The Q&A: "Disappointed? Sure."

From Washington, Dominic LeBlanc, minister for Canada-US trade, on Sad-Face Deal Day

Trade Deal Day is always a letdown. For Canada and Mark Carney’s government, it came down to a late-evening announcement of 35% tariffs for everything not covered by CUSMA, which includes a lot of stuff. The Prime Minister said he’s disappointed. Dominic LeBlanc, his minister of this and that, had some time in Washington to do interviews before catching his flight. We had 10 minutes. We managed to cover a fair bit of ground. This transcript has been trimmed only a little for length and clarity.

Paul Wells: I'm left wondering whether there were real negotiations. This seems like we're on a list of tariff rates that's worldwide, and ours is kind of in the zone, and we're slightly protected by CUSMA. But was the other side listening, as far as you can tell?

Dominic LeBlanc: My impression is that absolutely, they were. You said we are “slightly” or “somewhat” protected by the CUSMA carve out. I would say, we are very considerably advantaged by the CUSMA carve-out. The challenge, of course, is on these strategic sectors: steel, aluminum, autos, and, related, but sort of adjacent to that, is softwood lumber.

But your question was: were there negotiations? Sure, there were. Were they constructive and informative in terms of understanding the concerns of the Trump administration around the trading relationship? Absolutely. I had a 3 ½-hour meeting on Tuesday evening with Secretary Lutnick that started at 9:30 in the evening and finished well after midnight. The Prime Minister's Chief of Staff was with me. There were detailed discussions, including things that the American administration thinks that we can do with them. For example, to fight the dumping of steel in the North American market by the Chinese.

Do we leave here this week disappointed? Sure. That the IEEPA tariffs — the so-called fentanyl tariff— was not lowered. The respect for CUSMA was essential for us, and premiers had talked to me about that as recently as yesterday. A number of senior premiers from big provinces affected by the trade relationship were encouraged that the protection of that respect for CUSMA was critical. But the challenge is that the 232 tariffs— the sectoral tariffs that are applying globally that don't benefit from the carve-out, except in automobiles, there's a carve-out for the US content of our cars that are shipped to the US— those tariffs represent a disproportionate challenge for us because those are the sectors in which our economies are very integrated: steel, aluminum, and automobiles, just as examples.

I had a conversation this week with the Mexican Secretary of Economy, Marcelo Ebrard. We're obviously working with the Mexican government as we prepare for the review of CUSMA, maybe as early as this fall. But we were talking about the challenge of these three integrated economies in the sectoral tariffs, where [the Mexicans] didn't get relief either.

But they were real negotiations. We learned more from the Americans and their reaction to some of the things that we were talking about was also very encouraging.

PW: A lot of people are worried that it's all kind of a time suck. All of this time spent— Senior ministers, Marc-André Blanchard in Washington— for what seems like nearly random outcomes. Are you convinced that time in Washington is time well spent?

LeBlanc: Certainly the time we spent, up to and including this week: yes. My conversation with the prime minister, yesterday and again this morning, was mainly focused on the work that the government wants to do on advancing major projects of national interest. I'm also the minister designated under the new legislation as responsible for approving these projects, recommending the designation and then approving the conditions to expedite these major projects. Premiers are talking to me many times a week about these projects. We have a consultation with Metis nations this Thursday in Ottawa, which is the last of those three that we agreed to do.

I'm going to be focused with my colleagues in the coming weeks on advancing the One Canadian Economy work, working on the major projects. But I agreed with Secretary Lutnick yesterday that we had a lot to continue to discuss. We haven't set up a meeting time, but I would expect to talk to him next week and would probably expect to see him again sometime between now and the end of August.

PW: Are we likely to see a major projects list soon? And what does “soon” mean in that context?

LeBlanc: We're hoping that the first batch of major projects that we would intend to designate under the legislation, would come early this fall. The prime minister committed to the Major Projects Office being up and running in the next month. That's the group that will support me in going through the conditions and the consultations that will flow from this process. Some of these projects are more ready than others. Some have financing assigned to them, some are more advanced in terms of environmental and Indigenous consultation and planning. Our hope is that we can start the first batch early this fall, but then keep the process going.

PW: One last question. The President reacted with consternation to the announcement of a plan to recognize a Palestinian state. Did you sense the temperature changing in the negotiations in Washington after the Prime Minister's announcement?

LeBlanc: No. Secretary Lutnick raised that with me yesterday after we sent him the Prime Minister's statement on the potential recognition of a Palestinian state. We spoke to the Americans, around Canada's decision being very much in the same vein as other partners in France, the UK and Mexico. We also spoke to the Americans about how Canada continues to be one of the staunchest defenders of Israel and its right to self-defense. So, sure, we talked about that yesterday, but we also took note that the President in his press conference yesterday afternoon at the White House, said himself, in his own words, that Canada's decision was not a deal-breaker in terms of the trade talks. But Canadians expect us to pursue the foreign policy of Canada in an independent, constructive way with allies from around the world. And that's what the government decided to do with European allies and Mexican allies. The Americans asked us about that. We provided fulsome answers. And then the President said later in the day that it wasn't a deal-breaker. So I think we properly triaged that issue with them yesterday.