The Decibel Why the absence of a U.S. trade deal might be a good thing
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Aug 7, 2025 Tony Keller, a Globe columnist with deep expertise in trade relations, joins to discuss the stalled U.S.-Canada trade negotiations and rising tariffs. He dives into the implications of Trump's aggressive trade strategy and what it means for Canadian industries, especially steel and lumber. Keller unpacks the significance of Canada’s negotiation tactics and the potential benefits of avoiding a deal altogether. He also touches on the evolving context of international trade agreements amidst ongoing uncertainties.
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Canada's Tariff Burden Is Uneven
- The 35% US tariff on Canada applies only to a small fraction of exports outside of USMCA coverage.
- Steel, aluminum, and lumber face higher tariffs with no USMCA exemptions, hurting specific sectors more.
Fentanyl Tariffs Are A Pretext
- The 35% tariff against Canada was justified legally by fentanyl claims but acted more as a pretext.
- Trump uses tariff powers opportunistically, with multiple tariff categories targeting Canada.
Current Tariffs Hurt Canada Moderately
- Canada's economy faces real but limited harm so far from tariffs, aided by USMCA protection.
- Damage could worsen if US disrupts USMCA or increases tariffs beyond current levels.