Canada-U.S. bond strong and will survive, American ambassador to Canada, Pete Hoekstra, tells Winnipeg audience
Pete Hoekstra, who spoke to about 150 local business leaders Tuesday at a Winnipeg Chamber of Commerce luncheon, likened the current state of relations between the two nations to a cloth that's been pulled and stretched, taking on a new shape.
'It will still be a shape that is a strong shape,' Hoekstra said. 'What we need to do is make sure that we don't do anything that starts to tear apart that fabric.'
RUTH BONNEVILLE / FREE PRESS
The diplomat offered his perspective as the clock continues to tick down to Thursday's Donald Trump-imposed deadline for a new U.S.-Canada trade deal. The president has promised a new round of punishing tariffs on Canadian imports if negotiators are unsuccessful.
And while tariffs will raise the price of imported goods in the U.S., almost inevitably leading to a rise in the inflation rate, Hoekstra said the Trump administration doesn't see a cause-and-effect reaction on the horizon.
'We don't see a direct link between the tariffs and inflation,' he said.
Acknowledging that economic matters between Canada and the United States will change after a deal is hammered out, he they will continue to be 'strong partners.'
Hoekstra, who has been travelling across Canada for speaking engagement, wasn't willing to predict the outcome of the current negotiations.
RUTH BONNEVILLE / FREE PRESS
'A lot of action takes place in the last 70 to 96 hours,' he told the crowd at the Winnipeg Art Gallery.
He made note of recent U.S. trade deals struck with the European Union and Japan, both of which arrived at baseline 15 per cent tariffs on goods imported into the United States.
In a July 10 letter to Prime Minister Mark Carney, Trump threatened an additional 35 per cent tariff on a long list of Canadian goods. Steel and aluminum are already being hit with 50 per cent tariffs.
Hoekstra said the Trump administration is seeking prosperity for Americans and tariffs, a new tax bill and widespread government cuts are all part of the package.
'As we potentially pivot away from the United States in certain things, that's because we believe in our ability to compete globally.'– Chamber president and CEO Loren Remillard
Chamber president and CEO Loren Remillard pointed to the United States consumer price index: in June, the country's inflation rate was 2.7 per cent, a 0.3 per cent monthly increase. It followed another slight increase — 0.1 per cent — in May.
Hoekstra said that if inflation does, indeed, jump as a result of the president's imposition of tariffs on international goods, the door is likely open for changes.
'(Trump is) focused on one thing, which is results,' he said. 'If we get to a point somewhere down the road where it's like, 'I'm not getting to where I want to be,' the president will adjust.
'If you want to know where Donald Trump is going, just listen to him.'
The luncheon crowd, which included elected officials from all levels of government, had to pass through a crowd of roughly 100 protesters who took the opportunity to highlight a variety of concerns with multiple U.S. foreign policies.
Ben Carr, Liberal MP for Winnipeg South Centre, declined to comment directly on Hoekstra's note about inflation and tariffs.
Carney will ink a deal that is 'done in a way that puts Canada on a path toward greater prosperity,' Carr said.
RUTH BONNEVILLE / FREE PRESS
Winnipeg businesses will forge on if Canada's trade deal ends up with a 15 per cent export tariff, Remillard said.
'It's a resilient country with strong businesses,' he said. 'As we potentially pivot away from the United States in certain things, that's because we believe in our ability to compete globally.'
Canada didn't start to pull on the threads of Hoekstra's metaphorical cloth until the United States inflicted damage, Remillard said later.
Canada unleashed 25 per cent tariffs on a collective $59.8 billion worth of goods in retaliation to U.S.-imposed tariffs.
'We need something more than a deal,' Remillard said. 'We need certainty that the deal will live past… 365 days, because businesses don't make investments based on a quarter.
'We need stability.'
Evan Funk attended Tuesday's event for clarity on the current business climate. He's watched U.S. sales dip at Lynn & Liana Designs, a Manitoba-based cheeseboard creator.
Funk has noticed confusion online — customers seem to think Lynn & Liana products are being tariffed. In reality, the pieces are Canada-United States-Mexico Agreement (CUSMA) compliant and ship duty-free.
RUTH BONNEVILLE / FREE PRESS
'That's the biggest thing, is just confusion,' Funk said. 'No one knows what's going on.'
Both Carr and Remillard mentioned a need for Canada to diversify its export markets. A delegation of 19 European Union representatives visited Manitoba in April, expressing interest in greater trade.
Hoekstra said the U.S. will compete daily with the rest of the world for Canadian 'opportunities.' In some markets, the U.S. and Canada are tied very closely, he added.
Before the event, a number of Manitoba business leaders sat for a roundtable discussion with Hoekstra. The ambassador also toured Boeing, an American aerospace manufacturer with a Winnipeg plant.
Hoekstra chaired the Michigan Republican party during the 2024 elections. He was a businessman in his early career, acting as vice-president of marketing for furniture maker Herman Miller.
— With files from The Canadian Press
gabrielle.piche@winnipegfreepress.com
Gabrielle PichéReporter
Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle.
Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates.
