Canada’s Carney: More intensive talks with US ahead

Uncertainty persists over a trade agreement with the United States (US), with Canadian Prime Minister Mark Carney saying on Tuesday that key issues remain unresolved despite progress in negotiations. Carney said discussions would intensify, but stressed that the trade talks were not yet complete.

What did Carney say?

Talks with US to become more intensive.

Progress made but US trade talks not yet complete.

Some red lines remain to be addressed.

Key issues remain, but progress achieved.

Some of our limits in US trade talks have been eliminated.

US requests fewer concessions and proposes more, but deal not reached yet.

Trade negotiators don’t always need talks with USTR, communication lines remain open.

Looks forward to meeting Trump at APEC summit in China.

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Tariffs: key questions answered

How do tariffs work?

By giving domestic producers and manufacturers a price advantage over comparable imported goods, tariffs aim to improve their competitiveness in the market. These customs duties apply to specified merchandise imports or product categories. Alongside trade barriers and import quotas, tariffs are widely deployed as protectionist measures.

How do tariffs differ from taxes?

Both tariffs and taxes raise government revenue for public goods and services, but they differ in several respects. Importers pay tariffs in advance at the port of entry, whereas taxes are paid when a purchase is made. Taxes apply to individual taxpayers and businesses; the responsibility for paying tariffs rests with importers.

Do tariffs help or harm an economy?

Economists are divided into two schools of thought on the use of tariffs. One view holds that they are needed to safeguard domestic industries and correct trade imbalances. The opposing view considers them harmful, warning that they could raise prices over the longer term and encourage retaliatory tariffs that lead to a damaging trade war.

What does US President Donald Trump plan to do with tariffs?

Ahead of the November 2024 presidential election, Donald Trump clearly signalled his intention to deploy tariffs in support of the US economy and American producers. Mexico, China and Canada together represented 42% of total US imports in 2024. According to the US Census Bureau, Mexico was the leading exporter during this period, at $466.6 billion. These figures underpin Trump’s intention to target the three countries with tariffs. His plans also include using tariff revenue to reduce personal income taxes.