Trump’s Canada Envoy Sees Trade Talks Resuming After Sudden Halt

Pete Hoekstra, the US ambassador to Canada. Photo by Al Drago /Photographer: Al Drago/Bloomberg

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(Bloomberg) — The US ambassador in Ottawa said Canada and the US have a chance to reach an agreement to reduce tariffs despite last month’s diplomatic blowup when President Donald Trump angrily halted negotiations.

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Until about a month ago, the two countries had been making progress on a limited deal to address certain trade frictions, Ambassador Pete Hoekstra told a conference of manufacturers in Ottawa on Wednesday. The talks will resume, he predicted, though he’s not sure when. 

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“I’ve got suggestions that I think can get it restarted, but it’s not going to be easy,” he said. 

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Discussions between the longtime allies have been on ice since Oct. 23, when Trump used his Truth Social platform to express his displeasure over a television ad campaign sponsored by the Canadian province of Ontario. 

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The 60-second advertisement used the words of former President Ronald Reagan to make a case against tariffs. “Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED,” wrote Trump. 

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Prime Minister Mark Carney said he asked the province not to run the ad, and later said he apologized to Trump. 

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Hoekstra said Wednesday that Canada will have to accept that the days of duty-free trade between the North American neighbors are over. The two countries have enjoyed mostly tariff-free trade since the late 1980s, when Reagan and then-Canadian Prime Minister Brian Mulroney struck a deal, the precursor to a wider North American accord that eventually included Mexico. 

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“There will be a tariff, OK? The president has made it very, very clear,” Hoekstra said, adding that he has encouraged Canadian officials “just to really work closely with us” and “get into the lowest tariff bucket that the United States of America will have.” 

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That might look something like the deal the White House struck with the UK, the ambassador said. The Trump administration agreed earlier in the year to reduce tariffs on cars, steel and other UK products in return for more tariff-free access to the UK market. But the White House kept in place a baseline tariff of 10% on most British goods, and getting the White House to follow through on lowering steel tariffs has been elusive so far. 

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For Canada, the economic risks of a lopsided trade deal are much higher than for the UK. It exported about $476 billion worth of goods and services to the US last year, versus $162 billion for the UK.

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Canada is also the largest single US customer, purchasing around $440 billion from its neighbor last year, according to data from the US Bureau of Economic Analysis. It’s by far the biggest foreign buyer of US-made automobiles, for example. The US posted a $3.9 billion trade surplus in motor vehicles and parts with Canada in the first eight months of this year, the bureau said Wednesday. 

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