Ottawa (Rajeev Sharma): Canadian Prime Minister Mark Carney and US President Donald Trump may soon meet for high-level talks in an attempt to defuse escalating trade tensions, after Washington’s decision to impose a 35% tariff on Canadian goods not covered under the US-Mexico-Canada Agreement (USMCA) sent shockwaves through Canada’s economy.
Canada’s federal minister responsible for US-Canada trade relations, Dominic LeBlanc, expressed optimism on Sunday, telling CBS News that he sees “a pathway to reducing these tariffs” through negotiations.
“I believe there is an option of striking a deal that will bring down tariffs,” LeBlanc said, just days after Trump signed an executive order justifying the tariff hike on the grounds of national security and concerns over fentanyl trafficking.
Ottawa Signals Willingness for Dialogue
The Carney government has criticized the tariff hike but remains committed to diplomacy. According to LeBlanc, direct talks between Carney and Trump could happen “over the next number of days,” as both nations weigh the economic risks of a prolonged dispute.
US Commerce Secretary Howard Lutnick also hinted at possible flexibility from Washington, suggesting that Trump could reconsider the tariffs if Canada softens its retaliatory measures.
Canada’s Countermeasures
In response to earlier US trade actions, Canada has already imposed two rounds of counter-tariffs. The first, under former Prime Minister Justin Trudeau, targeted roughly C$30 billion in American exports, including food, apparel, and motorcycles. The second round mirrored US tariffs on steel, aluminum, and foreign automobiles.
However, Carney’s administration introduced targeted exemptions in April for critical business inputs related to health care, public safety, and industrial production. Automakers such as General Motors and Honda, which operate major Canadian manufacturing plants, were also granted relief from import duties to protect domestic jobs and supply chains.
Key Sectors at Risk
The new US tariffs threaten to heavily impact Canada’s lumber, steel, aluminum, and automotive industries, potentially leading to job losses and higher prices for consumers. While Ottawa’s counter-tariffs remain in effect, the majority of US goods still enter Canada tariff-free, keeping some trade channels open despite the ongoing standoff.
With both sides signaling a willingness to negotiate, the coming days could be critical for averting a full-blown trade war between two of the world’s closest economic partners.
