Shipping containers at the Port of Montreal. (Andrej Ivanov/Bloomberg)
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President Donald Trump said trade talks with Canada are not a focus for his administration right now, and instead of negotiating a deal, he may decide to just leave import taxes in place.
“We haven’t really had a lot of luck with Canada,” Trump told reporters July 25.
“I think Canada could be one where they’ll just pay tariffs, not really a negotiation,” he added. “We don’t have a deal with Canada. We haven’t been focused on that.”
The Canadian dollar had little immediate reaction to the remarks, which were similar to previous comments by the president. It was down 0.6% on the day to C$1.3717 per U.S. dollar as of 1:06 p.m. in New York.
The president’s statements come a day after Canadian officials held a series of meetings in Washington with Republican senators. Commerce Secretary Howard Lutnick also met July 23 with Dominic LeBlanc, the Canadian minister in charge of U.S. trade.
Prime Minister Mark Carney has also lowered expectations recently of reaching a deal with Trump by Aug. 1, saying Canada won’t sign a bad agreement just to get one done.
Canadian officials are under less pressure to get a trade deal immediately because most products are exempt from U.S. tariffs if they’re shipped under the rules of the U.S.-Mexico-Canada Agreement, the pact Trump signed in his first term.
However, Trump has imposed steep new taxes on imports of Canadian steel, aluminum and autos, and Carney’s team has focused on trying to get those eliminated or reduced.
“I think it is clear that the U.S. is focused on some of the larger deals it would like to get done, for example the EU and India,” said David Adams, CEO of Global Automakers of Canada, which represents two Japanese companies that build vehicles in Canada, Toyota Motor Corp. and Honda Motor Co., as well as other automakers such as BMW.
But Adams lambasted the Trump administration’s recent agreements with Japan and U.K., which would give an advantage to cars and trucks assembled in those countries versus certain Canadian- or Mexican-made vehicles.
“It is somewhat unconscionable that the U.K. and Japan would have lower tariff rates applied to them than the U.S. free trade agreement partners whose vehicles have at least 50% U.S. content in them,” he said in an email. Honda and Toyota combined represent the majority of Canada’s vehicle production.
The U.S. and Canada have one of the world’s largest bilateral trading relationships. The U.S. imported about $477 billion of goods and services from Canada last year and exported $441 billion to Canada.
