In a surprising shift, US President Donald Trump expressed admiration for Canada and a desire to meet with Prime Minister Mark Carney after the Canadian election, sparking hopes of easing tensions in their trade war.
The first call between US President Donald Trump and Canadian Prime Minister Mark Carney was described by Carney as ‘very constructive‘, while Trump called it ‘extremely productive‘. The conversation took place on Friday, amidst an ongoing trade war between the two nations.
A Shift in Tone?
Trump‘s tone on Friday stood in contrast to his past remarks about Canada, particularly his frequent jabs at Carney‘s predecessor, Justin Trudeau. However, after the call, Trump said he ‘loved Canada‘ and expressed a desire to meet with Carney after the Canadian election. This shift in tone has sparked hopes among some Canadians that Trump may be willing to ease tensions.
Trade Relations on the Line
The US has already partially imposed a blanket 25% tariff on Canadian goods, along with a 25% duty on all aluminium and steel imports. Canada has retaliated with about C$60bn ($42bn; £32bn) of tariffs on US goods. The new car tariffs will come into effect next month, the White House has said. Taxes on parts are set to start in May or later.
The US-Canada trade war began in May 2018, with the US imposing tariffs on Canadian steel and aluminum imports.
Canada retaliated by imposing tariffs on US goods such as whiskey, chocolate, and coffee.
The dispute centered around Section 232 of the Trade Expansion Act, which allowed the US to impose tariffs based on national security concerns.
Statistics show that bilateral trade between the two countries totals over $600 billion annually, with the US accounting for approximately 85% of Canadian exports.
The trade war was eventually resolved in October 2018, when the US and Canada signed a revised NAFTA agreement.
Consequences for Canada’s Auto Industry
The proposed vehicle tariffs could impact as many as 500,000 jobs in the Canadian auto industry. Carney has vowed to impose retaliatory tariffs with ‘maximum impact‘ on the US if Trump moves ahead with threatened levies on April 2. The Canadian prime minister’s office said the two leaders agreed to begin comprehensive negotiations about a new economic and security relationship immediately following the election, which will be held on April 28.
A New Era for Canada-US Relations?
The call between Carney and Trump marked an important shift in the tone of their relationship. While some have expressed concerns that Carney‘s statement may mean he is open to conceding to US pressure, others see it as a sign that the two leaders are willing to work towards a new era of cooperation. The outcome of these negotiations will be crucial for Canada‘s economy and its relationships with the US and other countries.
Canada and the United States share the world's longest international border, spanning over 8,893 kilometers.
The two nations have a long history of trade, cultural exchange, and cooperation.
In 1864, they signed the Reciprocity Treaty, establishing free trade between the two countries.
The Canada-US Free Trade Agreement was ratified in 1989, followed by the North American Free Trade Agreement (NAFTA) in 1993.
Today, the US is Canada's largest trading partner, and Canada is the US' second-largest supplier of oil.
