Jens Asbjørn Bøgen
The leaders of the long-time allies are meeting in the middle of an unprecedented trade conflict hitting the economy hard on both sides of the border.
The leaders of the long-time allies are meeting in the middle of an unprecedented trade conflict hitting the economy hard on both sides of the border.
Canadian PM visiting the White House
Newly elected Canadian Prime Minister, Mark Carney, will visit U.S. President Donald Trump in the White House Tuesday, and the scene is set for the meeting of the Decade.
Close Allies, ready to defend themselves
Canada is the second-biggest trading partner of the U.S., but since the sweeping tariffs announced by Trump on “Liberation Day”, which saw Canada being hit with a 25 % tariff, has soured the relationship between the Countries – especially since they’ve had free trade between them for decades.
The American betrayal
Following his election win, Carney said in a speech: “We are over the shock of the American betrayal, but we should never forget the lessons.”
Escalating tensions
During his first term as President, Trump himself actually brokered the United States-Mexico-Canada free trade agreement, which was ratified in 2020. It replaced the 25 year old North American Free Trade Agreement.
Promises and suspension
Before “Liberation Day”, in early March, both Mexico and Canada was hit by an American blanket tariff of 25 %. It was suspended, when both countries promised increase their efforts to fight the flow of illigal immigration and fentanyl into America. The 25 % tariffs on goods from Mexico and Canada not compliant with the USMCA is still in place, though.
Canadian retaliation
Following Trumps tariffs, Canada retaliated by implementing its own 25 % tariff on US imports worth about $22 billion (C$30 billion).
“Very complex”
Time will tell whether the meeting between Trump and Carney will be confrontational or cordial. Facts are that the ongoing trade war is hitting companies hard both North and South of the U.S.-Canada border. Monday, Commerce Secretary Howard Lutnick, told Fox Business, that a deal with Canada is possible, but would be “very complex”.