Would Trump’s 20% auto tariff be Canada’s ’ruination’? We assess the damage

Roman Schwartz
September 14, 2018

A deal would see Canada join a preliminary trade agreement the Trump administration struck last month with Mexico.

Uncertainly over the future of NAFTA, which underpins $1.2 trillion in trade, is weighing on markets as well as the Canadian and Mexican currencies.

"I believe things are going to work out".

"I think we understand there are certain issues on which we will need to compromise", one of the sources said when asked about increased dairy access for the USA industry. "There (just) seems to be a wild card on there".

"In some countries, including Canada, a tax on cars would be the ruination of the country".

New chapters governing the digital economy and stronger intellectual property, labor and environmental standards could also work to the benefit of USA companies, possibly helping Trump to fulfill his campaign promise of creating more American jobs.

Trump has notified Congress he intends to sign the trade deal reached last week with Mexico by the end of November, and officials said the text would be published by around October 1.

"It allowed them to export milk solids on the world market and below prices that cut into our opportunity for our dairy people to have access to that world market", Perdue said.

In return for concessions on dairy, Canada could request USA concessions on the so-called Chapter 19 dispute resolution mechanism that allows Canada to combat US anti-dumping duties that Ottawa regards as unjustified.

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Freeland said on Friday she and Lighthizer were making "very good progress" in talks to save NAFTA amid increasing Canadian optimism that a deal can be reached. Canada and the U.S.

"It seems even if we give a lot, the USA keeps asking for more", said Mr. Kronby, an worldwide trade lawyer with Borden Ladner Gervais. "That's important and that's been a success due to Canada and the United States working together and due to Mexico showing some significant flexibility over the summer", Freeland said.

"I think this is a complicated time for employees".

He told reporters in Winnipeg on Tuesday, "We are better off having no NAFTA than a bad deal for Canada". But he noted that the pain would be felt on both sides of the border.

A late day comment from Pres. Trump boosted the precious metal and the Canadian dollar where he said "Trade talks going well".

US President Donald Trump also said the talks, which both countries intensified in recent weeks, were coming along well. "I can - all I have to do is tax cars - it would be devastating".

Talks were expected to resume this week between the two.

"Even if we gave him everything he wanted - and there is no way we would ever do that - who can say whether he'd be satisfied?" said one source, who declined to be identified given the extreme sensitivity of the situation. But as an October 1 deadline to renegotiate NAFTA looms, Canada is prepared to offer similar concessions on the dairy industry to those that it agreed to in free trade deals with the European Union and Pacific Rim nations, the sources said. "That's not who we are", Craft said in prepared remarks.

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