Canada’s tariff and trade position clarified. Part 2.

In our last look at a trade deal between the U.S. and Canada, we noted the following:

A core element of any deal for Canada is that Canada be given a competitive advantage vis-à-vis its seaborne competitors into the U.S. Canada can and will argue its long-term track record of reliable, nearby supply earns it that advantage. It all comes down to how much. They should ask for the 10% rate that crude oil and potash have. Aluminum is just as important. If I had to handicap things today, I would say achieving a 25% tariff rate would be considered a win. One thing that seems totally off the table as a negotiating point is any form of quota. Canada sees quotas as managed trade flow and simply won’t accept it. Argentina and Australia agreed to such quotas under the original Section 232 in exchange for exemption. It has gotten them no goodwill under the current regime, and Canada sees zero point in opening that can of worms.