Murray Wood: Remember when?
Old photos remind us our downtowns used to be places people went to more often. Murray Wood says a lot has changed, incl...
In an announcement on social media on Tuesday night, U.S. President Donald Trump said that he was hitting pause on new Canadian tariffs because the two countries had reached a deal.
In the Truth Social post that was long on hyperbole and short on details, Trump said the three-day pause was to finalize documents. There was no comment from Canadian Prime Minister Mark Carney at the time of publication.
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In July, Trump had threatened to impose 50 per cent tariffs on $20 billion worth of Canadian products, ranging from hockey sticks to tongue depressors.
Carney and Trump have spoken twice by phone in the past two days about the ongoing negotiations, including another call Tuesday afternoon, Carney’s office said, underscoring the last-minute push for a deal.
″We are negotiating,” Canadian Prime Minister Mark Carney told reporters Monday, speaking in French. “The negotiations are very intense and delicate. This is not the time to talk about negotiations in public.”
The two countries have wrangled for decades over trade, poking each other over sore spots like Canadian softwood lumber imports and U.S. access to Canada’s protected dairy market.
Trump’s approach to dealing with Canada marks an extraordinary departure from the traditionally cooperative relationship between the two countries.
Trump has hit Canadian goods with tariffs in a push to bring manufacturing back to the U.S., and has repeatedly made inflammatory comments about turning Canada into America’s 51st state.
The Canadian public is fed up. A petition to expel the U.S. ambassador Pete Hoekstra, a Trump ally, has collected nearly 218,000 signatures since July 21. It accuses Ambassador Pete Hoekstra of having “normalized’’ Trump’s talk of annexing Canada, among other complaints.
Nearly 72 per cent of Canada’s goods exports last year went to the United States, and there was hope the Trump administration might be wary of imposing a hefty new tariff — paid by U.S. importers who try to pass along the cost to consumers via higher prices — ahead of November’s midterm elections. U.S. voters are already frustrated with the high cost of living.
“I don’t think either side really wants these tariffs to come into effect,’’ said Ryan Majerus, a partner at King & Spalding and a former U.S. trade official. “There’s a pretty strong push on both sides to find an off-ramp here.’’
Majerus said the United States is aiming to get Canada to buy more U.S. military equipment — including F-35 fighters — to take part in Trump’s “Golden Dome’’ missile defence, and to give the United States more access to critical minerals, thereby reducing America’s reliance on tenuous supplies from its geopolitical rival, China.
Trump relies on Smoot-Hawley to go after Canada
Trump has made tariffs the centerpiece of his second-term economic agenda.
Last year, he imposed double-digit import taxes on almost every country, justifying them by declaring the longstanding U.S. trade deficit a national emergency.
The Supreme Court in February ruled that he’d overstepped his authority, striking down those tariffs and setting the stage for the federal government to pay refunds to importers.
Trump immediately looked for other ways to rebuild his tariff wall. Last month, he imposed import taxes of 10 per cent to 12.5 per cent on 59 countries and the European Union — which together account for 99 per cent of U.S. imports — for allegedly failing to have or to enforce restrictions on imports made from forced labour.
Then he reached back to the Great Depression to find a cudgel with which to whack Canada.
Trump invoked Section 338 of the Tariff Act of 1930 to impose 50 per cent tariffs on products that account for about 5 per cent of Canadian exports to the United States.
Nearly a century ago, with the U.S. and world economies in collapse, Congress passed the 1930 tariff law, imposing hefty taxes on imports from around the world.
Known as the Smoot-Hawley tariffs, named for their congressional sponsors, they are notorious among economists and historians for limiting world commerce and making the Great Depression worse.
Section 338 tariffs have never been used before. U.S. trade negotiators traditionally have favoured another tool, Section 301 of the Trade Act of 1974 — the provision Trump invoked to impose last month’s forced-labour tariffs.
Section 338 authorizes the president to impose tariffs of up to 50 per cent on imports from countries that have discriminated against U.S. businesses. Unlike Section 301 sanctions, no investigation is required. Nor is there any limit on how long the tariffs can stay in place.
— with files from Associated Press
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