President Donald Trump directed the federal government to begin removing Canadian products from major procurement contracts Tuesday as Ottawa imposed retaliatory tariffs on about $20 billion in U.S. goods and Prime Minister Mark Carney accelerated efforts to reduce Canada’s economic dependence on the United States.
By yourNEWS Media Newsroom.
President Donald Trump escalated the U.S.-Canada trade dispute Tuesday by directing the General Services Administration to begin excluding Canadian-made products from major federal purchasing contracts unless Ottawa grants what he called “full and fair reciprocity” to American businesses.
Trump ordered the GSA to work with the U.S. Trade Representative to remove Canadian-origin products from the agency’s Multiple Award Schedules, the long-term contracts through which federal agencies purchase a broad range of goods and services. The president accused Canadian governments of restricting American businesses from their public procurement markets.
The action came the same day Canada’s retaliatory tariffs on hundreds of American products took effect, widening a trade confrontation that has increasingly strained one of the world’s most economically integrated bilateral relationships.
Canada’s new tariffs apply at rates of 15%, 25% or 50% to approximately $20 billion worth of U.S. imports, including steel, aluminum, cheese, appliances, clothing, cosmetics and agricultural equipment. That represents about 6% of the $333.6 billion in goods the United States exported to Canada last year.
Prime Minister Mark Carney defended the retaliation while presenting the dispute as a catalyst for a broader restructuring of Canada’s economy.
“It’s about ensuring that no country can hold us hostage. And that we can live how we want to live,” Carney said Tuesday.
More than 70% of Canadian exports still go to the United States, leaving Canada heavily exposed to changes in American trade policy. Carney said his government now intends to accelerate investment, infrastructure construction and the development of trading relationships elsewhere.
“It was easy business, but it meant we relied too much on one economic partner,” Carney said. “That time is over.”
Carney acknowledged that diversification would carry near-term costs but argued that remaining heavily dependent on the U.S. market would present a greater long-term risk. Canada’s exports to countries other than the United States are already increasing and are on pace to double over the coming decade, according to the prime minister.
Ottawa is also examining a substantially deeper relationship with the European Union.
A Canadian official familiar with the discussions said possible arrangements could include expanding existing agreements, negotiating a new treaty or creating another form of cooperation that would stop short of full EU membership. Canada has begun consulting provincial and territorial governments and labor organizations, although officials have not settled on a specific model.
Carney is scheduled to travel to Strasbourg, France, next week. He is expected to attend European Commission President Ursula von der Leyen’s State of the European Union address Sept. 16 and speak to the European Parliament the following day.
The latest confrontation follows the collapse of U.S.-Canada trade negotiations on Aug. 21. Since then, Washington has imposed additional tariffs and Trump has threatened further restrictions involving Canadian companies and products.
The dispute is unfolding despite the two countries’ extensive economic, defense and security ties and the U.S.-Mexico-Canada Agreement negotiated during Trump’s first term. The recent measures have put new strain on the framework governing North American trade.
Carney said Canada could not continue allowing U.S. products to enter without comparable duties while Canadian exporters faced American tariffs.
He insisted Ottawa was not attempting to escalate the conflict for its own sake but said retaliatory measures were necessary to protect Canadian businesses and workers.
“The most fundamental issue is that the cumulative U.S. demands revealed that they wanted us to become even more reliant on them, not less,” Carney said. “In too many areas, they wanted dependency, not a true economic partnership.”
According to Carney, proposals raised during the unsuccessful negotiations included restrictions affecting Canadian French-language and cultural protections, greater U.S. influence over future Canadian trade agreements and conditions he said would weaken Canada’s automobile, steel and forestry industries.
A Canadian government official said Ottawa had already decided its broader strategy would not change regardless of how strongly Washington responded, even if Trump delivered what the official described as a “nuclear response.”
The government intends to continue emphasizing domestic production and diversified international trade, the official said.
Trump’s federal procurement directive adds another front to the dispute.
The GSA’s Multiple Award Schedules provide federal agencies with long-term contracts for commercial products and services. Products offered under those schedules generally must comply with federal trade-agreement requirements.
Trump said Canadian products should be removed unless Ottawa restores reciprocal access for American companies.
“The Canadian Government, including Canadian Provinces, have banned American Small Businesses and Companies from selling into their Government Procurement Markets,” Trump said in announcing the directive.
The trade fight has also spilled into other industries. Trump recently threatened Canadian aircraft manufacturer Bombardier with restrictions on access to the U.S. market unless it expands manufacturing in the United States, drawing concern from lawmakers in Kansas, where the company maintains a significant workforce.
Inside Canada, the confrontation has also produced a broader public backlash against the United States. Canadian travel to the U.S. has fallen, while some consumers have participated in boycotts of American products.
Carney has characterized those responses as demonstrations of national resolve.
British Columbia Premier David Eby said his province would install signs at U.S. border crossings declaring: “Welcome to British Columbia, Canada. Strong, proud and will NEVER be the 51st state. Sorry!”
“While our kindness is one of our greatest strengths, you should never, ever mistake that kindness for weakness,” Eby said.
The reference follows Trump’s repeated suggestions that Canada could become the 51st U.S. state, remarks that have been rejected by Canadian political leaders.
Despite the worsening public dispute, communication between the two governments has not ended.
Gabriel Brunet, spokesman for Canada-U.S. Trade Minister Dominic LeBlanc, said officials remain in contact even though formal trade negotiations have not resumed.
Former U.S. trade official Wendy Cutler said neither government currently has much incentive to appear eager to return to the negotiating table.
“Clearly, at this point each side does not want to look too anxious to reengage in fear of looking weak,” she said.
Carney’s public approval rating has risen during the confrontation, strengthening his political position as his government pursues a strategy based on greater economic independence from Washington.
For both countries, the stakes extend beyond the tariffs imposed Tuesday. Their economies have been deeply integrated for decades through cross-border manufacturing, energy, agriculture and investment, making a prolonged rupture potentially costly on both sides.
For Canada, the confrontation is increasingly becoming a test of whether it can redirect enough trade and investment toward Europe and other markets to reduce its reliance on the United States. For Washington, Trump’s procurement directive adds the purchasing power of the federal government to tariffs and other measures being used to press Canada for greater market access.
Neither side has indicated that formal negotiations are about to resume, leaving Tuesday’s reciprocal measures as the latest escalation in a trade relationship that both governments are now actively reshaping.
Original article
Comments