Trudeau expects Canada and US to be in trade war for ‘foreseeable future’
Donald Trump launched a new trade war on Tuesday by imposing tariffs against Washington’s three biggest trading partners.
Canadian Prime Minister Justin Trudeau said on Thursday he welcomed indications that the US would delay substantial tariffs on Canadian products for a month, but said Canada’s plan to impose retaliatory tariffs would remain in place for now.
US President Donald Trump said on Thursday that he has postponed 25% tariffs on most goods from Mexico for a month, amid widespread fears of the impact of a broader trade war.
US commerce secretary Howard Lutnick had said earlier that tariffs on both Canada and Mexico would “likely” be delayed. Yet so far no decision has been announced regarding Canada.
This is the second one-month postponement Mr Trump has announced since first unveiling the import taxes in early February.
Earlier, Mr Trudeau said he expects Canada and the US to be in a trade war for the foreseeable future after having what he called a colourful but constructive call with Mr Trump this week.
Mr Trudeau said the two sides are “actively engaged in ongoing conversations in trying to make sure these tariffs don’t overly harm” certain sectors and workers.
He also reiterated that “we will not be backing down from our response tariffs until such a time as the unjustified American tariffs on Canadian goods are lifted”.
Mr Trump launched a new trade war on Tuesday by imposing tariffs against Washington’s three biggest trading partners, drawing immediate retaliation from Mexico, Canada and China and sending financial markets into a tailspin.
Mr Trump put 25% taxes, or tariffs, on Mexican and Canadian imports, though he limited the levy to 10% on Canadian energy.
On Thursday, US commerce secretary Howard Lutnick said in a television interview that Mr Trump will likely suspend the 25% tariffs on Canada and Mexico for most products and services for a month, broadening an exemption that was granted on Wednesday only to cars.
In an interview on CNBC, Mr Lutnick said the one-month delay in the import taxes “will likely cover” all goods and services under the United States-Mexico-Canada Agreement, or USMCA, the trade agreement Mr Trump negotiated in his last term that replaced Nafta.
Mr Lutnick estimated that more than half of what the US imports from those two countries would be eligible for the exemption.
For companies with products that comply with the trade agreement “you will get a reprieve now”, he said.
Mr Trudeau said Mr Lutnick’s comments align with conversations Canadian officials have had with the Trump administration.
“But I am going to wait for an official agreement to talk about Canadian response or look at the details of it but it is a promising sign.” Mr Trudeau said. “But I will highlight that it means that the tariffs remain in place and therefore our response will remain in place.”
A day after the new tariffs took effect, Mr Trump had said he would grant a one-month exemption for US carmakers.
The announcement came after Mr Trump spoke with leaders of Ford, General Motors and Stellantis, the parent company of Chrysler and Jeep.
His press secretary said Mr Trump told the chief executives to move car production to the US to avoid tariffs.