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Toronto Sun
an hour ago
- Toronto Sun
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Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account The closest thing to winners may be the countries that caved to Trump's demands — and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run — even the United States, the intended beneficiary of Trump's protectionist policies. 'In many respects, everybody's a loser here,' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. 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2 hours ago
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The U.S. said it had no choice but to deport them to a third country. Then it sent them home
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Toronto Sun
3 hours ago
- Toronto Sun
Canada weighs retaliation cost against Trump tariffs as analysts warn hitting back isn't worth it
Published Aug 02, 2025 • Last updated 10 minutes ago • 4 minute read Tractor trailers entering the U.S. from Canada at the Pacific Highway Border Crossing in Blaine, Washington, on Monday, March 3, 2025. Photo by David Ryder / Bloomberg Canada's decision to retaliate against U.S. tariffs earlier this year appears to be driving a divergence in how President Donald Trump is dealing with America's neighbours. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account Until this week, Canada and Mexico received similar treatment in White House trade actions. Each was subject to a 25% base tariff, with a large exemption for goods shipped under the North American free trade pact known as CUSMA (or USMCA). That changed on Thursday, when Trump granted Mexico a 90-day pause on tariff hikes while jacking up its tax on Canadian products to 35%. The administration said Canada's higher rate was a response to fentanyl trafficking and its moves to hit back with counter-tariffs. The situation leaves Prime Minister Mark Carney with a political dilemma. On one hand, he won an election by promising a muscular approach to the trade war, saying the government would use tariffs to cause 'maximum pain' in the US. His voters remember that, and some want him to punch back. This advertisement has not loaded yet, but your article continues below. Yet the retaliatory measures already undertaken failed to prevent further escalations. Instead, they appear to have emboldened Trump's team to hit even harder. U.S. administration officials including Commerce Secretary Howard Lutnick frequently talk about how only two countries retaliated against Trump's tariffs — the other was China. 'Canada's retaliatory trade measures against the United States further complicate bilateral efforts to address this escalating drug crisis,' the White House said in a fact sheet, referencing fentanyl. But Mexico is a much larger source of shipments of the drug into the U.S., according to Customs and Border Protection data. Carney, an economist and former central banker, has also made it plain he believes retaliation can only go so far. In fact, his government has watered down Canada's counter-tariffs with a number of exemptions, declined to increase them when the U.S. lifted steel and aluminum tariffs to 50% and scrapped a tax on technology services at Trump's request. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. Dominic LeBlanc, the minister in charge of trade talks, told Radio-Canada on Friday the government hasn't made any decisions about further retaliation. But Carney is clearly reluctant to do so — which 'reflects the reality that counter-tariffs are understood to be economically harmful to the country which imposes them,' said David Collins, a professor specializing in international trade at City St George's, University of London. The government's priority is to keep the CUSMA carve-out that dramatically lowers the real tax on Canadian goods. The effective U.S. tariff rate on Canada is about 6.3%, according to Bank of Nova Scotia economists. 'A more diplomatic approach is likely to bear more fruit with the Americans,' Collins said. This advertisement has not loaded yet, but your article continues below. Canada imposed two rounds of counter-tariffs in March, when Justin Trudeau was in his final days as prime minister. The first placed 25% levies on about $30 billion of imports from the U.S. that included food items, clothing and motorcycles. The second came when Trump put tariffs on steel and aluminum. Then, when Trump added tariffs to foreign automobiles, Carney essentially matched that move, imposing similar fees on U.S. cars and trucks. But in mid-April, the government unveiled a series of exemptions for business inputs — goods imported for use in manufacturing and food packaging, as well as things needed for health care, public safety and security. Automakers such as General Motors Co. and Honda Motor Co. that make vehicles at Canadian plants were also made eligible for relief from import taxes. This advertisement has not loaded yet, but your article continues below. The large majority of U.S. products can still enter Canada tariff-free. U.S. companies and other entities exported about $440 billion of goods and services to Canada last year — more than to any other nation. For Canada, 'the logic for escalation over cooperation is just weak,' said Oliver Lavelle, global macro strategist at Thiel Macro LLC. Mexico's Way Mexican President Claudia Sheinbaum, in contrast, has never imposed counter-tariffs on the U.S. Sheinbaum's position is also supported by her high approval ratings, which have remained above 75% in most polls. 'It's worth saying: President Trump treats us with respect in all the calls we've had, and we do too,' she said during a new conference. 'We may not agree, but the treatment is respectful.' This advertisement has not loaded yet, but your article continues below. A statement issued late Thursday night by Carney's office expressed disappointment in Trump's tariff hike on Canada, but made no mention of retaliation. A spokesperson for Carney declined to comment further. LeBlanc said he met with Lutnick on Tuesday night, and that Canadian officials held other meetings throughout the week, but a deal acceptable to both sides 'was not yet visible.' In his statement, Carney acknowledged that lumber, steel, aluminum and autos are still subject to U.S. levies, and said his government 'will act to protect Canadian jobs, invest in our industrial competitiveness, buy Canadian, and diversify its export markets.' 'Jitters' But while the CUSMA exemption gives Canada some breathing room, the sectoral tariffs on steel and aluminum are still harmful and will affect economic growth if they're in place for long, Collins said. This advertisement has not loaded yet, but your article continues below. Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said the idea that Canada is getting off lightly is 'both overstated and potentially premature.' Canadian industries are more reliant on U.S. exports than their overseas competitors, and Trump could also chose to weaken the CUSMA exemption at any time, he said in a note to investors. 'We are still hopeful for a deal that relieves at least some of the pressure on base metal exporters,' Shenfeld said. 'But whether any of this lasts will depend on Trump's word, and we've seen how shaky that foundation can be, leaving jitters that could impact business capital spending and confidence ahead.' —With assistance from Mario Baker Ramirez and Carolina Millan. Read More Toronto Blue Jays Columnists Columnists Toronto & GTA Canada
