International lawyer says U.S.-Japan trade deal offers insight for Canada-U.S. negotiations

International lawyer says U.S.-Japan trade deal offers insight for Canada-U.S. negotiations

William Pellerin is my guest. He’s an international trade lawyer at the law firm McMillan LLP. William, thanks for your time. Good to have you back with us here. Appreciate you joining us on this Wednesday. Great being here, Todd. Yeah. So, we we’re going to bring up that graphic again if we can. I’ll just get the control room. Uh the Japan deal uh and you’re familiar with it. I know you’ve been looking into it uh in earlier hours here as this was announced. I mean, what does that say to you, William, about what Canada may or may not expect from any kind of deal with Trump? What do you think? Yeah, I think it’s a really valuable data point, right? It gives us insight into what countries are able to achieve. Um, Japan has an important trading relationship uh with the United States. So, this is more of an applesto apples comparison for Canada. Of course, Canada’s relationship is far more integrated um across the border than than Japan’s economy is with the United States, but it’s still a good valuable piece of insight into what we might what might be achievable and what’s the US kind of baseline minimum tariff that that might have to stick. So right away I see um they scored some reduction in auto tariffs based on what they otherwise could have been. But of course the tariffs as you pointed out a few minutes ago are still four or five times higher than they were u before the president uh took office uh in January. Um they did not successfully get their steel tariffs uh removed which uh is one of the very important sticking points for Canada. Those are those sectoral section 232 tariffs. So, a lot of really interesting data points that we’re seeing there. Um, and I think it gives us a little bit of insight into the US administration’s mind right now. Yeah. And, you know, people at home are probably familiar. You know, the Japanese, you know, very close allies with the Americans. Uh, and they’re going to be hit with a 15% tariff. So are we. And and so, you know, is there any way to avoid that? It almost seems, uh, William, that the president has has basically said, “Look, uh, no country will be exempt from tariffs. We’re not going back to 2 or 3% there will be a baseline of 10 or 15% even for close allies and that’s you know that’s the reality and if and if you don’t like it and you threaten you know retaliatory tariffs that number will start to go up to 20 25 50 I mean the president can pick any number he wants out of the air and hit a country with it. Yeah I I think that’s right. I think there’s still some level of optimism that Canada can fare relatively well. I think this the sticking point for Canada’s has to be the sectoral tariffs. Those auto tariffs, steel and aluminum in particular, we’re looking at copper and lumber and the like. I think those are really the ones that that have to go. Beyond that, if we’re able to get to a deal that has a residual tariff, but that doesn’t apply to KUSMA or USMCA uh goods, goods that are actually really made in Canada from North American inputs and those are exempted, then maybe that’s something that’s uh that’s livable. And I think we saw uh Premier Smith’s comments um from Alberta on exactly that point that really the sectoral tariffs, those steel, aluminum, autos and the like, those are the ones that um Canada has to work on on on making sure that they they go away. Look at the Japanese deal. So they they got the auto piece reduced somewhat. We’re not successful on steel. Um, so that’s an important data point that that even those sectoral tariffs that we had some optimism could disappear for Canada, uh, might still be on the table if we’re looking at what’s in the on the in the US administration’s mind. Looking forward to talking to you again if we can make that happen, William. Thanks for this in the meantime. Real pleasure. Thanks. Yeah.

Trade lawyer William Pellerin discusses the U.S.-Japan deal, its lessons for Canada-U.S. talks, and prospects for avoiding tariffs.

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