Canada battles the clock, politics in scramble to avert Trump’s tariffs

As trade negotiations with the United States enter the eleventh hour, Canada is in a scramble to avert hefty tariffs targeting billions of dollars of its exports.

Absent a last-minute deal, US President Donald Trump’s administration will impose a 50-percent duty beginning on Wednesday on a broad range of Canadian exports, including electronics, industrial machinery, furniture, dairy products and wine.

Some $20.2bn worth of goods are in the firing line, accounting for about 5 percent of US imports from Canada, according to the Center for Strategic and International Studies.

Trump has justified the tariffs as a response to what he deems Ottawa’s discriminatory treatment of US automobiles, dairy products and alcoholic drinks.

While Trump has aimed a slew of punitive trade measures at Canada since reentering the White House, the latest tariffs – invoked under the first-ever application of Section 338 of the Tariff Act of 1930 – are notable for applying to goods that qualify for duty-free treatment under the United States-Mexico-Canada Agreement.

Despite Trump’s tariffs on sectors such as autos and steel, exemptions in the three-way deal, which was ratified during the first Trump administration, have allowed an estimated 85 percent of US-Canadian trade to remain tariff-free.

“These latest tariffs, if implemented, will hurt small, medium and large-sized businesses, and self-employed people right across the country, from growers of flower bulbs and beekeepers to makers of hockey equipment, to the cement industry to dairy and wine,” says Julian Karaguesian, a lecturer and trade expert at McGill University in Montreal.

“Tariffs of 50 percent would effectively price hundreds of Canadian goods out of the US market.”