Trump Threatens Tariffs as Canada Trade Deal Falters

Trump Signals Breakdown in U.S.-Canada Trade Talks

U.S. President Donald Trump announced Friday that a new trade deal with Canada may not materialize, suggesting that the northern neighbor could face steep tariffs instead of a negotiated agreement. Speaking to reporters outside the White House before departing for Scotland, Trump said, “We haven’t really had a lot of luck with Canada. I think Canada could be one where there’s just a tariff, not really a negotiation”.

This marks a significant shift in tone from earlier optimism. Trump has set an August 1 deadline to finalize trade deals with major partners, threatening to impose 35% tariffs on Canadian goods not compliant with the Canada-U.S.-Mexico Agreement (CUSMA). Currently, Canadian steel and aluminum already face 50% tariffs, while energy and potash are taxed at 10%.

Canadian officials, including Prime Minister Mark Carney and Trade Minister Dominic LeBlanc, have acknowledged the difficulty of reaching a deal by the deadline. LeBlanc stated, “Canadians expect us to take the time necessary to get the best deal we can in the interest of Canadian workers”.

The proposed tariffs are part of Trump’s broader strategy to pressure trading partners into opening their markets. While deals with countries like Japan and the Philippines have been announced, Canada remains a sticking point.

As the deadline looms, uncertainty grows for Canadian industries, particularly in manufacturing and agriculture, which rely heavily on U.S. exports. The Canadian government has vowed to continue negotiations but emphasized that it will not rush into a deal that compromises national interests.