US-Canada trade war: Carney expects new tariffs to hurt some businesses, but Ottawa unlikely to retaliate | Today’s news
Days after Canada’s retaliatory tariffs against the United States took effect, Prime Minister Mark Carney said this week’s U.S. trade measures against Ottawa will hurt some businesses but have a “modest” overall impact. However, he made it clear that his government does not plan to retaliate.
Carney made the remarks while addressing reporters in Banff, Alberta, where he is meeting with his cabinet. He said: “We fully recognize that these are significant for individual companies and across sectors.” He added: “I would also recognize that in the context of other things that the US administration has done — other measures that the US administration has taken — that these are relatively modest measures,” Bloomberg reported.
US escalates trade war with Canada
His words came after US President Donald Trump’s administration escalated a trade war with Canada on Tuesday (local time). Hours after Ottawa’s retaliatory tariffs came into effect, Washington announced a ban on imports of a range of goods, including alcoholic beverages, whey protein and motorcycles. In addition, the White House said it would limit the ability of Canadian companies to sell to U.S. government contractors and revise the list of Canadian products subject to 50% tariffs, adding some products and removing others.
Asked if Ottawa would retaliate, Carney said the government’s priority should be to strengthen the domestic economy and expand Canada’s trade and economic ties with other countries.
The two historic North American allies have struggled for weeks to reach an agreement to reduce tariffs and ease trade tensions. However, negotiations broke down at the last minute on August 21, after which the Trump administration’s so-called Section 338 tariffs took effect on August 22. In response, Carney imposed a counter-tariff that went into effect on Tuesday, after which Washington announced its latest move.
Will import bans affect $1 billion worth of goods?
While the import bans will affect about $1 billion worth of U.S. goods from Canada, many of those products already face 50% tariffs.
The import bans announced by the Trump administration on Tuesday will go into effect in about three weeks, potentially leaving room for renewed talks. Bloomberg News reported Thursday that a senior U.S. official said the two sides held constructive discussions this week and are expected to hold another round of talks in the coming days to explore a way forward.
Carney talks to Trump about geopolitical issues; business negotiations sidelined?
According to the report, Carney confirmed that he recently spoke with Donald Trump about geopolitical issues; however, it remains unclear whether they engaged in bilateral trade. He said the Canadian government is “always ready to sit down in a professional manner and negotiate.” He added: “We think a win-win deal is possible that respects our sovereignty and is in the interest of both countries. So that’s a possibility.”
However, it remains to be seen whether the once long-time allies will be able to resume trade negotiations.
