Key Takeaways
- U.S. President Donald Trump spoke positively about Canada but was non-committal about restarting trade talks
- Trump had a "very good, very productive" talk with Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum
- Trade relations between the U.S., Canada, and Mexico have been affected by Trump’s tariffs
- The Canada-U.S.-Mexico Agreement on trade (CUSMA) is set to enter its mandatory review period next year
- The deal could expire in 2036 if the three parties do not agree to renew it
Introduction to the Situation
The relationship between the U.S. and Canada has been a topic of interest in recent times, especially with regards to trade. On Sunday, U.S. President Donald Trump expressed his admiration for Canada, but when asked about the possibility of restarting trade talks with the country, he gave a vague response, saying "We’ll see." This lack of commitment from the President has raised questions about the future of trade relations between the two nations. Trump’s comments came after a "very good, very productive" talk with Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum on the sidelines of a World Cup draw event.
The Trade Talks
The trade talks between the U.S. and Canada were suspended in October after the U.S. president took issue with anti-tariff ads run by the province of Ontario during the World Series. Since then, there has been uncertainty about the future of trade relations between the two countries. Trump’s non-committal response to the question of restarting trade talks has done little to alleviate this uncertainty. Despite this, Trump spoke highly of Canada, saying that they are "very tough traders" and that he has a "very good relationship" with the prime minister. He also acknowledged that Canada is a "special place" and praised their ice hockey skills.
The Impact of Tariffs
The trade relations between the U.S., Canada, and Mexico have been significantly impacted by Trump’s tariffs. In August, Trump boosted duties on Canada to 35 per cent, while Mexico was hit with 25 per cent duties. Both countries are also being affected by the president’s separate tariffs on steel, aluminum, automobiles, lumber, and copper. The Canada-U.S.-Mexico Agreement on trade (CUSMA) has provided some protection to Canada and Mexico, shielding them from broad-based tariffs. However, the agreement is set to enter its mandatory review period next year, and there are concerns about its future.
The Future of CUSMA
The CUSMA agreement is set to expire in 2036 if the three parties do not agree to renew it before then. Mexico and Canada have been seeking tariff off-ramps and making the case for duty-free continental trade as Trump threatens to pull the U.S. out of the agreement. The mandatory review period next year will provide an opportunity for the three countries to re-evaluate the agreement and make any necessary changes. However, with Trump’s unpredictable approach to trade, it is unclear what the future holds for CUSMA. The agreement has been beneficial to all three countries, providing a framework for trade and investment. It is likely that Canada and Mexico will continue to push for the agreement to be renewed, but Trump’s stance on the issue remains uncertain.
Conclusion
In conclusion, the trade relations between the U.S., Canada, and Mexico are complex and have been affected by Trump’s tariffs. While Trump has spoken positively about Canada, his non-committal response to the question of restarting trade talks has raised questions about the future of trade relations between the two countries. The CUSMA agreement is set to enter its mandatory review period next year, and there are concerns about its future. It is likely that the three countries will continue to negotiate and work towards a mutually beneficial trade agreement, but the outcome is far from certain. As the situation continues to evolve, it will be important to monitor developments and assess the potential impact on trade relations between the three nations.
