negotiations with the Americans, for any country or any jurisdiction — to get a deal without tariffs,' Carney said in French, when asked whether he believes it's possible to have the levies removed entirely.
Canada, he added, is uniquely positioned to have effectively free trade with the United States.
A slate of stacked U.S. tariffs on Canadian goods, as well as Canadian countermeasures, have been in place for months.
Following the G7 summit in Kananaskis, Alta., last month, Carney signalled he and U.S. President Donald Trump agreed to iron out a trade deal before July 21. But, in a letter addressed to Carney and posted to Truth Social last week, Trump said he'll be hitting Canada with 35 per cent tariffs on Canadian products starting Aug. 1. Carney subsequently revised the deadline to reach a deal to that date.
Carney also told reporters before Tuesday's cabinet meeting that he expects talks with the United States will 'intensify' in the next few weeks.
'At the same time, we need to recognize that the commercial landscape globally has changed,' he said. 'It has changed in a fundamental manner, and we will continue to focus on what we can most control, which is building a strong Canadian economy. It's part of what we'll be discussing at cabinet today.'
The prime minister added that the situation needs to be 'stabilized,' especially for the sectors that are particularly affected by Trump's tariffs.
Carney is also set to meet with Canada's premiers in Huntsville, Ont., next week.
Carney comments a 'wake-up call': trade lawyer
William Pellerin, an international trade lawyer with McMillan and former litigator for Canada in trade disputes with the United States, said Carney's comments on Tuesday can serve as a 'bit of a wake-up call for Canadians and Canadian businesses that we might not get back to a place of no tariffs.'
Speaking to CTV News, Pellerin said businesses should prepare for that to be the case.
Pellerin said there is 'a lot of scenario planning' underway for Canadian businesses and industry, while Carney's comments could be 'laying the groundwork or setting expectations' for Canadians.
'I think there's still quite a bit of optimism and hope that we will get to a reasonable place with the United States as our, by far, largest trading partner,' he said. 'But today might have been kind of the first opening, or the first time that we've really heard that we might not get there.'
Speaking to reporters earlier on Tuesday, Carney indicated Canada has one of the lowest effective tariff rates compared to other countries. According to Pellerin, Canada is 'actually not doing terribly.'
He said while there are some sectors that have been hit with more punishing tariffs — such as steel and aluminum — the vast majority of goods being compliant with the Canada-U.S.-Mexico free trade agreement brings the average, or effective, tariff rate down.
'If Canada could get to a place where we have just a very low baseline tariff that applies only to a certain subsect of products, I think we could be OK,' Pellerin said. 'But certainly, right now, the steel industry and others are really suffering.'
Most prefer 'hard' approach to Trump: survey
Amid the ongoing negotiations with the U.S., new data from the Angus Reid Institute show nearly two thirds of survey respondents want to see the Canadian government take a harder line.
According to the new numbers, 63 per cent of people want to see a 'hard approach,' which the polling firm characterizes as 'refusing difficult concessions even if it means a worsening of trade relations with the U.S.'
Meanwhile, 37 per cent of people prefer a 'soft approach,' which the firm considers 'making difficult concessions to keep a good relationship with our biggest trading partner.'
'When the political rhetoric trickles down to things like household income and people feeling secure or insecure as to whether or not they're going to have a job next year, that's really where we have to see how much of that elbows up rhetoric continues to hold,' said Angus Reid Institute president Shachi Kurl, in an interview with CTV News.
The Angus Reid survey also laid out which concessions in which sectors — such as supply management, the digital services tax, fresh water, and defence spending, for example — Canadians may or may not be willing to make.
The data from Angus Reid about a hard versus soft approach to negotiations were taken before Trump's letter threatening 35 per cent levies.
Kurl said there was already a 'significant amount of division' among Canadians when it comes to their confidence in Carney's ability to effectively negotiate with Trump, even before the president's latest threat.
Nearly half of respondents (48 per cent), she said, are confident the two leaders can hash out a deal, whether they trust Carney can negotiate one, or because they believe Trump will back down on his threat.
Conversely, Kurl said, 45 per cent say they're not confident in an imminent deal, whether that's because they don't trust the prime minister, or because they believe Trump is 'too unpredictable and too capricious.'
'And therefore, no matter what we do, we can stand on our head, it still won't matter,' she said.
'So those really represent an almost even division between those who are confident and those who are not confident,' Kurl also said.
With files from CTV News' Rachel Aiello and Colton Praill