How will Trump's tariff stance impact North America's future free trade deal negotiations?

Rollercoaster, seesaw, even whiplash, just three of the ways to describe Canada's experience this week at the hands of Donald Trump. Here's what people in Calgary are saying. I think Donald Trump's going to do what Donald Trump's going to do. It's all about him. It's a sad, sad state of affairs. It's going to be tough for a lot of people. I mean, it's tough already with the prices going up and stuff. We're looking made from Canada. Like this one is made from Canada. It's the hugest change I've ever known about. And I'm just hoping that it will not impact us too negatively. It's not going to be an easy couple of years. You know, we're going to see inflation and we're going to see the cost of things rising and rising. We have to come together to help each other. To some of the reaction we're seeing to the U.S. presidents on again, off again, tariffs, are they going to do it? Are they not going to do it? And the amount of uncertainty it has sparked in this country, including about the free trade agreement that's in effect across North America. So, for more on this, we're joined now by international trade lawyer, John Boscaril. He's the head of McCarthy Tetra International Trade and Investment Law Group. John, thank you so much for making time for us today. It's great to be here with you, Natasha. So, John, I need a legal 101 course on this trade agreement because the prime minister came out a few days ago and said that the issue of border security and fentanyl is being used as the legal rationale to impose these tariffs. But if we have CUSMA or the USMCA agreement in place, how is the president able to do this? Explain that argument to us. You're absolutely right. We have these trade agreements in place, CUSMA plus the agreements of the World Trade Organization, which make it illegal to just slap tariffs on the products of your trading partners anytime you feel like it. So, on their face, these tariffs violate those trade agreements. Now, the trade agreements contain an exception, and they contain many exceptions, but one of the ones which probably the Trump administration could be trying to make relevant here is an exception for protecting your essential security interests. And so it's necessary for Trump, not just for the trade agreements, actually, but for US legislation as well, for him to declare or to claim some kind of national emergency in order to justify this. But what is the threshold? Who's monitoring this? So, if there's a legitimate concern about fentanyl and illegal migration into the United States, you've heard it, we've all heard it, so little of it comes from Canada into the US, and we could easily argue that the greater threat comes from the United States into Canada, be it guns, be it migrants coming to seek refuge from the United States. Yeah, agreed. There is no basis here for him to apply these tariffs. If this was going to go before a dispute settlement body under the trade agreements, they would determine that this violates the trade agreements. The more important issue here, though, is really Trump upending decades of what we thought trade agreements meant, decades of us relying on kind of an international rule of law where countries would generally follow what they promised to do under trade agreements. What he's doing now violates those trade agreements and cannot be justified under some kind of national security interest. And so, to that point, we also heard from the Prime Minister during those same comments that Canada is going to retaliate, they're going to go to the World Trade Center and bring this up as an issue, as a violation of an international agreement that Trump himself was a signatory to. Do they have a strong case? They have a very strong case. The problem is, and they launched that challenge to the World Trade Organization just a few days ago. The problem is, those challenges take very long to resolve. Sometimes not just months. They can take years. In the meantime, the Trump administration is going to hold this tariff threat over our heads. It's going to implement tariffs. It's going to take them off. It's going to make it difficult to figure out what they're going to do next. They will continue to do that regardless of what's happening at the World Trade Organization or any other dispute panel that's established under a trade agreement. So then, from a legal perspective, if we want immediate results, what does Canada do? Is there an option for us? I think the retaliation option is probably the best option Canada has right now. So, the Trump administration is ignoring its legal obligations under trade agreements. We have no choice but to engage in some form of retaliation, and part of that is demonstrating to the U.S., in particular, those states where there are senators and governors and House of Representative members who support Trump, demonstrating to them the importance of the Canadian relationship here and the fact that we are their most important customer for many products and for them to impose tariffs on that is going to create pain. Now, Canada has been a quiet friend, but probably the closest friend and ally of the United States for many decades. And, to an extent, I think we've been taken for granted. And so, it does make sense for us to try to impose some form of retaliation, make some noise about it, so that they do understand just how important the economic relationship is. From your point of view and the conversations you're having with your colleagues, is CUSMA basically done? Are we ripping it up? Is that the stage that we're at? You know, CUSMA is set to expire in 2036. Renegotiations were to start next year, and the government of Canada was preparing for that prior to the Trump administration beginning its term. But we're now at a position where the CUSMA is being renegotiated in real time. Trump is taking steps right now which indicate that he really doesn't care what the CUSMA says or what his trade agreement obligations are. And although we'll want to focus and bring back the Trump administration to this idea of renegotiating CUSMA in a way that's going to be acceptable to both countries, as well as Mexico, the fact is he has upended things so much that, and I hate to say this as an international trade lawyer, but the trade agreements don't really seem to matter much right now. Now we have to get into the hard steps of retaliation and demonstrating to our friends in the United States that this is going to be damaging for them. Well, certainly we've been making that message clear. Our representatives have been. It doesn't seem to have an impact on the president. But, John Bosco, really great to speak to you. Thank you so much for your time. It was a pleasure, Natasha. Take care.