Canada could avoid tariffs if a prompt border action is taken, Trump’s commerce secretary nominee says
U.S. tariffs against Canada could be imposed in two steps, with the first blow coming as early as Saturday if Ottawa can’t show it has “shut” its border to illegal immigration and fentanyl smuggling, says Donald Trump’s nominee to oversee the contentious move.
The second blow would come later, after April 1, the deadline for U.S. trade officials to report back to Trump on what the U.S. president views as unfair trade practices by America’s competitors and allies alike, said Howard Lutnick, Trump’s nominee for commerce secretary.
Lutnick, who met with Prime Minister Justin Trudeau in Poland on Monday, suggested during his confirmation hearing in Washington on Wednesday that there may an off-ramp in the short term if the president’s border concerns are addressed.
“The (drug) labs in Canada are run by Mexican cartels so this (immediate) tariff model is simply to shut their borders,” said Lutnick. “So it is not a tariff per se. It is an action of domestic policy. Shut your border and stop allowing fentanyl into our country, killing our people.
“As far as I know, they are acting swiftly, and if they execute it, there will be no tariff. And if they don’t, then there will be,” Lutnick said.
Trudeau briefed premiers during a virtual meeting Wednesday on his talks with Lutnick, which a federal official said came at Canada’s request and were held before a ceremony marking the 80th anniversary of the liberation of the Auschwitz-Birkenau concentration camp.
Trudeau also briefed premiers on his decision to adopt a tougher initial response of retaliatory counter-tariffs on American products than had previously been planned, saying Canada would leave room to escalate its countermeasures later, according to provincial and federal officials, who the Star agreed not to identify in order to speak frankly about the private discussions.
A federal official said Trudeau continues to say everything must be on the table — including energy export controls opposed by Alberta and Saskatchewan — but that Canada’s response depends on what Trump does.
With the immediate prospect of U.S. tariffs looming, and under pressure by provinces, Ottawa is prepared to impose countermeasures against a broader list of American products than it had first planned. Countermeasures against more than $37 billion worth of imports would be the next step, which could ramp up to surcharges on $150 billion worth of American imports, according to officials.
Sources also said several premiers pressed Trudeau to accelerate defence spending to meet, if not exceed, NATO’s target of two per cent of GDP, and bolster Arctic security.
A federal official said Alberta Premier Danielle Smith went so far as to suggest Canada should offer to allow the U.S. military to operate bases in Canada’s north.
Ivana Yelich, a spokesperson for Premier Doug Ford, who is campaigning for a new electoral mandate to respond to Trump, said in a statement that, “with tariffs now potentially days away, the premier is glad to see that the federal government’s initial retaliatory actions are more aligned with the proportional, dollar-for-dollar response he’s been advocating for, concentrated in states we know will do the most damage.
“Canada won’t start this fight, but we must be ready to respond with strength when President Trump imposes tariffs.”
Ford, she said, stressed the “urgent need for the federal government to invest more in Canada’s military and demonstrate how it is making Canada’s border more secure.
“The federal government also needs to engage with the Trump administration and all U.S. lawmakers on a vision that achieves American objectives of lower costs, energy security and economic growth — the kind of vision the premier has been promoting as part of Fortress Am-Can. Had the federal government done all of this sooner, we might have been able to avoid tariffs.”
Meanwhile, cabinet members like Foreign Affairs Minister Mélanie Joly and Public Safety Minister David McGuinty continue to scramble to do just that — avoid tariffs — by lining up meetings in Washington with counterparts.
Alberta’s Smith said the federal commitment and action by provinces on their borders have been “noticed” in Washington.
“The question of whether it will be enough, I guess we’ll find out on February the first,” she said.
Lutnick’s testimony elaborated on his and Trump’s staunch pro-tariff views.
In the long run, Lutnick said, Trump wants to increase America’s penetration into markets around the world. He cited barriers to U.S. dairy products in Canada as a particular irritant, and said Trump aims to bring more investment and manufacturing to America, especially in sectors like semiconductors, auto and artificial intelligence.
Under questioning, Lutnick said his preference is not for “targeted tariffs” against specific sectors or countries, but for broad, across-the-board tariffs against America’s biggest competitors, even if they are some of its closest allies.
“We are treated horribly by the global trading environment,” he said. “They all have higher tariffs, non-tariff trade barriers and subsidies. They treat us poorly. We need to be treated better. We need to be treated with respect, and we can use tariffs to create reciprocity. So fairness and respect.”
Lutnick said America’s “great” allies in Europe, Japan and Korea “have taken advantage of our good nature,” pointing to European barriers to American beef or fertilizer exports, and to “steel in Japan and appliances in Korea.”
He said “the big tariff view is going to be studied,” referring to Trump’s executive order asking the Commerce Department and the United States Trade Representative’s office to report back by April 1 on measures to correct what the president sees as unfair trade deficits with countries like China, Canada and Mexico.
But he did not specify what tariff rate Trump might impose on Canadian imports on the weekend.
Trump has not backed off his vow of 25 per cent tariffs in the past week.
This article was first reported by The Star
