Canada Won't Scrap Tariffs Unless All US Levies Are Lifted, Official Says

(Bloomberg) — Prime Minister Justin Trudeau is not open to lifting Canada’s full package of retaliatory tariffs if US President Donald Trump leaves any tariffs on Canada in place, according to a senior Canadian government official.

Trudeau’s government is cool to the idea of a “middle ground” settlement in the trade war floated by US Commerce Secretary Howard Lutnick. In particular, any scenario where Canada has to fully rescind its retaliatory tariffs in return for a partial rollback of American tariffs will be rejected by the Canadian prime minister, said the official, speaking on condition they not be identified.

The official did not comment on whether Canada would scale back some of its retaliation measures if Trump pulls back on at least some US tariffs. Trudeau and Trump are scheduled to speak Wednesday morning. 

The Trump administration imposed 25% tariffs on all Canadian imports to the US on Tuesday, with the exception of energy products such as oil and natural gas, which have a 10% rate. Trudeau’s government responded with levies against C$30 billion ($20.8 billion) in American products, including cosmetics, tires, fruit and wine.

Canada’s counter-tariffs will expand to an additional C$125 billion in items from US exporters later in March. The second phase includes a huge array of categories — including US-made cars and trucks, aluminum, and a long list of food and agricultural products. 

Lutnick told Bloomberg TV earlier on Wednesday that Trump is considering tariff relief for particular sectors, possibly including automotive.

“There are going to be tariffs — let’s be clear — but what he’s thinking about is which sections of the market that maybe he’ll consider giving them relief until we get to, of course,