U.S. President Donald Trump indicated on Friday that a trade agreement with Canada might not materialize, suggesting that Canada “could be one where they’ll just pay tariffs, not really a negotiation.” His comments come ahead of an August 1st deadline he set for various trade deals.
Trump’s remarks followed earlier optimism from Canada-U.S. Trade Minister Dominic LeBlanc, who had expressed encouragement after meetings with US Commerce Secretary Howard Lutnick and American lawmakers. The offices of LeBlanc and Finance Minister Francois-Philippe Champagne declined to comment on Trump’s latest statement.
Drew Fagan, a professor at the Munk School of Global Affairs and Public Policy, noted that Trump’s stance could elicit differing reactions in Canada. Some might view it as an expected outcome given the demands on sovereignty, while others would be concerned about continued economic uncertainty and the impact of additional tariffs.
Earlier this month, Trump sent letters to several nations, including Canada, threatening high tariffs on imports if no deal is reached by August 1st. While the Canada-United States-Mexico Agreement (CUSMA), which took effect in 2020, currently exempts certain items from these tariffs, existing duties on Canadian steel, aluminum, and automobile exports to the U.S. remain. New copper duties are also anticipated to take effect in the coming week. Even with CUSMA exemptions, a lack of a broader trade deal would still have a significant impact, leading to market disruption and a decline in confidence.
The Canadian Chamber of Commerce, in a statement, urged a focus on securing a “good deal” despite the “heated rhetoric” during negotiations. Candace Lang, president and CEO of the Chamber, emphasized the long-term goal of a positive outcome as long as trade discussions continue. Unifor, representing auto industry workers, echoed this sentiment, urging Canadian negotiators to disregard the “bluster” and prioritize a deal that benefits the country.
Prime Minister Mark Carney, at a recent summit with provincial premiers, reiterated that he would not accept a “bad deal” for Canada, emphasizing the importance of preserving and stabilizing relationships while maintaining Canada’s ability to pursue its own agenda.
Trump has announced several trade agreements this week with countries including Japan, the Philippines, Indonesia, Vietnam, and the U.K., all of which reportedly include some form of tariff. Some automakers are committed to the possibility of a Canada-US deal that upholds CUSMA provisions. However, the Global Automakers of Canada expressed concern that the U.K. and Japan could benefit from lower automotive tariffs than CUSMA partners, despite Canadian-built vehicles containing at least 50 percent US content.
Details of these new frameworks are still emerging, but Trump stated that close to 200 “one and a half page” letters, signifying completed deals, would soon be dispatched. Last week, Carney had noted that there was “not a lot of evidence” that any country would secure a tariff-free agreement with the U.S.
Amidst the ongoing negotiations, a bipartisan group of U.S. senators visited Canada earlier this week, meeting with Prime Minister Carney. Senator Lisa Murkowski of Alaska expressed a desire for a “better place” in the trade relationship, stating that Canada should not be treated “as yet one more country that we need to reconcile tariffs on,” although she cautioned that a resolution before August 1st was unlikely.