Canada And U.S. Prepare For Trade Talks After Election

OTTAWA — Liberal leader Mark Carney has announced that Canada and the United States will initiate comprehensive negotiations for a “new economic and security relationship” immediately following the Canadian election. This announcement came after a phone call on Friday morning, March 28, 2025, between Carney and U.S. President Donald Trump, who described the discussion as “extremely productive.”

In a statement released by the Prime Minister’s Office, Carney characterized the call as “constructive.” He informed Trump that Canada would implement new retaliatory tariffs to safeguard the Canadian economy and its workers, set to take effect next week, following Trump’s promised round of reciprocal tariffs on April 2, 2025.

Trump, in his social media post, indicated that he and Carney agreed on many matters and expressed his intention to meet with Carney immediately after the election to “work on elements of politics, business, and all other factors.” Carney emphasized his commitment to working hard during the election to “earn the right to represent Canada” in these crucial discussions.

When asked about Canada’s plan for retaliatory duties, Trump responded that he “absolutely” would respond with large-scale tariffs but focused primarily on the “very good conversation” he had with Carney. “We had a very good talk, the prime minister and myself,” Trump stated in the Oval Office. “And I think things are going to work out very well between Canada and the United States.”

Vice-President JD Vance took a firmer stance regarding any retaliatory tariffs, asserting that Canada “doesn’t have the cards” to win a trade war against the U.S. He further claimed that Canadian leadership had forced American farmers and manufacturers to operate under “an unfair set of rules.”

These developments come in the wake of Trump’s executive order on Wednesday, March 26, 2025, which imposes a 25 percent tariff on automobile and auto part imports to the U.S. starting April 3, 2025. Ontario Premier Doug Ford stated that U.S. Secretary of Commerce Howard Lutnick indicated these auto tariffs would not apply to Canadian-made vehicles with 50 percent or more American parts.

The implications of these tariffs are already being felt. The packaging company Sonoco Products Co. has reported negative impacts from Trump’s earlier 25 percent tariffs on aluminum and steel, which were implemented earlier this month. The uncertainty surrounding these tariffs has led to layoffs and pauses in local investment, according to mayors from Canada, Mexico, and the U.S. who gathered in Washington for a summit.

Toronto Mayor Olivia Chow expressed concern over the chaos and trade wars, stating, “We have many decades of trading history and friendship. So that remains strong. It’s the back and forth, the chaos, the trade war that is hurting Americans, Canadians, Mexicans — we are basically saying, ’Please stop it’ and we are saying it in one voice.”

Columbia Mayor Daniel Rickenmann highlighted the anxiety in his South Carolina city, which relies heavily on automotive and aeronautics industries dependent on trade. He urged the administration to engage in discussions with both countries to ensure fair trade practices.

As the trade war escalates, many Canadians are reconsidering their travel plans to the U.S. A new report from travel data firm OAG revealed that planned visits to the U.S. are expected to drop by 70 percent month over month. This decline is anticipated to significantly impact airline seat capacity during the peak travel months of July and August 2025.

Toronto-based travel expert Barry Choi noted that certain U.S. cities, particularly Florida and border towns that typically attract Canadian visitors, will feel the effects more acutely. “Generally speaking, if we are talking about hotspots for sure, Florida or those border cities which get Canadians on DYA trips are going to get hit really, really hard,” Choi said.

Laura Macneil, a Toronto resident who usually travels to the U.S. three to four times a year to visit family, is now reconsidering her plans. “I have two brothers that live in California, and it’s become incredibly unaffordable for Canadians to travel to the U.S.,” she said, reflecting the growing concerns among Canadians regarding costs associated with cross-border travel.

In light of these findings, major Canadian airlines such as Air Transat and Air Canada are monitoring travel patterns but have yet to make significant adjustments to flight schedules. The ongoing trade tensions and the looming tariffs are prompting many to rethink their travel plans, adding another layer of complexity to the already strained Canada-U.S. relations.

As the April 28 election date approaches, Carney’s government faces the dual challenge of managing trade relations with the U.S. while addressing domestic concerns raised by the ongoing trade war. The potential for retaliatory tariffs and their implications for the Canadian economy remain a pressing issue for voters.

The Canadian government is also preparing to engage with U.S. officials to advocate for fair trade practices. Trade Minister Dominic LeBlanc is expected to intensify discussions with U.S. Secretary of Commerce Howard Lutnick on issues affecting Canadian interests during the election period.

The trade landscape is further complicated by the Trump administration's identification of countries with significant trade imbalances, referred to as the “Dirty 15.” This list includes Canada, which had a goods trade deficit of $63.3 billion in 2024. Energy products, including crude oil and natural gas, account for nearly $170 billion of the U.S. trade deficit with Canada.

As the situation evolves, both nations must navigate the complexities of their economic interdependence while addressing the challenges posed by tariffs and trade negotiations. The outcome of these discussions could have lasting effects on the economies of both Canada and the United States, shaping the future of their bilateral relationship.