LILLEY: Tariff-free deal with Trump may come at a steep price

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Can we get a deal between Canada and the U.S. that doesn’t have tariffs? Like many things involving the Trump administration, it’s up in the air, but if we can get one, the price may be steep.

Last week, Prime Minister Mark Carney made it sound like this wasn’t possible when asked by a reporter.

“There’s not much evidence at the moment — from the deals, agreements and negotiations with the Americans for any country or any jurisdiction — to get a deal without tariffs,” the PM said.

To me, this sounded like reality and has been sounding like where we would land since the premiers visited Washington back in February. On that visit, person after person kept talking about the growing support for a global, baseline tariff of around 10% — something that would apply to the whole world.

The trade deals Trump has struck with other countries have included tariffs in that range, and Trump kept expressing his support for across-the-board tariffs for anything entering the U.S. market.

“I’m a tariff person. I’ve always been a tariff person. It’s simple, it’s easy, it’s precise,” Trump said, standing next to Carney at the G7 in Kananaskis last month.

Seemed like Carney was just admitting reality and preparing the Canadian public to accept a deal with the Americans that now included tariffs.

Well, then along came Howard Lutnick, appearing on CBS’s Face the Nation this past Sunday morning. Trump’s commerce secretary was being asked about countries like Canada facing tariffs as part of a new trade deal during an interview which even referenced Carney’s comments.

Lutnick said that most goods from Canada already enter tariff free thanks the CUSMA/USMCA but that the president has applied border tariffs over fentanyl and other other issues. Pressed further on tariffs as part of a new deal, Lutnick said smaller economies would face baseline tariffs, not necessarily countries like Canada.

“The bigger economies will either open themselves up or they’ll pay a fair tariff to America for not opening themselves up and treating America unfairly,” Lutnick said.

“If you’re willing to open yourself up, and really open your economy to American business to ranchers, fishermen, farmers, and businesses, then of course we’ll make a better deal with you. But if you’re going to keep your tariffs and your tariff barriers holding us down, then, of course, it seems fair that you should pay a tariff to do business with the greatest customer on Earth — the American consumer.”

That leads to the question of how open is open and what price are we willing to pay?

We have a lot of protectionist measures in place, including non-tariff barriers that protect Canadian airlines, banks, telecom companies, media outlets and more. There is, of course, supply management for the dairy, egg and chicken sectors, as well.

While some of these measures are antiquated, there is a lot of support for Canadian protectionist measures in the Canadian psyche, especially among the Laurentian elite, among CBC listeners, and NDP-Liberal voters. They may demand open access to the American market for our goods, but they don’t want to offer the same in return.

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The Americans have their own areas that they protect, or that they subsidize directly — no side is clean here. But as we look at that Aug. 1 deadline, it’s worth asking the government what exactly it is the Americans want us to open up.

In the past, the Americans have asked for more access for milk and cheese products without demanding supply management be dismantled. Has that changed?

Does Trump want Bank of America or JP Morgan Chase occupying the towers on Bay St. or American Airlines flying the friendly skies north of the border?

It would be good to know, and to debate the issue, and to know the price before we agree to buy.