Canada: Former negotiator urges calm on tariffs

Canada’s chief negotiator of the North American Free Trade Agreement has a message for those concerned about Donald Trump’s latest salvo.

“Don’t panic,” says John Weekes.

The president-elect of the United States recently announced on his Truth Social media platform that he will slap a 25 per cent import tariff on all products from Canada and Mexico on Jan. 20, 2025, unless those countries curb the flow of drugs and illegal migrants across their borders.

But Weekes, who was one of the architects of what was the world’s largest free trade agreement in its day, is not taking Trump at his word.

“I’d be very surprised if he were to put on 25 per cent tariffs,” he said.

“There’s even a question of what would allow him to do that.”

Weekes doesn’t know of any U.S. legislation that would permit such sweeping tariffs, and he doubts U.S. Congress would approve blanket tariffs that blatantly violate the current U.S.-Mexico-Canada Agreement (USMCA).

He doubts Trump himself would be willing to crumple up the deal and throw it in the trash.

“This was an agreement that Trump negotiated, that he called the best agreement ever negotiated, and I would be very surprised if he walked away from it,” said Weekes.

Trump’s team considers USMCA a template for dealing with other trade partners.

“That gives you hope that they’ll respect this agreement,” he said.

So does the fact that implementing the tariffs would do a lot of damage to the American economy and would likely provoke retaliatory tariffs against select U.S. products.

Investors appear to agree with Weekes.

The Dow Jones Industrial Average closed at a record high the day after Trump’s tariff pledge, indicating investors are not putting much faith in Trump’s words, either.

So why would Trump threaten tariffs if he doesn’t intend to apply them?

Weekes believes the key to that riddle lies in Trump’s social media post.

“He linked it with migration and drugs crossing the border,” he said.

“Interestingly, he didn’t say anything about deficits or unfair trade practices.”

Weekes said it is dangerous to try and interpret anything Trump says, but he believes the president-elect is using the threat of tariffs to get Mexico and Canada to secure their borders.

“He has an unusual way of initiating a discussion,” he said.

Two days after his tariff threat, Trump posted on Truth Social that he had spoken with Mexican president Claudia Sheinbaum, who he claims agreed to stop illegal migration through her country.

Sheinbaum later clarified that she had merely reiterated Mexico’s stance “not to close borders but to build bridges between governments and people.”

Weekes said Trump was often erratic and unpredictable during his first term as president, so nothing is out of the realm of possibility when it comes to the proposed tariffs.

That is why he is glad Canada has pushed for robust dispute settlement mechanisms in NAFTA and USMCA.

He believes a dispute panel would quickly determine Trump’s actions are illegal if he proceeds with the tariffs.

That would open the door for Canada and Mexico to legally retaliate against the U.S. Weekes believes Canada would not respond with blanket tariffs because that would not be in the best economic interests of the country.

Canada would instead target politically influential sectors of the U.S. economy that have the ear of Trump and his administration.

However, a lot of bad things would have to happen to arrive at that undesirable scenario of a tit for tat trade war.

In the meantime, Weekes is preaching that Canada’s agriculture and other sectors remain calm.

“We shouldn’t look like we’re desperate because the moment we do that, the way Trump operates, he’ll have us on the run,” he said.

Tags: Canada, agreement, North American Free Trade Agreement, Trump, negotiator, United States