Court Kills Trump Tariffs — Canada Seizes Trade Opportunity
Canada reacts after a Supreme Court ruling struck Trump’s tariffs, shifting focus to USMCA review talks and future trade negotiations.
Celebrations in Canada following the US Supreme Court's decision to strike down President Donald Trump's global tariffs were short-lived and subdued.
The High Court's decision, which included the "fentanyl" tariffs imposed by Trump on Canada, China, and Mexico, further solidified Canada's view that the levies were "wrong," US-Canada Trade Minister Dominic LeBlanc said on X.
But LeBlanc noted the challenges ahead in Ottawa: "Essential work" must be done to address the impact of levies on steel, aluminum, and automobiles, which Trump said will remain.
The Canada-US-Mexico trade deal, USMCA, which covers a market of more than 500 million people, is also under review.
The actual impact of the Supreme Court's decision on Canadian tariffs is limited.
Last year, the Trump administration imposed tariffs on Canada and Mexico, with Canada facing a 25% tariff, which was later raised to 35%, with the president arguing that both countries should do more to prevent migrants and the illegal drug fentanyl from reaching the US.
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But most of the trade covered by these "fentanyl" tariffs, approximately 85%, was already levy-free under the USMCA exemption.
LeBlanc's office declined to comment on Trump's announcement of a 10% global tariff to replace duties imposed under the International Emergency Economic Powers Act, or IEEPA, which was struck down by the Supreme Court.
The White House clarified that the USMCA exemption will continue under the new 10% tariff, which takes effect Tuesday.
Apart from remaining US tariffs on sectors like steel and automobiles, the biggest issue on Canada's US trade agenda is the USMCA review. This summer, the three partners will have to decide whether to extend the deal, which was negotiated during Trump's first term.
Free trade deals in North America have been in place in some form or another since the early 1990s and have created deeply integrated economies.
This week in Mexico, LeBlanc told reporters that both countries are "fully committed to a trilateral trade agreement."
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The Trump administration has been less enthusiastic about saying it wants to renew the USMCA, and officials have suggested that Washington would prefer to pursue separate bilateral deals with Canada and Mexico.
He also said he would meet with US Trade Representative Jamieson Greer in the coming weeks to discuss review negotiations, which are expected to begin quickly before the July 1 deadline.
This would be the first sign of formal trade talks between the US and Canada since Trump halted them last October, angered by an anti-tariff ad sponsored by the Canadian province of Ontario that was shown on US networks, including during the World Series.
Greer said in an interview on Fox Business earlier this week that negotiating with Canada has been "more difficult" than with Mexico.
"They continue to have some obstacles. They're refusing to sell US wine and spirits on their shelves," he said. "There are a number of issues that they haven't addressed and aren't paying attention to, and that poses a significant challenge and obstacle to starting real negotiations with them."
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Greer has previously cited dairy import regulations and a Canadian law called the Online Streaming Act, which requires US media companies like Netflix and Spotify to pay for supporting Canadian content, as other trade issues.
As difficult negotiations continue, Canada has sought to build trade relations outside the US, which currently buys about 75% of its exports, with a goal of doubling non-US exports by 2035.
Several Canadian business groups said Friday that uncertainty remains.
Dennis Darby, CEO of the Canadian Manufacturers and Exporters, said businesses are ultimately looking forward to a successful renewal of the USCMA that will "eliminate recurring trade barriers."
"Predictable, rules-based trade is essential for manufacturers on both sides of the border," he said.
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