President Donald Trump suggested today he would not lift tariffs on imports from Canada and told Canadian prime minister Mark Carney that the US-Canada-Mexico (USMCA) free trade agreement needs to be renegotiated.
Trump, who hosted Carney at the White House today, told reporters that there was nothing Canada's leader could tell him to change his mind on stiff tariffs he imposed on Canadian steel, aluminum, cars and auto parts. "It's just the way it is," Trump said.
While Trump has altered his tariff levels repeatedly, his administration has imposed a 25pc tariff on Canada-sourced steel and aluminum, and a 25pc tariff on some cars and autoparts imported from Canada. Any product that qualifies for duty-free treatment under the USMCA is exempt from tariffs Trump imposed. The 10pc tariff Trump imposed on Canadian crude and other energy imports only lasted from 4-7 March, causing turmoil in North American energy markets.
But even the remaining tariffs are a significant hindrance for the integrated North American auto industry, executives in Canada and the US have said.
Trump today described the USMCA, which he negotiated during his first administration, as merely a "transitional deal" and suggested that it could be either terminated or renegotiated completely. The USMCA includes a provision calling for it to be reviewed by all three countries in 2026.
The existing free trade agreement is "a basis for broader negotiations," Carney said, adding that "some things about it are going to have to change."
Carney made his first trip to Washington just a week after winning the 28 April parliamentary election, following a campaign centered around his opposition to Trump's policies.
Trump and Carney offered polite compliments to each other, but there was little visible chemistry between the two men.
Trump doubled down on his suggestion that Canada could become the 51st US state, prompting Carney to tell him that "as you know from real estate, there are some places that are never for sale."
"Having met with the owners of Canada over the course of the campaign in the last several months, it's not for sale," Carney said. "Never say never", Trump retorted.
Trump also repeated his past claims that "we don't do much business with Canada. From our standpoint, they do a lot of business with us."
"We are the largest client of the United States," said Carney. "We have a tremendous auto sector between the two of us."
