Canada seeks to reverse U.S. tariffs as Carney plans talks with Trump

A Canadian flag is pictured on Frobisher Bay in Iqaluit, Nunavut February 23, 2012
Reuters

Canadian Prime Minister Mark Carney will likely talk "over the next number of days" with U.S. President Donald Trump, after the U.S. imposed a 35% tariff on goods not covered by the U.S.-Mexico-Canada trade agreement, a Canadian official said on Sunday.

Ottawa said it was not warned in advance of the tax hike measure, deepening frustrations over the timing and scale of the levy. The tariff landed as both countries were still engaged in negotiations, according to the Financial Times (FT).

The 35% tariff was part of a broader push by Washington to restructure trade relations with key partners. Canada, which supplies roughly 20% of U.S. crude imports, was hit alongside other countries left out of last-minute exemptions.

“We think there is an option of striking a deal that will bring down some of these tariffs,” said Trade Minister Dominic LeBlanc, adding that talks are expected to continue.

FT reported that Ottawa's last-minute attempt to reach Trump by phone failed, as Carney was unable to get through. 

The White House said the tariffs are aimed at adversaries but drew criticism in Ottawa for targeting a close ally.

While countries such as the UK, Japan and South Korea secured agreements ahead of the 1 August deadline, Canada, India, and Taiwan were left out, and Switzerland said it was caught off guard by the steep new rates, according to the Financial Times. 

U.S. officials say the new tariffs are largely fixed but left the door open to further talks. They cited fentanyl trafficking and previous retaliation by Ottawa as reasons for the tougher stance.

Carney countered, saying Canada accounts for just 1% of U.S. fentanyl imports and has taken steps to further reduce that volume.

Still, U.S. Representative Jamieson Greer said on CBS, "A lot of these are set rates pursuant to deals... so these tariff rates are pretty much set."

Canada has responded diplomatically, avoiding escalation and reaffirming its commitment to a stable trade relationship. 

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