A former high-ranking Canadian trade negotiator, Tim Sargent, has indicated that an agreement with the Trump administration for tariff relief on Canadian steel and aluminum exports to the United States is on the horizon. This development follows discussions between Trump and Canadian Prime Minister Mark Carney at the White House.
Speaking at an event in Washington, Sargent highlighted the mutual interest of both parties in swiftly resolving the steel and aluminum negotiations. He suggested that a potential agreement might include a tariff-rate quota system, allowing a specified amount of Canadian steel into the U.S. annually with minimal tariffs, while imposing significantly higher tariffs on imports exceeding the set quota.
The ongoing imposition of a 50 percent tariff on steel and aluminum imports from Canada and other countries by the U.S. since June has prompted concerns from American manufacturers about competitiveness and pricing. Following the recent meeting between Trump and Carney, top U.S. trade officials have been directed to expedite deals on steel, aluminum, and energy.
Reports suggest that a deal could be finalized for signing at the upcoming Asia-Pacific Economic Cooperation (APEC) summit, with both Trump and Carney possibly announcing the agreement. However, Carney’s team has cautioned against heightened expectations regarding an immediate deal.
While optimistic about the prospects of reducing tariffs on steel and aluminum, Sargent expressed skepticism regarding the renegotiation of the Canada-U.S.-Mexico Agreement (CUSMA) under the current protectionist U.S. administration. He emphasized the challenge of negotiating a free-trade agreement with an administration that seeks reduced market access.
Philip Luck, a former U.S. State Department deputy chief economist, underscored the potential for Canada and Mexico to secure exemptions from tariffs by redirecting the administration’s focus towards China’s economic impact on the U.S. The outcome of future North American trade talks is expected to hinge on the administration’s priorities regarding domestic production and trade relations with China.