Will tariffs be abolished? A major turning point in the intense trade war between the US and Canada
A major turning point has been reached in the intense trade confrontation that has been ongoing for several months between the two largest economic partners on the North American continent — the US and Canada. US President Donald Trump officially announced that Washington and Ottawa are "very close" to signing a new comprehensive trade agreement.
According to the Associated Press (AP), the White House leader, having arrived at a rally in Iowa, stated that there has been significant progress in bilateral negotiations and that a concept for a mutually beneficial agreement has been developed.
Trump's statement: Interests of farmers and the Keystone XL project
Donald Trump emphasized that the US has been losing billions of dollars in trade relations with Canada for many years, stating that the upcoming agreement will fundamentally change this situation:
Benefits for American farmers: The agreement envisions that US agricultural producers will be completely exempted from the tariffs they are currently paying for Canadian products;
Restoration of the Keystone XL pipeline: One of the key points of the negotiations includes the resumption of construction on the controversial Keystone XL cross-border oil pipeline, which transports Canadian oil to the US;
Mutual benefit: According to the President, the document being prepared will be absolutely beneficial for American farmers, the US economy, and simultaneously for Canada as well. Currently, the parties are discussing the final technical details.
Constructive signal from Mark Carney: Negotiations to continue in the coming weeks
Canadian Prime Minister Mark Carney also assessed his phone conversation with Trump as "constructive and productive":
Canadian sovereignty and family costs: Carney noted that the future agreement will be aimed at creating new jobs in both countries, reducing costs for families, and protecting Canada's national interests, culture, and sovereignty;
Diplomatic process: Working groups and negotiators from both countries will work actively over the coming weeks to prepare the final contract.
How did the $20 billion trade war begin?
The trade confrontation between the US and Canada took a sharp turn during the summer months:
Washington's July strike: In response to Canada's restrictions on quotas for automobiles, alcohol, and dairy products, Trump imposed a 50 percent tariff on nearly $20 billion worth of Canadian products, which came into effect on August 22;
Ottawa's September 8 response: In response, Canada imposed tariffs of up to 50 percent on $20 billion worth of US steel, aluminum, dairy, agricultural machinery, and consumer electronics products.
If the new agreement between Trump and Carney is officially signed, the $40 billion reciprocal tariff war in North America will be brought to an end, and transit and energy projects will be revived.
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