LILLEY: Trade deal with Trump administration could be imminent, sources say
Deal before G7 meeting in mid-June possible, according to people on both sides of border
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A deal between Ottawa and Washington before the G7 summit in Kananaskis, Alta., is the latest speculation in the ongoing trade saga.
The speculation was going full tilt as Toronto’s business community came out for a speech to the Empire Club from Ambassador Pete Hoekstra, U.S. President Donald Trump’s new emissary to Canada.
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Yes, the Trump administration said Tuesday that steel and aluminum tariffs would double Wednesday, but as Trump’s ambassador to Canada spoke to a business crowd, some in the audience were talking about a deal.
“It will be before the G7, perhaps as early as next week,” one well-placed source said.
They weren’t alone in suggesting a deal was imminent.
Talks have been ongoing between the Trump administration and the new Mark Carney-led Liberal government since the election. In some ways, they are an extension of the talks that had been going on since Trump took office in January.
“Ottawa knows what they need to do,” said another attendee at Hoekstra’s talk.
Americans in attendance seemed bullish on the talk given by Hoekstra, although less so for the Canadians in attendance.
“I am optimistic about where this relationship is,” Hoekstra said. “I’m more optimistic about where I believe this relationship is going.”
He spoke about the need for those in attendance to remember three things Trump is focused on and that he promised to the American people – prosperity, security and safety.
“That is the agenda, the transformative agenda that Donald Trump is pushing – prosperity, security and safety. That is good for America and that is good for our neighbours to the north,” Hoekstra said.
“The more prosperous we are, the more safe we are, the more secure we are, you will also feel the same.”
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Hoekstra’s speech and subsequent fireside chat with former Conservative cabinet minister Lisa Raitt were light on details. Speaking with many attendees who arrived looking for something to give them hope, they were left wanting.
“That was not reassuring,” said a Conservative partisan after the event.
“It was gaslighting,” a Liberal partisan said of Hoekstra’s address and Q & A with Raitt.
Those comments were replicated again and again by those who had hoped for more. Hoekstra may have been keeping his comments tight after saying the 51st state talk was over, only to have Trump bring the issue back to the forefront last week with a social media post. He may also have been circumspect because he knows a deal between Ottawa and Washington may be close.
Is it crazy to think a deal could happen while Trump is doubling tariffs? Speaking to sources in various governments, the answer appears to be no — it is perhaps hopeful, but not crazy.
“There is a hopeful scenario in which there could be a deal, but the next 48 to 72 hours will be crucial,” a top source in Ottawa said.
Meanwhile, provincial sources confirmed a potential deal could be imminent if the stars align.
“The target from the Carney team is to have a deal before the G7,” said a source.
The G7 leaders will meet in Kananaskis from June 15-17, so officials are hoping for a deal before then and scoring one would be a major coup for the Carney government. It won’t be a full renegotiation of the Canada-U.S.-Mexico Agreement, but will outline broad strokes of a new trade deal.
Highly contentious issues like dairy and supply management would be put off until a later date and a more in-depth trade negotiation. One thing that needs to be dealt with is the digital services tax, a Justin Trudeau government idea to tax big tech companies that has angered Republicans and Democrats in Washington.
“If bills go out in June, it will be a problem,” a source said, noting the first bills for that tax are expected this month.
The Carney government introduced the “Strong Borders Act” on Tuesday, an attempt to deal with auto thefts, drug smuggling and people smuggling and perhaps an attempt to tell the Americans we are taking border issues seriously. We can also expect a defence announcement soon with the same purpose.
“We should expect significant investments in national defence and aligned (with), but not necessarily part of, Golden Dome,” the source said, referencing Trump’s missile defence system.
Bottom line: Expect elbows to go down, shirt sleeves to be rolled up and a deal to be announced with the Americans within the next two weeks.
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