Ontario Premier Doug Ford Warns of Potential U.S. Trade Disruption
Ontario Premier Doug Ford has raised concerns about the potential for a sudden shift in Canada’s trade relationship with the United States, particularly under the administration of former President Donald Trump. He warned that Trump could “pull the carpet out from underneath us” by revoking or altering the Canada-United States-Mexico Agreement (CUSMA), which was negotiated during his first term.
Ford emphasized that Ottawa must be prepared for this possibility as early as November. His comments came following a private meeting between Canadian premiers and Prime Minister Justin Trudeau, where discussions centered on the escalating trade tensions with the U.S. The situation has worsened after the imposition of a 35% baseline tariff on goods not covered by CUSMA, which took effect after negotiations failed to reach an agreement by August 1.
Impact of Tariffs on the Canadian Economy
The new tariffs have already begun to affect various sectors of the Canadian economy. According to a readout from the Prime Minister’s Office, the group discussed strategies to support workers and businesses impacted by these measures. They agreed to accelerate efforts to mobilize capital and investment, diversify supply chains, and strengthen domestic production capacity.
The readout also highlighted the importance of leveraging Canadian expertise to mitigate short-term economic impacts and build long-term resilience. While the federal government remains committed to securing the best deal for Canadians, there are growing disagreements among provinces on how to respond to the trade war.
Provincial Disagreements Over Trade Strategy
Ontario and Saskatchewan are at odds over the approach to dealing with U.S. tariffs. While Ford advocates for immediate retaliatory measures, Saskatchewan Premier Scott Moe is urging a more measured response. Moe suggested that Canada might consider removing some counter-tariffs that are harming local businesses.
Moe pointed to Saskatchewan’s efforts to support the steel industry by accelerating Crown procurement. He also praised the federal government’s work in strengthening trade ties with other countries, including Mexico, amid ongoing challenges with China’s canola oil and meal tariffs.
Calls for Industrial Growth and Economic Stimulus
Ford has called for large-scale industrial projects that could boost national morale and utilize Canadian steel. He proposed initiatives similar to building an aircraft carrier and urged the federal government to cut taxes and lower interest rates. Ford criticized the Bank of Canada’s current rate of 2.75%, calling for a reduction to stimulate the economy.
He also advocated for eliminating the Harmonized Sales Tax (HST) on homebuyers, not just first-time buyers, to stimulate the housing market. Ford expressed confidence in the prime minister’s efforts to secure a fair trade deal with the U.S., citing a recent positive conversation with U.S. Commerce Secretary Howard Lutnick.
Ongoing Diplomatic Efforts
Prime Minister Trudeau has not spoken to Trump recently but indicated he would reach out when it makes sense. He noted that 85% of trade with the U.S. remains tariff-free due to CUSMA, though sector-specific tariffs, such as those on steel, aluminum, and copper, continue to apply.
Trudeau also hinted at the possibility of lifting counter-tariffs if it benefits Canadian industries. Foreign Affairs Minister Anita Anand and Finance Minister François-Philippe Champagne are currently in Mexico City, engaging with officials and businesses on trade issues.
Political Reactions and Future Outlook
The Opposition Conservatives are criticizing the government’s response to the trade war, highlighting what they see as a lack of strong action. A fundraising email from the party stated that while Trudeau campaigned on “elbows up,” his approach has been too passive in the face of U.S. tariffs.
As the situation continues to evolve, the focus remains on finding a balanced strategy that protects Canadian interests while maintaining strong trade relations with the U.S. The coming months will be critical in determining how Canada navigates this complex and rapidly changing landscape.