WASHINGTON (AP) — President Donald Trump said Tuesday that he was open to extending the free trade agreement with Mexico and Canada through a renegotiation or seeking “different deals” as he met with Canadian Prime Minister Mark Carney at the White House.
Carney made his second visit to the Oval Office ahead of next year’s review of the United States-Mexico-Canada Agreement and as one of the world’s most durable and amicable alliances has been fractured
by Trump’s trade war and annexation threats.
The free trade agreement was enacted during Trump’s first term, and it allows the majority of Canadian and Mexican goods to be shipped to the U.S. without tariffs. But Trump has made it clear since returning to office that he wants to reshape the relationship, and he expressed ambivalence over the process as long as he feels like he’s able to improve America’s position.
“We could renegotiate it, and that would be good, or we can just do different deals,” he said. “We’re allowed to do different deals if we want. We might make deals that are better for the individual countries."
The remarks suggested that Trump is willing to let uncertainty over the agreement’s future linger.
Carney entered the visit hoping to find some relief on sector-specific tariffs. There is fear in Canada over what will happen to the U.S.-Mexico-Canada Agreement, which is critical to Canada’s economy. More than three-quarters of Canada’s exports go to the U.S.
Trump showed a fondness for Carney — something he didn't display toward Carney's predecessor, Justin Trudeau — but noted there was a “natural conflict” between the two countries, a point to which the prime minister politely disagreed.
“We want Canada to do great,” Trump said. “But you know, there’s a point at which we also want the same business.”
Asked why the U.S. and Canada have failed to reach a deal on trade, Trump said it’s a complicated situation.
“We have natural conflict,” he said. “We also have mutual love.”
Carney balked at Trump's use of the word “conflict.”
“There are areas where we compete, and it’s in those areas where we have to come to an agreement that works. But there are more areas where we are stronger together, and that’s what we’re focused on.”
Trump’s talk of making Canada the 51st state and his tariffs have Canadians feeling an undeniable sense of betrayal. The U.S. president made a joking reference to a “merger” between the two countries at the top of his remarks Tuesday.
Relations with Canada’s southern neighbor and longtime ally are at a low point.
“We've had ups and downs, but this is the lowest point in relations that I can recall,” said Frank McKenna, a former Canadian ambassador to the United States and current deputy chairman of TD Bank.
“I talk every day to ordinary citizens who are changing their vacation plans, and I talk to large business owners who are moving reward trips away or executive business trips,” McKenna said. “There is an outright rebellion.”
Carney has said the USMCA is an advantage for Canada at a time when it is clear that the U.S. is charging for access to its market. Carney has said the commitment of the U.S. to the core of USMCA means that more than 85% of Canada-U.S. trade continues to be free of tariffs. He said the U.S. average tariff rate on Canadian goods is 5.6% and remains the lowest among all its trading partners.
But Trump has some sector-specific tariffs on Canada, known as Section 232 tariffs, that are having an impact. There are 50% tariffs on steel and aluminum imports, for example.
“Improving relations with the White House ahead of the USMCA review is certainly an objective of the trip, but opposition parties and part of the Canadian public will criticize Prime Minister Carney if he doesn’t achieve some progress on the tariff front at this stage,” said Daniel Béland, a political science professor at McGill University in Montreal.
Asked by a reporter about the prospect of Canada getting some relief in steel and aluminum tariffs, Trump said it would be something they would discuss.
The ties between the two countries are without parallel. About $2.5 billion (nearly $3.6 billion Canadian) worth of goods and services cross the border each day. Canada is the top export destination for 36 U.S. states. There is close cooperation on defense, border security and law enforcement, and a vast overlap in culture, traditions and pastimes.
About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports are from Canada.
Canada is also the largest foreign supplier of steel, aluminum and uranium to the U.S. and has 34 critical minerals and metals that the Pentagon is eager for and investing in for national security.
“The bigger prize would be getting a mutual agreement to negotiate as quickly as possible the free trade relationship,” McKenna said. “If the United States were to threaten us with the six months' notice of termination, I think it would represent a deep chill all across North America."
___
Associated Press writer Chris Megerian in Washington contributed to this report.
