The United States and Canada appeared close to completing a sweeping trade agreement after US President Donald Trump put a planned new wave of punishing tariffs on hold.
“We’ve come to a deal with Canada,” Mr Trump said, while stressing that it remained “subject to finalisation of documents.”
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Canadian Prime Minister Mark Carney struck a more measured tone. In a social media post, he said Ottawa and Washington “are now moving towards an agreement.”
The proposed US tariffs, set at 50%, had been scheduled to come into force today on selected Canadian goods.
Mr Carney praised Canada’s trade minister, Dominic LeBlanc, and Mr Trump’s chief negotiator, Jamieson Greer, for making “significant progress” in the talks.
In a separate social media post, Mr LeBlanc said he had met Mr Greer again in Washington on Wednesday and that both countries were “working collaboratively towards a finalised agreement.”
After the meeting, Mr Greer, the US trade representative, said he was confident the two sides had reached an understanding that would “strengthen the North American economy.”
“While we certainly, I think, have eliminated some of the irritants that we’ve had over the past year, we also are taking a strong foot forward on the next steps,” he said, according to CNBC.
Mr Carney said late Tuesday that the agreement still required further work before it could be considered final. The details of any prospective deal have not been made public.
Mr Trump said earlier that the arrangement would help US farmers, who have long complained about limited access to Canadian markets.
Trucks passing over the Peace Bridge between Canada and the US in Fort Erie, Ontario
The White House said Canada’s 50% tariffs were justified by what it called “discriminatory treatment” of US alcohol, automobile and dairy products.
Mr Carney said the emerging agreement would secure “the best terms in each of Canada’s most important strategic sectors and (provides) greater certainty about our future trading relationship.”
Canadian economic activity has been affected by Mr Trump’s tariffs on autos, steel, aluminum and forest products. Winning exemptions from those duties has been a central objective for Ottawa during weeks of negotiations.
Canada also confirmed on 1 July that it wanted to renew the existing North American free trade agreement. Mr Trump rejected that approach and demanded substantial revisions.
The two countries have spent weeks in high-pressure negotiations over a revised trade arrangement.
Political concerns
“It’s not unusual for a trade negotiation to go right up to the deadline,” former US commerce official Christopher Padilla said.
He believes the Trump administration used the threat of fresh tariffs to seek early concessions from Canada while the countries negotiate the renewal of the US-Mexico-Canada free trade agreement (USMCA).
Mr Padilla also cautioned that Mr Trump has “a history of lashing out against allies when he is frustrated on other fronts,” including when he fails to get what he wants from countries such as Iran, China or Russia.
Oxford Economics expects manufacturers in the cement, paper, printing, wood, clothing and electronic equipment industries to face the greatest impact.
After the US Supreme Court struck down many of Mr Trump’s global tariffs earlier this year, the president turned to an untested legal provision to impose the new duties aimed at Canada.
The US tariffs will exempt Canadian energy, potash and goods already subject to sector-specific duties. They are, however, expected to apply to products covered by the USMCA.
