Kelly Ann Shaw: This is about getting Canada back to the negotiating table

Summary

Kelly Ann Shaw explains the Trump administration's tariffs on Canada are designed to bring Canada back to USMCA renegotiation talks, with a deal with Mexico likely first and a revised agreement by year-end. The tariffs target a narrow 5% of Canadian imports, including alcohol, dairy, and auto-related goods, with a 30-day off-ramp before escalation.

• U.S. tariffs on Canada cover about 5% of Canadian imports, focusing on non-sensitive goods like alcohol, dairy, and automotive products.
• The administration used Section 338 authority, allowing comparative discrimination, to impose a 50% tariff on those goods.
• These tariffs are seen as a tactic to pressure Canada back into USMCA review negotiations, mirroring past NAFTA tactics.
• U.S. negotiators are currently in Mexico City discussing with Mexico, while Canada has been absent from talks.
• Shaw expects a deal with Mexico between now and year-end, with Canada likely returning to the table in the next couple of months.
• There is a 30-day window before tariffs take effect, providing a potential off-ramp for U.S.-Canada negotiations.
• Trade policy remains a major focus of the administration, with additional creative tariff tools like Section 338 under consideration.