Canadian Prime Minister Mark Carney is scheduled for his second White House encounter with President Trump this Tuesday. While many countries have successfully negotiated trade agreements with the Trump administration, Canada has yet to secure a deal. This ongoing situation places significant pressure on Prime Minister Carney to secure some form of tariff relief during his visit.
Ahead of their Washington trip, Canadian officials largely kept quiet. Those within the Canadian industries hit hardest by President Trump’s trade policies expressed minimal optimism for any major breakthroughs.
Canada Under the Weight of Tariffs
President Trump has unilaterally imposed a sweeping 35 percent tariff on most Canadian exports. His justification — that Canada is a primary source of migrants and fentanyl entering the United States — has been widely contested by available data.
Despite its broad application, this tariff does include a notable exemption: products certified as North American under the free trade agreement established by Canada, the U.S., and Mexico during President Trump’s initial term are excluded. These exempted goods account for the bulk of Canadian exports.
However, Mr. Trump has also levied tariffs on crucial Canadian exports such as automobiles, steel, aluminum, and most recently, softwood lumber. He frames these specific measures as vital for U.S. national security.
The impact of these tariffs is already deeply felt across Canada. General Motors, for instance, is preparing to lay off 2,000 employees at its pickup-truck plant in Oshawa, Ontario. In a similar vein, Stellantis halted its planned upgrade of a Brampton factory, originally slated to produce a new Jeep model, leaving the facility dormant.
In an effort to mitigate the damage, Canada has allocated 10 billion Canadian dollars (approximately $7.1 billion USD) in loan support for major steel and aluminum companies impacted by the U.S. tariffs.
Canada’s Strategic Overtures
Initially, Canada joined only a handful of nations, including China, in implementing retaliatory tariffs against American exports in response to Mr. Trump’s trade policies.
Prime Minister Carney’s Liberal Party secured an election victory in April, partly on a platform of countering U.S. tariffs. However, Carney, an accomplished economist who previously headed central banks in both Canada and England, has historically shown less enthusiasm for aggressive retaliatory tariffs than his Conservative rivals or even the preceding Liberal government, who first enacted them.
Since then, Canada has strategically rescinded most of its reciprocal tariffs targeting the United States. The only remaining tariffs are those directly mirroring the U.S. national security tariffs.
Additionally, Prime Minister Carney scrapped a controversial tax on American tech companies, a policy he inherited from the prior administration. This move came after President Trump had previously halted trade negotiations with Canada specifically due to this tax.
Rising Political Stakes
During his initial White House meeting in May, Prime Minister Carney had only been in elected office for a few weeks, meaning no significant trade breakthroughs were realistically anticipated at that time.
However, the political landscape has since shifted. Pierre Poilievre, leader of the Conservative Party, has been increasingly vocal in his criticism, portraying Prime Minister Carney as ineffectual in his dealings with President Trump.
In an unconventional move, Mr. Poilievre recently extended an offer to personally negotiate with the United States. This is a departure from typical Canadian political decorum, where opposition leaders generally refrain from direct engagement with foreign governments to prevent undermining national unity on international issues.
Just this Monday, Mr. Poilievre publicly shared a letter he dispatched to Prime Minister Carney, timed strategically before the White House meeting.
In his letter, which notably contained several factual inaccuracies regarding U.S. tariffs, Poilievre asserted, “No more losing. It is time for you to deliver the promised wins.”
Despite his bold declarations, Mr. Poilievre has yet to elaborate on how his proposed approach to President Trump would diverge from Carney’s.
Upcoming Trade Discussions
The trilateral North American trade agreement, originally signed by Canada, Mexico, and the United States, is slated for review next year, with its future status still uncertain.
Last month, U.S. Trade Representative Jamieson Greer suggested to the Economic Club of New York that future negotiations might lean towards a bilateral format, citing distinct trade priorities between Canada and Mexico.
However, following a September meeting with Mexican President Claudia Sheinbaum, Prime Minister Carney firmly dismissed any notions that Canada would abandon Mexico to pursue a separate free trade agreement solely with the United States.
Low Expectations for Breakthroughs
Prime Minister Carney’s office has characterized the White House visit as a “working meeting.” Details regarding other potential meetings in Washington remain undisclosed, though the Prime Minister is expected to stay in the capital until Wednesday morning.
Despite the visit, a prevailing sentiment among various business groups suggests that no significant trade agreement will emerge from these talks.
Flavio Volpe, President of the Automotive Parts Manufacturers’ Association of Canada, expressed his pessimism: “I’m not seeing a lot of movement in Washington on the issues that matter to Canadians’ interests during meetings and conversations I’ve had there.” He did, however, voice a hope that the upcoming public consultations by Canada, the U.S., and Mexico regarding their trade agreement’s future could “be a good moment for a show of good faith.”