US announces new tariffs on Canada, dozens of other countries over forced labour concerns

Just hours after Canada, U .S.Trade Minister Dominic LeBlanc met with his U .S.counterpart in Washington, the Americans announced a new set of sweeping tariffs that are set to impact Canada, one of 60 countries the state is going after again.Our Mackenzie Gray joins us now from Ottawa to break down last night's announcement.

So Mack, take us through the new U .S.tariff proposal and what it would apply to here in Canada.

It was about five or six hours after the meeting that Dominic LeBlanc had with U .S.Trade Representative Jameson Greer.That's the guy who's in charge of the Kuzma renegotiations and all of really Donald Trump's trade policy.Of course, Trump makes a lot of the final decisions on these things, but Greer acts a lot of these things out.This had been an investigation that had been going on for a while into countries and what they do to make sure that forced labor products are not bought or sold into their countries.

There were different kind of classifications, Canada was in a group that said that they had provisions to deal with forced labor, but were not effectively implementing them.Of course, that is related to the current USMCA, as Donald Trump likes to call it, the Canada -US -Mexico Free Trade Agreement, where there are provisions about forced labor.Because of that, the US trade representative is proposing that there be a 10 % tariff on Canada.But there are some key exceptions when you read into things a little bit deeper.First, it does not apply to KUSMA goods.That's about 85 % of the goods that Canada sells to the US.

So already, that's a big swath of goods that could potentially be affected.It also does not apply to tariffs that are under the 232 section.For those who are not reading the trade documents like we are here, that's mainly the tariffs associated with steel and aluminum and other metals.Those go up to 50 % on some things.So an additional 10 % on that would have been very punitive on top of an already difficult situation when you talk to the steel, aluminum, and other metals manufacturers.So what does it apply to?

It's tough to say.because it is a proposal at this point in time.These things can always change.But in a basic reading of it it looks like a big deal.could apply to things like softwood lumber that already has a number of countervailing duties and additional tariffs on it that are in the 50 percent ballpark.So that could move up to potentially 60 percent on softwood lumber.

There's a number of other things like furniture cars that are wholly made in Canada or or predominantly made in Canada are impacted as well too.That is a lot of heavy machinery right now that has a 25 percent tariffs on it.And of course there are goods that are not compliant under KUSMA.That has a 10 percent global tariff on it right now.This seemingly would have another 10 percent on top of it to get to 20 percent.We'll have to see how these things play out.

This investigation, though, was largely viewed as a way for Donald Trump to get around the Supreme Court ruling that struck down a bunch of his tariffs before.There are different sections in the U .S.laws that allow different kinds of investigations to be done.There are other investigations going forward.So we'll have to see if those impact Canada and if these tariffs actually come into place.

You know, you go back to the winter time when that Doug Ford Ontario ad was playing during the World Series.Donald Trump at that time threatened an additional 10 % tariff on Canada that never actually came to fruition.So this is just a proposal at this point in time.We won't know until kind of mid -July whether or not the Americans actually do go forward and implement it.

All right.Now, Mac, the trade talks between LeBlanc and his US counterpart went on for about two hours yesterday.What was the mood after those talks finished?

Dominic LeBlanc talked about how he was eternally optimistic.I think that would be a bit of spin from the candidate US Trade Minister.What he did give concrete information on, and it wasn't very much in his press conference, he was dodging a lot of the questions by our colleagues who were asking, was that Canada did bring proposals to the table to deal with some of the longstanding issues that the Americans have.He was very coy and not wanting to say what those issues were, but we've been hearing about them from folks like US Ambassador to Canada Pete Hoekstra and from Trump for a long period of time.Supply management is a big concern.There's issues around that.

the provinces taking alcohol outside of provincial liquor stores, off the shelves from there.Things like the Online News Act and other things that impact U .S.tech companies are concerns that the Americans have.They have outlined what a bunch of those issues are for a long period of time.

All right, Mac, the Kuzma deadline is looming.The conservatives have been critical of the Karni government for not having started formal talks with the Americans just yet, while the Mexicans have already hosted a round of talks.Prime Minister Mark Karni, what's his response to all this?

Yeah, let's start with that deadline.That's on July 1st.We should point out that Jameson Greer, the USTR, the Mexicans and the Canadians, including the Prime Minister, have all said, you know, we're not going to meet that July 1st deadline.So there doesn't seem to be that level of urgency.deadlines that Donald Trump has used as a tactic before in trade negotiations to try and force the hands of other people to get things done.The line we heard from the prime minister was saying, look, if you look at the complaints that the Americans have about Canada and the complaints that the Americans have about Mexico, in numbers that the prime minister cited yesterday that we don't have visibility on, was that the Americans have 30 issues with Canada and 60 issues with Mexico.

So there's a lot more to deal with the Mexicans than there is with us.And you know, you can only talk to one group at a time is basically how the Americans are trying to pin these negotiations so they're not that concerned about it.We should say that Jameson Greer has said before that, look, we do have more issues with the Mexicans than we do with the Canadians.Labor standards are pretty similar between the US and Canada.The rule of law is pretty similar between Canada and the US.And generally, the economies are much more similar relative to the Mexican economy.

In terms of how well those talks are going with the Mexicans, we should point out that one of the big sticking points between Mexico and the US right now is the potential extradition of the governor of the Sinaloa state.cartels there.The American government is alleging that the governor is involved in the cartels.That has led Presidentin the Canada and the US, Dominic LeBlanc would not commit to those.And these deadlines for that July 1st thing are going to be passed.

So things could lead to crunch time a lot sooner than expected once that July 1st deadline gets passed.But it's clear that there's a lot more work to get done.And there certainly isn't a lot of visibility from the Canadian government on what their proposals are and what things that they are willing to give up in these negotiations with the Americans.

Thank you for the breakdown, Mac.