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WASHINGTON, D.C. — Canada-U.S. trade tensions are at a fever pitch after U.S. President Donald Trump unveiled a series of executive orders on Tuesday banning some alcoholic beverages and dairy products from being imported to the United States.
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Trump’s announcement came in response to Canadian retaliatory tariffs that went into effect this week on nearly $28 billion worth of U.S. imports, which were part of a tit-for-tat escalation in the trade war between the two countries.
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National Post reached out to Charles Benoit, trade counsel for the Washington-based Coalition for a Prosperous America, a U.S. advocacy group that champions tariffs and industrial protection. Benoit argues that more home market protection — not freer trade — would benefit both the United States and Canada.
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The following Q&A has been edited and condensed for clarity.
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From your perspective, why did the Canada-U.S. trade talks break down?
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Charles Benoit: What they’ve really coalesced around is harmonization of the steel, aluminum, and automotive tariffs. Ambassador (Jamieson) Greer was explicit about this in his big interview with CBC — that’s the U.S. line. And Prime Minister (Mark) Carney has made this about Canada’s ability to have other trade deals, which lines up with what Greer was more specific about: harmonized steel, aluminum, and automotive.
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Those were the three big Section 232 actions that were launched back in the first Trump administration, so it makes sense why those three sectors were chosen.
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I think the big thing to look at is — what has Mexico done that Canada hasn’t? Mexico’s not negotiating any new FTAs (free trade agreements). Canada’s still negotiating an FTA with India, for example.
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At one point, the language of the (now scuppered Canada-U.S. interim deal was), “At least consult with us before you commit to duty-free cars, steel and aluminum tariffs in new FTAs,” and that seems to have been too far for Carney.
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If you had to really pick one thing that caused Canada to walk away, I think it’s that. I think that they wanted the ability to offer unlimited duty-free on steel, aluminum, and automotive, specifically in their India FTA.
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Your coalition campaigned against a prospective deal to reduce U.S. tariffs on Canadian downstream aluminum. Why?
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A core constituency of our group is metal fabricators. We represent all sorts of industry and also agriculture, but we’ve got this backbone of metal fabricators.
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At the end of the day, cross-border price competition doesn’t work when metal costs a lot more in the United States. For aluminum, it’s off the charts. We made the decision as a country to tariff primary aluminum, and as a result, aluminum is a dollar a pound more in the United States than in Canada or Mexico. You just can’t compete with that spread.
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One of the things that was on U.S. offer in the Canada deal was reducing the tariff on downstream aluminum goods. From what was reported, the tariff concession went from 50 per cent to 25 per cent for Canadian aluminum goods.