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Prime Minister Mark Carney and U.S. President Donald Trump at their first meeting at the White House in Washington, on May 6.Adrian Wyld/The Canadian Press
Mark Carney heads to Washington Monday, with his government setting expectations low for talks on tariffs and security with Donald Trump, even as damage mounts from the U.S. President’s protectionist levies.
Two senior government officials said not to expect any breakthroughs at the Tuesday White House meeting and emphasized that this will just be a working visit.
One U.S. industry source said the Trump-Carney meeting came together because the pair ran into each other last month at the United Nations and agreed to sit down and talk at more length. The Globe and Mail is not identifying the three sources because they were not authorized to discuss the matter publicly.
It’s Mr. Carney’s second trip to meet Mr. Trump since taking office. In May, he returned without any measurable progress in ending a costly trade war, but avoided any sign of conflict with the mercurial President. This time, the Prime Minister will be under pressure to return with some deliverables, given mounting tariffs.
Former officials, speaking on the basis of their experience with the last Trump administration, cautioned that Mr. Carney has a large and risky job ahead of him.
Former U.S. ambassador to Canada Kelly Craft said in an interview that the burden is on Mr. Carney to strike a trade and security deal with Mr. Trump on Tuesday.
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Any Canadian proposal that is presented at the White House must encompass more than just trade and investment, she said, and deal also with defence spending and other national-security measures.
The former ambassador remains on good terms with the President and is well connected to senior figures in the U.S. administration. “I think it is incumbent on Carney to bring this to an end,” Ms. Craft said.
Among the biggest priorities for Canada are the U.S. tariffs on steel, according to Brian Clow, who served as deputy chief of staff to former prime minister Justin Trudeau. Canadian steel producers have been particularly hard hit by the 50-per-cent levies on this country’s steel and aluminum sectors imposed by Mr. Trump under Section 232 of the Trade Expansion Act.
“The steel sector is surely top of the Carney government’s list to gain any improvement,” he said. “The steel companies are suffering badly and can’t survive without massive government funding.”
The Aluminum Association of Canada said Sunday that it doesn’t anticipate a breakthrough from the Carney-Trump meeting. “We don’t expect anything to come out on aluminum,” said Jean Simard, CEO of the association.
He said he considers this trip highly important but more about “nurturing the relationship.”
“At best,” Mr. Simard said, he would hope for “a signal from the President to his entourage to start focusing on a U.S.-Canada agenda including 232 sectors.”
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Mr. Clow said he’d be surprised if Mr. Carney returns home with a deal. “Getting to a deal on Tuesday is a tall order because Trump feels little incentive to scale back his cherished tariffs,” he said. “I’d be surprised if there’s a tariff-free deal on offer from the U.S., either overall or in a specific sector like steel. No country has achieved that.”
It’s still an open question whether Mr. Carney will meet congressional leaders while in Washington, including Mike Johnson, Speaker of the House of Representatives, and John Thune, Republican majority leader in the Senate.
On the United States-Mexico-Canada Agreement, Mr. Trump’s top trade negotiator last week signalled ambivalence about a three-way trade pact that includes both Canada and Mexico.
Jamieson Greer, the U.S. Trade Representative (USTR), said Washington’s renegotiation of the USMCA will mostly be conducted separately with each country, adding that the trilateral accord doesn’t reflect the reality that Washington’s trade problems and frictions with its two neighbours are fundamentally different.
Mr. Greer, onetime chief of staff to former USTR Robert Lighthizer during Mr. Trump’s first term as president, spoke to The Economic Club of New York Sept. 30 about the scheduled review of the USMCA. It’s a reassessment that is expected to include demands from the U.S. for changes to tilt the pact further in its favour.
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Mr. Greer also accused Mexico of trade conduct that doesn’t comply with the USMCA and warned that it doesn’t make sense to extend the deal or update it if Mexico is running afoul of the pact’s rules.
“The U.S.-Canada relationship is so different from the U.S.-Mexico relationship in so many ways,” he said. “If you look at NAFTA and then USMCA, it’s almost like: Why did we bundle it all together? I mean, the answer is, it looks, it sounds nice – right? It’s like a geopolitical kind of thing, NAFTA,” he said, referring to the North American free-trade agreement.
“But the reality is we have issues with them, with the Canadians, that are specific to Canada, and issues with the Mexicans are specific to Mexico,” he said.
“I think we’re going to spend a lot of time just one-on-one with each of these countries.”
Mr. Greer said the Mexicans are running afoul of the USMCA on many fronts, including energy, telecommunications, services and agriculture. “It doesn’t make a lot of sense to talk about extending the USMCA or updating it when Mexico is not even complying with important parts of it.”
Ms. Craft noted that since Mr. Trump took office, Britain, Indonesia, Vietnam, South Korea, the Philippines, Japan and the European Union have all managed to reach trade deals.
“Why hasn’t Canada been able to do what all these other countries have succeeded in doing?” she said. “The answer is because Trump sees Canada, at best, as an unreliable ally which is not pulling its weight, and at worst an obstacle to secure peace in the Middle East.”
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The President was unhappy that Canada recognized a Palestinian state, which Ms. Craft said was interpreted as rewarding “Hamas for the brutal October 7 attack.” Canada “is barely spending enough on defence to possibly reach its commitment to spend 2-per-cent GDP in April and has no feasible plan to reach 5 per cent,” she said.
Ms. Craft said Canada needs to align trade policies regarding China more closely with the United States.
“On trade, Canada has been fighting to allow more auto parts of Chinese origin into the United States, which violates the objective of the USMCA to increase North American content in product we trade,” she said. “Canada needs to stop undermining the USMCA by helping China trans-ship Chinese-made content into the U.S.”
A Mexican industry source said a deal between the U.S. and Canada seems unlikely at this point because Trump administration officials appear to still be unhappy with Ottawa for imposing retaliatory tariffs earlier this year.
The White House has tried to divide Mexican officials from their Canadian counterparts by telling the Mexicans that, if they align themselves with the Canadians, the result will be worse for Mexico because the Trump administration wants to make Canada pay for its earlier retaliation, the industry source said.
Canada imposed retaliatory tariffs on the U.S. under former prime minister Justin Trudeau. After taking office, Mr. Carney partly rolled them back in April and then rolled them back further in August.
Since returning to the White House earlier this year, Mr. Trump has hit Canada with a string of tariffs: 50 per cent on steel and aluminum, 25 per cent on autos – with a carve-out for U.S. parts – and 35 per cent on any goods traded outside the USMCA, with the exception of oil, gas and potash, which are subject to 10-per-cent tariffs.
On Sept. 30, Mr. Trump imposed a new 10-per-cent tariff on Canadian softwood-lumber shipments, raising the total levy on softwood from Canada to more than 45 per cent.
