A senior business leader suggests Prime Minister Mark Carney’s decision to remove retaliatory tariffs on the United States is a strategic move to cater to the White House as officials plan to review the Canada-United States-Mexico (CUSMA) free-trade agreement next summer.
“It’s really important when you’re considering the impact on the Canadian economy, to think about the bigger picture here, and presumably that’s what the Prime Minister is doing,” Catherine Fortin LeFaivre, senior vice president of international policy and global partnerships for the Canadian Chamber of Commerce, told BNN Bloomberg in a Friday interview. “The most important thing here is to set the conditions for the most favourable trade review as possible as we head into the CUSMA or USMCA review.”
The chamber says decisions made now will have ripple effects for supply chains, employers and consumers, and must be managed with care to preserve long-term competitiveness.
The organization represents over 400 local chambers and boards of trade and more than 200,000 business of all sizes, from all sectors of the economy nationwide.
Carney made an announcement to drop some counter-tariffs Friday, the day after a discussion with U.S. President Donald Trump. He said he received assurances from the president that scrapping counter-tariffs would kickstart negotiations on a new trade and security deal. The Prime Minister however will not remove retaliatory tariffs on U.S. steel, aluminum and autos.
LaFaivre said the decision has been met with mixed reactions as some businesses stand to benefit while others, like those in the steel and aluminum sectors, remain impacted.
“They’re quite disappointed that Canada hasn’t taken and is not taking a more forceful approach, and is actually conceding more,” said LaFaivre.
The Canadian Chamber says $3.6 billion in goods and services crosses the Canada-U.S. border every day, fuelling a $1.3 trillion annual trade relationship . The partnership supports 1.4 million American jobs tied to Canadian exports, 2.3 million Canadian jobs tied to U.S. exports and 50 per cent of bilateral goods trade between related companies underscoring the depth and integration between the two economies.
However, a recent report from Statistics Canada says exporters are shifting away from the U.S. market, diversifying supply chains amid the trade war. LeFaivre said the overall business sentiment remains cautious due to ongoing trade uncertainties.
“It’s very important when the federal government makes these decisions that they work really closely with those impacted sectors and with businesses as a whole to really look at the costs and benefits of doing this, and that they’re very surgical in those announcement,” said LeFaivre.
LeFaivre said there’s been many announcements over the past nine months and expects more as the two economies aim to sign off on a deal. She said the move shows the prime minister wants to pave a way to a favourable review for Canadians.
“I think there’s hope that with the CUSMA review, again, playing the long game... That will provide a little bit more stability but being realistic here, it’s probably just going to keep being a very bumpy, unpredictable road between now and then,” said LeFaivre.
