Trudeau holds economic summit in face of U.S. tariff threats

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Prime Minister Justin Trudeau is gathering with business and labour leaders in Toronto Friday for a summit on how Canada can attract more investment, dismantle internal trade barriers and find new international customers as the threat of U.S. protectionism looms over the country.

The get-together comes just days after a last-minute delay in plans by U.S. President Donald Trump to impose steep tariffs on all Canadian imports – a potentially devastating shock that drew fresh attention to Canada’s overreliance on the U.S. market. More than 75 per cent of all this country’s merchandise good exports go to the United States.

On Monday, Mr. Trump delayed tariffs on Canada for 30 days after Ottawa agreed to more measures to fight the illegal production and distribution of fentanyl. But other protectionist threats from the Republican White House include talk of more tariffs on steel, aluminum and copper, as well as measures to address trade imbalances with foreign countries.

The Prime Minister has said the Toronto summit will try to draft what he called a long-term prosperity agenda.

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In a statement earlier this week, Mr. Trudeau said the Canada-U.S. Economic Summit will bring “together partners across business, civil society and organized labour to find ways to galvanize our economy, create more jobs and bigger paycheques, make it easier to build and trade within our borders, and diversify export markets.”

“We want businesses, investors and workers to choose Canada.”

Rising U.S. protectionism is damaging business investment in Canada. One of Mr. Trump’s goals in threatening tariffs on allies, Canadian officials have repeatedly said, is to force investors to relocate manufacturing to the United States – at the expense of America’s trading partners. In addition, Mr. Trump has vowed to cut taxes and regulations, measures that could make the U.S. a more attractive market for businesses.

Candace Laing, the president of the Canadian Chamber of Commerce, which represents more than 200,000 businesses, has warned companies are already relocating from this country to the United States to avoid tariff threats. She said she will be attending the summit.

Ms. Laing said Canada needs bold action – citing the example of the construction of the St. Lawrence Seaway System – and clear direction to offer hope to businesses.

“This is an all-hands-on-deck moment.”

Dismantling barriers to trade between provinces and territories, new incentives for investors and action to cut taxes and regulation are also needed, she said.

“We have a Trump administration today promising massive regulatory and tax changes [and] that leaves us very vulnerable.”

Mr. Trump re-entered the White House determined to alter the balance of U.S. trade. He and key members of his administration have described plans to use new tariffs as a tool to drive manufacturing to U.S. soil. They also see taxes on foreign goods as a way to bolster American public finances. Among their plans is to use a new External Revenue Service to complement and, where possible, supplant the country’s Internal Revenue Service.

The U.S. President has also talked of imposing tariffs on foreign steel, aluminum and copper. And by April 1, U.S. government departments and agencies are supposed to report to the White House on the country’s trade deficits with major trading partners and recommend measures to rebalance.

Mr. Trump has repeatedly complained about the fact that the United States has a trade deficit with Canada, but Canadian officials say this reflects significant petroleum sales to American customers.

Mr. Trump’s threatened tariffs – 10 per cent on Canadian energy and 25 per cent on the rest of Canadian goods – risk erasing economic growth in Canada this year.