Trump's top economic adviser says Trudeau shouldn't be 'enormously worried' about NAFTA renegotiation

Donald Trump's chief economic adviser says Canada should not be "enormously worried" about the newly minted president's move to renegotiate the North American Free Trade Agreement, despite the possibility of a border tax on energy imports.

Canada isn't in president's crosshairs, as trade between 2 countries is largely balanced, Schwarzman says

Stephen Schwarzman, chair of President Donald Trump's strategic and policy forum, answers questions at a news conference after meeting with Prime Minister Justin Trudeau in Calgary. Schwarzman said Trudeau should not be 'enormously worried' about the prospect of Trump renegotiating NAFTA. (Todd Korol/Canadian Press)

Donald Trump's chief economic adviser says Canada should not be "enormously worried" about the newly minted president's move to renegotiate the North American Free Trade Agreement, despite the possibility of a border tax on energy imports.

Prime Minister Justin Trudeau is holding a three-day retreat in Calgary with his inner circle to map out strategy on trade relations with the new U.S. administration.

There may be some modifications, but basically, things should go well for Canada.- Stephen Schwarzman, Trump adviser

Stephen Schwarzman, who is the chief executive of the U.S. investment firm Blackstone Group and was appointed in December to head Trump's Strategic and Policy Forum, met with Trudeau early Monday in Calgary and told him Canada is not in the president's crosshairs, as trade between the two countries is largely balanced.

"One of the important things is the unusually positive view that's held of Canada," Schwarzman said.

"Canada has been a great partner for the U.S. for as long as anybody can remember. There may be some modifications, but basically, things should go well for Canada … it's a model for how trade relations should be; it's a positive sum game. Canada is well-positioned."

Kushner not coming

There had been plans for Trump's son-in-law, Jared Kushner, to travel to Calgary on Tuesday to speak with members of the cabinet about NAFTA and other topics, according to a senior source who spoke to CBC News earlier Monday. But by late afternoon those plans had fallen through.

"We can now confirm to you that no other officials from the U.S. administration, beyond Mr. Schwarzman, will be present here at the retreat," a spokesperson for the Prime Minister's Office said. "A high level of engagement between our government and the U.S. administration certainly continues."

Sean Spicer, Trump's White House press secretary, confirmed Monday the president will meet with both Trudeau and Mexican President Enrique Pena Nieto within the next 30 days to discuss the terms of a renewed trilateral trade agreement. Spicer reiterated there is a possibility Trump will withdraw from NAFTA entirely if he cannot secure some concessions.

Canada's ambassador to the U.S. has said there is a concern the country could face "collateral damage" from Trump's focus on rejigging trade policy. Schwarzman told reporters the chances of that sort of retribution are low, but acknowledged his country's leaders have considered applying tariffs to energy imports.

"One of the things the U.S. is looking at is a potential border tax, which, I think if you're in NAFTA is a good place to be," Schwarzman said. "I think that will be one of the issues, ultimately, to be discussed."

Minister of Natural Resources James Carr answers questions from the media at a Liberal cabinet retreat in Calgary, Alta. Carr said he has heard no talk of the Trump administration imposing a border tax on Canada's energy exports. (Todd Korol/Canadian Press)

​Canada's natural resources minister, Jim Carr, said Monday he has heard nothing of the Trump administration imposing a "border tax" on Canada's energy exports, something that has been floated by Republican House Speaker Paul Ryan in the past as part of his plan to overhaul the U.S. tax regime.

The tax would make Canadian oil and gas more expensive for U.S. refineries to buy, and there are serious concerns from some in Alberta's oilpatch that it could lead to an exodus of investment dollars to projects south of the border.

Marc Garneau, Canada's transportation minister and a member of the cabinet's Canada-U.S. relations committee, said reopening NAFTA is not necessarily a death knell for Canada, and could be a chance for the Liberal government to rewrite some terms of the deal to suit their progressive agenda — confirming it will have a list of its own demands.

"Obviously when you are going to re-negotiate something, it goes both ways," he said. "Canada will also be presenting its point of view."

Canada could still pursue TPP talks

Trump, meeting with members of his cabinet and high-profile executives on Monday, repeated his plans to cut the U.S. corporate tax rate and to go after companies that move factories abroad. Trump also signed an executive order to pull the U.S. out of the Trans-Pacific Partnership trade deal.

The 12-nation TPP, which includes Canada, was signed last year and was awaiting ratification, but it won't take effect if either the U.S. or Japan fails to ratify it.

International Trade Minister François-Philippe Champagne said Canada is still considering its options. While TPP as it is currently constituted might be dead thanks to Trump's actions, there could be room for bilateral trade deals with other free-trading nations in the Asia-Pacific region.

Economies 'very much integrated'

Carr said meetings with representatives in the U.S. Congress, senators and members of the new president's transition team have so far been positive despite some of the protectionist rhetoric emanating from Trump. Carr said many have been receptive of Canada's messaging about the importance of the economic relationship.

"I think people realize that the economy between Canada and the United States is very much integrated, and that when we create important jobs it benefits both sides of the border," Carr said.

Chrystia Freeland, who was recently promoted to foreign affairs minister after Stéphane Dion was shuffled out, said the government has been reaching out to create personal relationships with those in the fledgling Trump administration, including with the likes of Schwarzman, whom she called her "longtime friend."

With files from CBC's Alison Crawford