Political news and analysis for Canadians
By 10 p.m. on Wednesday in Washington, the warning signs were clear.
Janice Charette called the prime minister and Dominic LeBlanc to say, “We have a problem.”
As wording of text was being sent back and forth, the Canadian side says the Americans were narrowing the scope of what Ottawa thought was agreed to, particularly on autos, reports Tonda MacCharles at The Toronto Star.
Canada, the world’s fourth-largest oil producer, sends about 90% of its oil exports to the U.S., but tensions between the countries are escalating, reports Reuters.
Trump imposed a 50% tariff on $20 billion worth of Canadian goods last week, and repeatedly angers Canadians with lies, insults, and expressed threats to the country’s economy and sovereignty.
Mr. Carney seems all alone in the trade world, tilting at Mr. Trump’s tariffs fortress. But appearances can be deceptive. Even though EU leaders will not publicly join his anti-Trump crusade, they are endorsing him in more subtle ways. Evidence came on Wednesday, when the prime minister’s office said that he will attend the EU’s State of the Union address to be given by EU President Ursula von der Leyen on Sept. 16 in Strasbourg, reports Eric Reguly in the Globe and Mail.
The next day, he will address the EU parliament. It’s impossible to imagine that Mr. Trump would receive the same invitation (the last U.S. president to address the parliament was Ronald Reagan, in 1985). Canada’s attempted pivot to Europe is building momentum, doubly so after Mr. Trump hit Canada with 50 per cent tariffs on a broad range of goods on Saturday. “My sense is that there is a lot of international respect for Carney standing up to Trump even if there is reluctance of foreign leaders to come out with full-voice support for him,” said Canadian international trade lawyer Lawrence Herman.
The main arguments to consider are no longer purely economical, according to Erlingur Erlingsson, senior visiting fellow with the Institute of International Affairs of the University of Iceland.
“We have warfare in the east, friction in Europe and political instability in many parts of the world and then the development of US foreign policy. This may not be the main argument for joining the EU in my mind but surely something to be considered,” he argued, citing increased security guarantees and better protection against US tariffs as further benefits of membership, reports Bloomberg.
This Bloomberg article is archived.
Growth in Canada’s real gross domestic product accelerated to 3.3% in the second quarter, confirming a strong economic rebound after a yearlong slump brought on by US tariffs and a slowdown in immigration, Bloomberg reports.
The expansion between April and June was driven by increases in exports, household spending, and business investment, Statistics Canada reported on Friday.
It’s the fastest pace of growth since early 2023, suggesting businesses had begun to adapt to US tariffs, a process the Bank of Canada said it was seeing.
Bloomberg article is also archived.
Internal Trade Minister Dominic LeBlanc said in a statement that while progress has already been made, there’s much more to do as the United States fundamentally changes its approach to trade, Ian Bickis at The Canadian Press reports.
Priorities at the meeting included working toward an agreement on a freer flow of services across the country by the end of the year, harmonizing the approval process for prefabricated homes and new building materials, and making it easier to trade food in Canada.
The renewed push on removing provincial barriers is welcome, said Corinne Pohlmann, executive vice-president of advocacy at the Canadian Federation of Independent Businesses.
“It had felt in the last six months that they took their foot off the pedal a little bit,” she said.
While Canadian domestic producers will absorb the loss of U.S. business and find other customers, the U.S. will find it nearly impossible to replace its cheapest supplier, says Jean Simard, president and chief executive officer at Aluminum Association of Canada.
The U.S. depends on Canada for 75% of its imported primary aluminum, covering 60% of its yearly usage, reports BNN Bloomberg.
With 50% tariffs in place, he says American industries, not Canadian smelters, will bear the brunt of the financial pain, as U.S. manufacturers face soaring production costs.
Automotive supply chains are engineered around parts, plants and production schedules. An automaker cannot replace a Canadian supplier overnight because a post tells it to “build in the U.S.” That Canadian part is supporting an American-built vehicle and American jobs.
Remove it, and the line stops.
The Americans know this because they have tried it before. Last year, Washington announced 25 per cent Section 232 tariffs on imported automobiles and parts. When the duties were set to reach parts in May, the math overtook the rhetoric. USMCA-compliant automotive parts remained tariff-free.
That exemption was not a favour to Canada but American self-preservation.
CBC Power & Politics: Former Quebec premier Jean Charest says things ‘fell apart’ once other members of the U.S. administration inserted themselves late in the game.
On the anniversary week of the burning of Washington, Justin Ling of the Toronto Star offers his opinion that the Canada-U.S. trade war was inevitable and that Canada has what it takes to come out on top.
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