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The Trump administration’s sectoral tariffs on Canadian steel, aluminum, and automobiles are more urgent than the Canada-U.S.-Mexico Free Trade Agreement (CUSMA) and are currently the focus of Canadian negotiators, Canadian ambassador to the U.S. Mark Wiseman said on Monday.
While most of Canada’s exports are compliant with CUSMA, and therefore exempt from U.S. President Donald Trump’s tariffs, some sectors are subject to tariffs under Section 232 of the U.S. Trade Expansion Act.
“Those tariffs are the ones that are biting in terms of impact on the Canadian economy, Canadian business, Canadian workers and those sectoral tariffs are sitting outside, and are arguably in violation of, CUSMA,” Wiseman said at an event in Toronto Monday.
The sectoral tariffs are one issue Canada needs to “find a path forward on quickly,” he said.
“The focus of the negotiating team led by Minister (of Canada-U.S. Trade Dominic) LeBlanc and our chief negotiator (Janice Charette), the focus for us is trying to find a way through those sectoral 232 tariffs. That’s the issue. So, we can take a deep breath on the CUSMA review,” he said.
The July 1 deadline for a review of the trade deal is “not a cliff,” Wiseman said.
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“We have an agreement with the United States and Mexico that expires at 11.59 p.m. on June 30, 2036. We all have to keep that in mind. It is a 16-year agreement that was signed in 2020,” he said.
The July 1 date is only the start of the renewal process and not a “one-day deal,” he said.
“We’re not falling off of (a) cliff on July 1,” Wiseman said.
“Renewal of the agreement means you restart the 16-year clock. So, in effect, a renewal of agreement means you extend it from 2036 to 2042. That’s what’s up for grabs in terms of renewal. If it’s not renewed, the agreement remains in force until 2036,” he added.
That is not the case with the sectoral tariffs, however.
“Unlike everything else under CUSMA, the default is they’re staying in place, and they are incredibly painful to wide sectors of the Canadian economy,” Wiseman said.
Earlier this month, Trump signed a proclamation amending his Section 232 national security tariffs on some aluminum, steel and copper imports, the White House said.
The proclamation lowers tariffs on some steel and aluminum derivative products, including certain types of agricultural machinery and residential heating, air conditioning and ventilation equipment to 15 per cent from 25 per cent previously.
It makes mobile industrial equipment, such as bulldozers and forklifts, subject to a 15 per cent tariff “when imported from trade deal countries that are entitled to such treatment,” the White House said in a statement.
The order also allows foreign companies to qualify for a 10 per cent tariff if “their capital equipment includes at least 85 per cent U.S. melted and poured or smelted and cast steel or aluminum by weight.”
–with files from Associated Press
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