Carney calls U.S. trade bans ‘modest,’ signals Canada won’t retaliate

Mark Carney confirmed that he’s spoken to Trump recently on geopolitical issues, but it’s unclear whether they broached trade. Photo by ANDREJ IVANOV/AFP via Getty Images

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Prime Minister Mark Carney said this week’s round of United States trade measures against Canada will hurt some businesses but will have a “modest” impact overall — and signalled that his government isn’t planning to retaliate.

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President Donald Trump’s administration escalated its trade war with Canada on Sept. 8, announcing import bans on a range of goods, including alcoholic beverages, whey proteins and motorcycles. The White House also said it would restrict Canadian companies’ ability to sell to U.S. government contractors and changed the list of Canadian products that are subject to 50 per cent tariffs, adding some and removing others.

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“We fully recognize that for individual companies and in individual sectors, these are significant,” Carney told reporters on Thursday in Banff, Alberta, where he’s meeting with his cabinet. “I would also recognize that in the context of other things that the U.S. administration has done — other measures U.S. administration has done — that these are relatively modest measures.”

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Asked whether Canada will retaliate, Carney said the best response is focusing on his government’s plan to reinforce the domestic economy and diversify the country’s trade and economic relationships.

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The Canadian government is “always ready to sit down in a professional way and negotiate,” the prime minister said.

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“We think there is a mutually beneficial deal possible that respects our sovereignty and is in the interests of both countries. So that’s a possibility,” he said.

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Canada and the U.S. tried for weeks to reach an agreement to reduce tariffs and lower trade tensions, but the talks collapsed on Aug. 21 and Trump’s so-called Section 338 tariffs went into effect the following day. Carney retaliated with counter-tariffs on Sept. 8, which led to this week’s U.S. moves.

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The import bans will affect about US$1 billion in U.S. imports from Canada — but many of those items had 50 per cent tariffs on them already.

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“The Trump administration’s latest trade move in the U.S.-Canada trade war, announced late Sept. 8, isn’t much of an escalation in practice and is unlikely to have any macroeconomic impact for either economy,” Bloomberg economist Nicole Gorton-Caratelli and analyst Chris Kennedy said in a note. “But it’ll keep uncertainty elevated and raises the risk that the U.S.’s dispute with its northern neighbour will continue.”

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The import bans promised by the Trump administration are set to take effect in about three weeks, potentially leaving room for talks to resume. Bloomberg News reported on Thursday that a senior U.S. official said constructive conversations with Canadian counterparts took place this week, and added they expect another discussion in the coming days on an alternative path forward.

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