The second temporary exemption for Canada from steep new tariffs imposed by the United States on steel and aluminum imports expires on Friday and officials are facing down the ticking clock to find a solution.
Just like last time, Foreign Affairs Minister Chrystia Freeland is hinting Canada will retaliate if U.S. President Donald Trump does not renew the exemptions granted first in March, then again last month, which prevented new tariffs of 25 per cent and 10 per cent from hitting Canadian steel and aluminum producers who export their goods to the United States.
READ MORE: Chrystia Freeland headed to Washington for two-day visit as NAFTA negotiations drag on
Attempts to renegotiate the North American Free Trade Agreement (NAFTA) are ongoing and it is not clear when a deal will be reached.
According to a report in the Hill Times, a political goings-on newspaper, negotiators had a deal in hand earlier this year but when they presented the preliminary agreement to Trump, the president nixed it and sent negotiators back to the table with a new set of goals.
Trump has suggested an exemption to the tariffs is tied to securing a NAFTA deal of his liking.
Trump is also now threatening to impose steep new tariffs on imported cars in an attempt to get Canada and Mexico to cave to his demands, and has directed U.S. Commerce Secretary Wilbur Ross to launch an investigation into whether auto imports pose a national security threat.
WATCH BELOW: Possible U.S. auto tariffs are based on flimsy logic, Trudeau says
But on Tuesday, Prime Minister Justin Trudeau downplayed the threats as a “negotiating tactic” and said Canada would not be pressured into a bad deal.
“No NAFTA is better than a bad deal, and we’ve made that very clear to the president,” Trudeau said in an interview on Tuesday with Bloomberg. “We are not going to move ahead just for the sake of moving ahead.”
Trudeau reportedly tried to talk to Trump on Tuesday night about the looming tariffs but instead got a phone call with Vice President Mike Pence.
WATCH BELOW: Freeland vague on if steel exemptions will continue for Canada
Freeland was also in Washington on Tuesday for a visit expected to last through Wednesday.
However, she cut the visit short and returned to Ottawa on Wednesday morning.
Speaking with reporters shortly after her return, Freeland said it would be “absurd” to view auto imports from Canada as a national security threat.
She also said she spoke with U.S. Trade Representative Robert Lighthizer for two hours on Tuesday about NAFTA and stressed the government views discussions around proposed tariffs and NAFTA as distinct.
“The engagement is very intense,” Freeland said.
She also warned again that Canada will respond in kind if tariffs are implemented.
WATCH BELOW: Chrystia Freeland responds to Trump’s criticism of Canada in NAFTA
Time pressure is adding to the complex situations.
Mexico will hold a presidential election on July 1 that could bring to power a new government and new negotiating priorities.
The United States is also gearing up for mid-term elections this fall.
Republican House Speaker Paul Ryan initially had set a deadline of May 17 for a new NAFTA deal to be able to get Congressional approval this year.
When that deadline was not met, he then suggested negotiators would have another week or two to reach a deal and get it through Congress.
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