Canada finds itself in the middle of a circus as NAFTA discussions take strange new turn

U.S. President Donald Trump delayed imposing tariffs on steel and aluminum from Canada and Mexico Thursday, but don’t think for a minute that’s the end of it.

“American companies haven’t been treated fairly,” Trump said at a news conference in announcing 25 per cent tariffs on steel and 10 per cent on aluminum from foreign sources.

But at the same time, Trump said he was delaying imposing the tariffs on Canada and Mexico until the conclusion of discussions on NAFTA.

“It’s all about pressure,” CTV analyst Craig Oliver said of Trump’s announcement.

That’s exactly what it’s about. Trump has given himself another weapon in discussions at the North American Free Trade Talks. He’s now holding Canada and Mexico hostage at those talks.

The so-called “carve out” of Canadian steel and aluminum tariffs would allow U.S. trade negotiators to have what a senior administration official described as “ongoing discussions” about various issues between the three countries,” CBC reporter Pete Evans writes.

“That’s a thinly-veiled reference to NAFTA negotiations, which are currently in their eighth round of talks as the three countries seek to update the more than two-decade old agreement that governs trade between them,” the Evans story continues.

At the signing ceremony Wednesday, the president was even more blunt:

“We’re going to hold off the tariff on those two countries (Canada and Mexico) to see whether we can make the deal on NAFTA.”

That sets up the potential that should the U.S. not get the concessions it wants from those talks, Canadian metal producers could soon find themselves subject to the same punitive tariff as everyone else.

Canada exported a combined $15 billion of the two metals to the U.S. last year, so a tariff would bite deep and likely prompt some sort of retaliatory tariff on U.S. goods imported into Canada.

“Our industries have been targeted for years and years by unfair foreign trading practices,” Trump said at the signing ceremony, “And that’s going to stop.”

So now NAFTA talks take on a whole new chapter.

Aluminium Association of Canada CEO Jean Simard said that after seeing the tariff tweets from Trump as early as Monday he made clear to the government that the industry supports Canada’s firm position in talks.

“The first thing I did when that tweet came out yesterday morning, I got in touch with the federal government to tell them our industry was not expecting anything out of this…that the government should remain firm in its positions,” he said Monday. “We’re still in a flying circus act. I don’t see why Canada should jeopardize its negotiating positions at the NAFTA table for the tariff.”

That says it all. NAFTA talks have suddenly turned into a flying circus with Trump standing in the centre ring doling out instructions to all his followers. The question is will Canada follow or just walk out of the arena?

Well, now the ball is in the courts of Prime Minister Justin Trudeau and Trade Minister Chrystia Freeland. Can they stand up to Trump or will they fold like a house of cards? I guess we will all just have to wait and see.

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Jeff Wilkinson

About the Author: Jeff Wilkinson

Jeff Wilkinson is a retired Canadian journalist who covered a wide range of political stories over a 35-year career in newspapers and radio. He was at Place du Canada in Montreal in 1995 for the Unity rally on the eve of the Quebec referendum. He interviewed former Prime Minister Brian Mulroney and numerous cabinet ministers, provincial premiers and many other key political figures both provincially and federally. Most recently he served in the Press Operations Crews at the 2015 Pan Am Games and 2017 Invictus Games.
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