U.S. President Donald Trump signalled Friday that he may not reach a deal with Canada, suggesting the northern neighbour will “just pay tariffs.”
“We haven’t really had a lot of luck with Canada,” Trump told reporters outside the White House. “I think Canada could be one where they’ll just pay tariffs, not really a negotiation.”
Trump made the remarks while discussing other trade deals that had been reached with countries ahead of his Aug. 1 deadline.
The remarks come just a day after Canada-U.S. Trade Minister Dominic LeBlanc told reporters he was feeling “encouraged” following meetings with both Commerce Secretary Howard Lutnick and American lawmakers.
However, LeBlanc had also suggested a new economic and security deal would not be signed before Aug. 1.
“Canadians expect us to take the time necessary to get the best deal we can in the interest of Canadian workers,” LeBlanc said.
The offices of LeBlanc and Finance Minister Francois-Philippe Champagne both declined to comment on Friday.
So how would Canadians react if there is no deal?
It may be one of two opinions, said Drew Fagan, a professor at the Munk School of Global Affairs and Public Policy.
“So there’ll be some Canadians who will say, ‘Well, of course we couldn’t get a deal, look at what he was demanding’ when you think about the issue of sovereignty,” he said. “There’s be other Canadians who’ll say, ‘This is a problem because of the continuing economic uncertainty and the addition of tariffs.’”
Trump sent letters to multiple nations, including Canada, earlier this month saying if no deal is made by Aug. 1, high tariffs on imports would be imposed.
Canada already has a trade agreement with the U.S. in the form of the Canada-United States-Mexico agreement that took effect in 2020 and which was negotiated with Trump during his first presidency.
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While Trump has threatened a 35 per cent tariff on Canada starting Aug. 1, if a deal isn’t reached, items that fall under CUSMA are currently exempt from those tariffs.
But tariffs still remain on Canada on its steel, aluminum and automobile exports to the U.S., with copper duties also expected to take effect in one week.
If a trade deal is not reached, even with CUSMA exemptions, it would still have an impact.
“It’s a minority of trade, but it’s not insignificant,” Fagan said. “Then you’re going to have the general disruption, the lack of confidence, the feeling that it could get worse.”
He also said there could be concerns about the impact that agreements between the U.S. and other countries would have on Canada, such as how Japan auto investment might change the automotive industry between Canada and the U.S.
The Canadian Chamber of Commerce said in a statement to Global News that despite Trump’s comments, the focus should be “getting a good deal.”
“There can be a lot of heated rhetoric during negotiations,” said Candace Lang, president and CEO of the Chamber. “Instead of reacting to what’s being said minute-by-minute, we should focus on the long-term goal — getting a good deal for Canada, whether by August 1 or not. So long as our countries keep talking trade, there’s hope for a positive outcome.”
Unifor, which represents thousands of auto industry workers, echoed the Chamber’s statement saying Canadian negotiators must work to land a deal.
“Trump’s comments on the possibility of no deal with Canada, and only future tariffs, should surprise no one,” said Unifor national president Lana Payne. “Canadian negotiators must ignore the bluster and stick to their priorities. Land a deal that works for this country.”
Earlier this week at a summit with the nation’s premiers, Prime Minister Mark Carney told them he would not accept a bad deal for Canada.
“A good deal is something that preserves, reinforces and stabilizes those relationships as much as possible. A good deal is also one that doesn’t tie our hands in terms of other things that we can do so that we can pursue that positive agenda that we focus so much of our time on,” said Carney.
Trump has announced several deals this week with various countries, including Japan and the Philippines, adding to agreements already reached with Indonesia, Vietnam and the U.K.
Some automakers say they’re “committed” to the possibility of Canada reaching a deal, one they hope will continue the provisions of CUSMA.
But the Global Automakers of Canada said in a statement it was “unconscionable” that the U.K. and Japan could benefit from lower tariffs than Canada.
“It is unconscionable that the U.K. and Japan would benefit from lower tariffs on their automotive exports than America’s USMCA partners — especially when vehicles built in Canada contain at a minimum 50 per cent content from the United States,” said David Adams, president of Global Automakers.
Details of the various frameworks announced with those countries is still not completely known, but all of them include some form of tariff.
The president told reporters Friday that more letters will soon be sent out, “close to 200,” telling the countries they have a deal.
“When those letters go out, they’re a page and a half, that means they have a deal, it’s done,” Trump said. “They pay that tariff and that is a contract, essentially.”
Carney told reporters last week that even as negotiations were ongoing with the U.S. there was “not a lot of evidence” for any country to be able to get a tariff-free agreement.
Amid negotiations, a bipartisan group of U.S. senators visited Canada on Monday to meet with Carney, even as Lutnick vowed tariffs on Canada were here to stay.
Alaska Sen. Lisa Murkowski, who was among the group, told reporters in Washington, D.C. on Thursday that they’d like to get to a “better place” with the trade relationship.
She said Canada can’t be treated as “yet one more country that we need to reconcile tariffs on,” though she cautioned she wasn’t “sensing” things would be resolved before Aug. 1.
“I wish that I could say, ‘It feels good,’ that this is all going to be taken care of before the first of August, but I’m not sensing that,” she said.
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