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Supreme Court decision met with restrained relief in Canada
Canadian officials reacted with cautious optimism after the US Supreme Court invalidated former President Donald Trump's global tariffs, including those targeting Canada under the pretext of curbing fentanyl trafficking.
Limited immediate economic impact
The ruling's direct effect on Canadian trade appears minimal. Approximately 85% of goods subject to the so-called "fentanyl tariffs" had already been exempt under the US-Mexico-Canada Agreement (USMCA). However, Ottawa continues to grapple with lingering US duties on steel, aluminum, and automobiles, which Trump has vowed to maintain.
US-Canada Trade Minister Dominic LeBlanc acknowledged the court's decision as a validation of Canada's stance that the tariffs were "unjustified." Yet, he emphasized the pressing challenges ahead, particularly the upcoming review of the USMCA, which governs a market of over 500 million people.
USMCA review looms as key hurdle
The three nations must decide this summer whether to extend the trade pact, originally negotiated during Trump's first term. While Canada and Mexico have reaffirmed their commitment to a trilateral agreement, the Trump administration has signaled a preference for separate bilateral deals.
LeBlanc confirmed plans to meet with US Trade Representative Jamieson Greer in the coming weeks to kickstart formal discussions, which are expected to intensify ahead of a 1 July deadline. The talks mark the first high-level engagement since negotiations stalled last October, following Trump's outrage over an Ontario-sponsored advertisement criticizing US tariffs, which aired during the World Series.
Trade tensions persist
Greer, in a recent interview with Fox Business, described negotiations with Canada as "more challenging" than those with Mexico. He cited several unresolved issues, including Canada's restrictions on US wine and spirits, dairy import rules, and the Online Streaming Act, which mandates foreign companies like Netflix and Spotify to fund Canadian content.
"They continue to have certain barriers. They refuse to sell US wine and spirits on their shelves. There are a variety of issues that they have not addressed, and this makes it a big challenge."
Jamieson Greer, US Trade Representative
Canada seeks to diversify trade amid uncertainty
With the US accounting for roughly 75% of Canadian exports, Ottawa has prioritized expanding trade with other nations, aiming to double non-US exports by 2035. Business groups, however, remain wary of prolonged instability.
"Predictable, rules-based trade is essential for manufacturers on both sides of the border."
Dennis Darby, CEO of Canadian Manufacturers & Exporters
Darby stressed that a successful USMCA renewal is critical to ending "recurring trade disruptions."
New tariffs set to take effect
The White House confirmed that a 10% global tariff, replacing the struck-down duties, will go into effect on Tuesday. The USMCA exemption for Canada and Mexico will remain in place under the new measure, though its long-term implications remain unclear.
