Cabinet set to focus on Canada-U.S. trade relations on final day of retreat

The U.S. remains Canada's most dominant trading partner, accounting for more than three-quarters of Canada's exports last year

Author of the article:

The Canadian Press

Mia Rabson

Published Aug 27, 2024  •  Last updated 0 minutes ago  •  3 minute read

Prime Minister Justin Trudeau and members of his cabinet arrive at the retreat in Halifax, Monday, Aug. 26, 2024. Photo by Kelly Clark /The Canadian Press

Canada-U.S. relations took centre stage at the federal cabinet retreat in Halifax Tuesday as Prime Minister Justin Trudeau and his team wrap up the third and final day of their annual end-of-summer meetings.

Eight months ago Trudeau launched a renewed Team Canada approach, restoring the game plan initiated under the first Donald Trump presidency. That included a full-court press on Canadian interests with those who had influence around Trump, including Republicans in Congress, state governments and business leaders.

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The tumultuous four years of Trump’s time in the White House was difficult for Canada, as he forced a renegotiation of the North American Free Trade Agreement and imposed punishing tariffs on Canadian steel and aluminum.

Canada and the U.S. later reached an agreement to end the tariffs on steel and aluminum.

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Canada is looking to shore up its interests ahead of him possibly winning again in November, but even if vice-president Kamala Harris prevails, irritants and U.S. protectionism remain in play.

Treasury Board President Anita Anand, discussing efforts to work with the U.S. to address barriers at the border Tuesday, said Canada must be prepared for any scenario.

“We are undertaking this work because we know that it’s important to maintain a very strong trading relationship with the United States regardless of who is in the White House,” she said.

Anand noted about $3.3 billion worth of goods cross the Canada-U.S. border every day.

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Despite the Liberals sharing a lot of ideology — and even political buzzwords — with Harris and the Democrats, the relationship isn’t always smooth.

Ongoing U.S. tariffs on Canadian softwood lumber remain a large point of disagreement between the two countries. Imposed in 2017, the tariffs remain in place despite multiple Canadian challenges, and earlier this month the Biden-Harris government moved to increase them.

The Americans have also put pressure on Canada to solve domestic issues repeatedly in the last few years, from the blockades at border crossings by Freedom Convoy members in 2022, the possibility of a strike by the Canada Border Services Agency in June, and most recently, the labour stoppage at Canada’s railways that shut down both Canadian National Railway and Canadian Pacific Kansas City last week.

Canada also moved to both shore up its auto sector defences and placate the Americans Monday, announcing it will match the U.S. on import tariffs applied to Chinese-made electric vehicles.

U.S. National Security Adviser Jake Sullivan, who travelled to the cabinet at the retreat Sunday night in large part to discuss China, said the U.S. wouldn’t tell Canada what it has to do, but did acknowledge being in lockstep would help.

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“Canada will make its own determinations, but the U.S. does believe that a united front, a co-ordinated approach on these issues benefits all of us,” he said.

Matching the 100 per cent tariff on EVs, which President Joe Biden announced, was not a surprise, but Canada’s decision to also match the exact 25 per cent tariff on steel and aluminum products was a little less certain. It is also now moving to look at whether to match planned U.S. tariffs on a host of other goods from China, including EV batteries and battery parts, critical minerals, semiconductors and solar panels.

On Monday night, the cabinet met with C.J. Mahoney, the former U.S. deputy trade representative who led the new NAFTA talks for the White House six years ago, and Steve Verheul, Canada’s former chief trade negotiator who led those talks for Trudeau and the Liberals.

The Tuesday schedule includes a conversation with Canada’s current ambassador in Washington, Kirsten Hillman, along with two former ambassadors, Frank McKenna and David MacNaughton.

The U.S. remains Canada’s most dominant trading partner, accounting for more than three-quarters of Canada’s exports last year.

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