Premier Danielle Smith says she is disappointed that Canada and the U.S. were unable to reach a new trade agreement before Friday's deadline, and though many Canadians want to go shot-for-shot with the U.S. in a trade war, she cautions against it.
"We're very disappointed," said Smith on Saturday during her
Your Province. Your Premier. radio show.
On Friday, Prime Minister Mark Carney directed Canada's trade negotiators to end discussions with their U.S. counterparts shortly before the midnight deadline at which time the U.S. imposed 50% tariffs on select Canadian goods.
"The bonds between Canadians and Americans are long, and they remain strong," said Carney on Saturday. "A mutually beneficial trade agreement is possible, one that respects our sovereignty, one that builds on our complementary strengths, one that lowers costs for families on both sides of the border, one that creates good jobs for our workers."
"Canada has always worked towards these goals, even while America's attention and dedication to them have wavered; we've consistently proposed long-term partnerships, while America has often pursued short-term transactions. The gap between partnership and competitor, unfortunately, has remained too wide in recent days."
According to Carney, his government's goals during the negotiations included preserving tariff-free access to the U.S., ensuring trade stability, reducing tariffs on key sectors, protecting small and medium-sized businesses, and maintaining Canada's flexibility, independence, and sovereignty.
Carney claims the two sides were nearing an agreement, but last-minute additions by the U.S. that would have punished Canada's auto industry, limited Canada's ability to enter into and uphold other trade agreements, and imposed restrictions on French-language protections made the proposed deal unacceptable.
"Elements coming in, ramping up any of them individually, but collectively, put us in a position where what had been on a trajectory, absent those elements, for a fair deal, a good deal for Canadians, not perfect, but a good deal, a deal we would not accept," Carney said.
Carney said Canada is in a "trade war" with the U.S. and his government intends to match Trump's tariffs dollar-for-dollar that will be implemented starting Sept. 8, and more details will be announced in the coming days.
"We waited until the United States decided to actually implement these so-called 338 tariffs," Carney said. "That's fine. We've got the reserves. We've got the resilience. We've got the plan. We've got the focus. We will respond. We're going to focus on what we can control. We're going to build."
Many politicians across Canada have applauded the approach, but Smith is less willing to praise retaliation.
"I know emotionally it feels good to retaliate," Smith said. "I get that, but let's remember what happens when we retaliate."
If Canada were to match Trump's measures as is, 50% tariffs would be applied to products that impact industries across the country, such as farmers purchasing agricultural equipment, which would mean the cost of food could rise.
“We shouldn't be cheering if our farmers have to pay 50 percent more for all the equipment that they need to produce our food," Smith said. "That's not a success for us."
"It's not something we should be cheering on. It's something we should be lamenting. This is why I don't love tariff wars, because they hurt everybody. They hurt us producers, and they hurt our consumers."
Under the current tariff landscape, Smith said Alberta's economy is fortunate to be relatively sheltered, given that they impact only 3% of Alberta's economy; however, that could change if the energy sector entered the battle.
Energy, especially Alberta's oil and gas industry, is seen as a key bargaining chip in negotiations, as many Canadian leaders have called on Carney to impose export taxes on supplies flowing to the U.S.
Despite the pressure, Carney said he is not looking to use Canada's energy exports as a bargaining chip, and that "we have other options to protect our industry." However, on Saturday, he was keen enough to remind people of the reality of the U.S.’s reliance on Canadian energy.
"The U.S. narrow merchandise trade deficit only exists because the U.S. buys so much of its energy from Canada," said Carney. "Canada fuels American growth, supplying 99% of their natural gas imports, 85% of their electricity imports, 60% of their crude oil imports."
"I don't think they want us to stop sending any of that energy.
Smith is pushing for the two sides to resume negotiations, and though Carney was blunt and forceful when discussing Canada's retaliation on Saturday, Smith said the Sept. 8 implementation gives her a reason to hope that his words will not turn into actions.
"I think that's the prime minister saying, 'Come on, guys, let's see if we can figure this out over the next two weeks,'" Smith said. "And I'm really hopeful that some constructive conversations begin, because, boy, a tariff war is painful."
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