US-Canada trade dispute rumbles on

A US ban on nearly $1 billion worth of Canadian imports has done little to ease a trade dispute between the two countries, analysts said, with talks showing limited progress and US President Donald Trump saying he is in no rush to resume negotiations.

The ban, which took effect Sept 29, includes alcoholic beverages, dairy products and motorcycles, and is adding pressure on Canadian businesses that rely heavily on the US market, particularly smaller producers already facing high tariffs.

Trump said on Monday that he was "in no rush" to restart trade talks with Canada. On Wednesday, he said Ottawa had been "very difficult to deal with" and that Washington was not satisfied with the terms currently on the table.

The measure is relatively small compared to the roughly $880 billion in annual two-way trade between the two countries.

"The direct impact on the overall Canada-US trade relationship is fairly small because the products covered by the ban represent only a small share of total bilateral trade," said Mesbah Fathy Sharaf, an economics professor at the University of Alberta.

"However, the impact could be much more serious for the Canadian companies directly affected, especially smaller producers that depend heavily on the US market," Sharaf told China Daily.

"The wider concern is that the ban adds another layer of uncertainty to an already tense trade relationship," he said.

Ronald Stagg, a history professor at Toronto Metropolitan University, similarly said the nearly $1 billion figure should be viewed in the context of the much larger bilateral trading relationship.

"One billion is not much in the total amount of trade, but if you are a small businessperson who does a sizable amount of business with the US, this can be a serious issue," Stagg told China Daily.

"Federal supports for industries hurt by tariffs generally do not cover smaller players," he said, adding that previous tariffs had already prompted some small companies to consider opening branch plants in the United States, "a costly and time-consuming measure".

The US restrictions came after months of escalating tariffs and retaliatory measures between the two countries.

Sharaf said the additional damage from the ban "may be limited because many of these products were already facing very high tariffs".

"In some cases, the tariffs had already made it difficult for Canadian producers to compete in the US market," he said.

But he said an import ban was fundamentally different from a tariff.

"With a tariff, companies can continue selling if buyers are willing to pay the higher price. A ban closes the market completely," Sharaf said.

"For some producers, especially those with few alternative export markets, that difference could be important."

The costs of the restrictions could also extend beyond Canadian exporters, he said.

"Canadian producers are likely to feel the immediate impact because they lose access to an important market," Sharaf said. "US importers and distributors that rely on these products will also face costs."

"American consumers may see fewer choices and, in some cases, higher prices if the products are difficult to replace," he said.

"So the cost will be shared, although it will not be shared equally."

From tariffs to restrictions

The ban also represents a further shift from tariffs to outright restrictions on trade.

"I am not sure why the shift from tariffs to the outright banning of certain imports has taken place," Stagg said. "It may simply represent added pressure on Canada."

Sharaf said Washington had significant leverage because of the importance of the US market to Canadian exporters.

"The United States has significant bargaining power because the US market is extremely important for Canadian exporters. That gives Washington leverage in negotiations," he said.

But the two economies remain closely intertwined, he said.

"Canadian and American businesses depend on each other through trade and cross-border supply chains. For that reason, prolonged trade restrictions can create costs on both sides," Sharaf said.

Trump's shifting comments on the timing of a deal have drawn skepticism from both experts.

Sharaf said he viewed Trump's three- or four-week timetable primarily as a negotiating tactic rather than evidence that an agreement was imminent.

"From an economic perspective, trade disputes rarely end with one side simply winning everything. They usually involve concessions and costs for both sides," he said.

Stagg was even more skeptical of Trump's comments.

"Trump's comments are typical of how he deals with a situation that is not going his way, say, for example, the confrontation with Iran," Stagg said.

"The comments don't really mean anything. They are just to keep his critics silenced."

He said Trump's remarks should not be interpreted as evidence that negotiations were advancing.

"Only an acknowledgment by the Canadian government that the two sides are near to a deal would indicate progress," he said.