Canada, U.S. discussing potential tariff exemptions after White House prompts trade chaos

Prime Minister Justin Trudeau and his U.S. counterpart engaged in a tense phone call on Wednesday to discuss the ongoing trade war between their two countries. The situation was described as fluid, unpredictable, and chaotic by Canadian officials, as both sides attempted to negotiate a deal to potentially lift all tariffs or negotiate carve-outs for certain sectors.

After President Donald Trump unilaterally granted an exemption to Canadian-made cars earlier in the day, there was speculation that further tariff exemptions could be announced, but no firm guarantees were made. The president’s advisers have been sending mixed messages, at times suggesting a compromise on tariffs, only to backtrack and say tariffs will still apply, albeit possibly at a lower rate.

Foreign Affairs Minister Mélanie Joly emphasized that negotiations were ongoing, but ultimately, only Trudeau and Trump could come to a deal. Canada is working to persuade Trump to back down from his plan to impose tariffs on Canadian goods, a move that has rattled markets and consumer confidence on both sides of the border.

During the heated 50-minute call, the U.S. proposed dropping some tariffs if Canada pulled its retaliation measures, which include tariffs on American goods. Trudeau, however, rejected the offer and insisted that Canada would only drop its retaliation if the U.S. dropped all of its tariffs.

Finance Minister Dominic LeBlanc and U.S. Commerce Secretary Howard Lutnick have been in constant communication, trying to hammer out the details of a potential deal to lift some tariffs. LeBlanc stated that Canada’s retaliatory tariffs could be lifted if the U.S. showed goodwill in negotiations.

Canada is also attempting to garner support from allies in Washington and the broader American public to pressure Trump to back down from his trade actions. Joly highlighted the unjustifiability of the tariffs and dismissed Trump’s claims linking them to a fentanyl crisis fueled by Canada.

In response to Trump’s decision to grant a one-month exemption on auto tariffs, Ontario Premier Doug Ford criticized the president, stating that he was the root cause of the problem. Trump’s administration, however, indicated that they were not interested in further exemptions and wanted tariffs to apply broadly.

Despite the contentious nature of the call and the ongoing trade war, Trump described the conversation as ending in a somewhat friendly manner. However, he expressed confusion over Trudeau’s inability to provide a date for the next federal election, suggesting that it may be a power play on the prime minister’s part.

As negotiations continue, the future of trade relations between Canada and the U.S. remains uncertain, with both sides navigating a complex and challenging landscape of tariffs and countermeasures.