Canadian Prime Minister Mark Carney is set for his second White House meeting with President Trump. While many other countries have managed to forge trade agreements with the Trump administration, Canada has not. This puts immense pressure on Carney to secure at least some relief from the contentious U.S. tariffs.
However, Canadian officials remained tight-lipped ahead of their Washington visit. Those working in industries heavily impacted by Trump’s trade policies voiced minimal optimism, anticipating few, if any, major breakthroughs.
Canada’s Heavy Tariff Load
President Trump has implemented a sweeping 35 percent tariff on Canadian exports. He justifies this by alleging, without supporting evidence, that Canada is a primary conduit for migrants and fentanyl entering the United States.
Despite its broad application, this tariff includes a notable exemption for products meeting North American origin requirements under the free trade agreement established between Canada, the U.S., and Mexico during Trump’s initial term. These exempted goods account for the bulk of Canadian exports.
Nevertheless, Trump has specifically targeted several vital Canadian exports, including automobiles, steel, aluminum, and recently, softwood lumber. He frames these tariffs as essential for national security.
The impact of these tariffs is already substantial. General Motors is preparing to cut 2,000 jobs at its pickup-truck plant in Oshawa, Ontario. Meanwhile, Stellantis has halted a major factory overhaul in Brampton, also in Ontario, which was intended to produce a new Jeep model, leaving the facility dormant.
In response, Canada has allocated 10 billion Canadian dollars (approximately $7.1 billion USD) in loans to support major steel and aluminum companies struggling under the weight of U.S. tariffs.
Strategic Concessions from Canada
Initially, Canada stood among a small group of nations, including China, that chose to impose their own retaliatory tariffs on U.S. exports in response to President Trump’s measures.
Prime Minister Carney’s Liberal Party secured an April election win partly on a platform of countering American tariffs. However, Carney himself, an accomplished economist who previously headed both Canada’s and England’s central banks, has always been less keen on tit-for-tat tariffs compared to his Conservative rivals and even the preceding Liberal administration that first implemented them.
Since then, Canada has wisely withdrawn most of its reciprocal tariffs against the United States, retaining only those on products mirroring Trump’s national security-related tariffs.
Furthermore, Carney scrapped a digital services tax on American tech giants, a policy he inherited from the prior government. This move was significant, as President Trump had previously halted negotiations with Canada specifically over this tax.
Mounting Political Pressure
Carney had only just begun his tenure in elected office a few weeks prior to his initial White House meeting in May. Consequently, the lack of trade breakthroughs at that session was not unexpected.
However, since that first encounter, Conservative Party leader Pierre Poilievre has intensified his criticisms, repeatedly claiming that Carney is failing to effectively engage with President Trump.
In an unusual move, Poilievre recently extended an offer to directly negotiate with the United States. Historically, leaders of opposition parties have refrained from engaging directly with foreign governments to prevent undermining or fragmenting Canada’s unified stance on international matters.
Just days before the White House meeting, Poilievre publicly released a letter he had sent to Prime Minister Carney.
In his letter, which contained several factual errors regarding U.S. tariffs, Poilievre declared: “No more losing. It is time for you to deliver the promised wins.”
Despite his strong rhetoric, Poilievre has yet to articulate any concrete details on how his proposed approach to dealing with President Trump would actually differ or be more effective.
Upcoming Trade Discussions
Looking ahead, the North American trade agreement, established between Canada, Mexico, and the United States, is slated for review next year, casting uncertainty over its future.
Last month, U.S. Trade Representative Jamieson Greer hinted to the Economic Club of New York that future negotiations might lean towards a “bilateral” approach due to the distinct trade dynamics between Canada and Mexico.
However, Prime Minister Carney, following his September meeting with Mexican President Claudia Sheinbaum, firmly dismissed any notion that Canada would abandon Mexico to pursue a separate free trade agreement solely with the United States.
Low Expectations for Breakthroughs
Carney’s office characterized the White House visit as a “working meeting,” though details on his other potential engagements in Washington remain vague. The Prime Minister is expected to stay in the capital until Wednesday morning.
Despite the visit, a prevailing sentiment among business leaders suggests that no concrete agreement is likely to emerge.
“I’m not observing much progress in Washington on issues crucial to Canadian interests, based on my recent meetings and discussions there,” stated Flavio Volpe, President of the Automotive Parts Manufacturers’ Association of Canada. He expressed hope that the upcoming public consultations by Canada, the U.S., and Mexico regarding their trade agreement’s future could “signal a moment of good faith.”