Canadian Prime Minister Mark Carney has thrown the ball in US President Donald Trump’s court by announcing on Thursday that the progress of trade talks with Trump will decide whether or not to impose new tariffs on US steel and aluminium imports.
Carney has set July 21 as the deadline for the announcement of the reciprocal tariffs by Canada.
“First, Canada will adjust its existing counter-tariffs on US steel and aluminium products on July 21 to levels consistent with progress made in the broader trading agreement with the United States,” he said, and warned that Trump's trade war is running the risk of a global recession.
Carney and Trump had met at the Group of Seven meeting in Alberta this week, where the two agreed to pursue negotiations towards a deal within the coming 30 days.
While the Canadian PM said they would review the US’ response as the negotiations progressed, he reiterated the importance of safeguarding Canadian workers and businesses “from the unjust US tariffs”.
Canada is the largest foreign supplier of steel, aluminium and uranium to the US and has 34 critical minerals and metals that the Pentagon needs. It is also the top export destination for 36 US states.
Nearly USD 3.6 billion Canadian dollars (USD 2.6 billion) worth of goods and services cross the border each day.
“The world is in the middle of a trade war and several wars, actual wars, including wars that can have quite significant implications for commodity prices and global growth,” said Carney, who has led the central banks of both Canada and the United Kingdom.
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Trump has imposed 50 per cent tariffs on steel and aluminium as well as 25 per cent tariffs on autos. He is also charging a 10 per cent tax on imports from most countries, though he could raise rates on July 9, after the 90-day negotiating period set by him would expire.
Canada and Mexico face separate tariffs of as much as 25 per cent that Trump put into place under the auspices of stopping fentanyl smuggling, though some products are still protected under the 2020 US-Mexico-Canada Agreement signed during Trump's first term.
Stressing upon the significance of having ready access to US markets, Carney said the need to stabilise trading relationship with the United States was urgent.
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The Canadian PM did not immediately mention if he would sign a deal with the US if any tariffs remained in place on Canada.
“This a negotiation, and it is better for the Americans, and of course for Canada, to have true free trade between our countries, particularly in the steel, aluminium and auto sectors,” he said.
Trump announced with British Prime Minister Keir Starmer that they had signed a trade framework that was previously announced in May.
It included quotas to protect against some tariffs, but the 10 per cent baseline would largely remain as the Trump administration is banking on tariff revenues to help cover the cost of its income tax cuts.
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