Canada ramps up US trade talks as Trump threatens 50% tariff

Canada is stepping up talks with the United States to try and secure a broad trade deal, Prime Minister Mark Carney said on Thursday, while making it clear that Ottawa is ready to respond if US President Donald Trump goes ahead with a 50 per cent tariff on Canadian goods. The new tariffs, announced on Monday, are due to take effect on August 19.

Speaking after a meeting with provincial premiers and territorial leaders in Prince Edward Island, Carney said Canada would not react before the deadline, but warned that "everything's on the table" if no agreement is reached. "If these tariffs, or other measures come into force, there's a full range of things that we can do in that regard," he said. "We don't need to respond in advance. In fact, I think it would be counterproductive at this stage to respond in advance."

The proposed tariffs cover a wide range of goods, including honey, liquor, cement, dairy products, some wood products, hockey sticks and other items. Energy products, potash, fish and critical minerals are excluded. The tariffs would also apply to goods that had earlier been protected from US import taxes under the United States-Mexico-Canada Agreement, or USMCA. That 2020 trade pact was not renewed by the US, leading to a fresh round of negotiations that could continue until 2036.

Carney said the latest tariff threat could be part of a negotiating tactic by Washington. "We've seen a series of trade negotiations that the US has undertaken, and normally there's a deadline," he said. "Normally there's an outsized tariff associated with that deadline." He added that he believed there was willingness among US officials to reach a deal. Prince Edward Island Premier Rob Lantz said the provinces and the federal government were standing together. "We need to have a united Team Canada approach," he said. "Canada is at its best when provinces and territories and the federal government work together."

Carney also said Canada would continue efforts to strengthen and diversify its economy regardless of the outcome of the talks. "In all circumstances, irrespective of the outcome of these negotiations, Canada will do whatever it takes to build our strength at home and to support Canadian families, workers, our farmers, our businesses," he said. "We're diversifying our partnerships abroad." An analysis by Desjardins said the tariffs would affect about CAD 28 billion worth of Canada's annual exports to the US, or about 5 per cent of what the US imports from Canada each year. "Beyond the direct trade effects, heightened uncertainty could dampen business confidence and curb investment plans," the analysis said. It added that Ontario, Quebec and British Columbia would be the provinces most affected.

Before the meeting, Ontario Premier Doug Ford said Canada needed to project strength. "We need a strong plan," he said. "Be on offence. Put everything on the table." Asked if he would impose a surcharge on electricity sold by Ontario to the US, Ford said, "It depends where we go with the US. Ontario has the most to lose right now. I will do everything to protect the people of Ontario." When asked whether Trump could be trusted even if a deal was reached, Carney said, "I have to be convinced, the team has to be convinced, the premiers have to be convinced that an agreement is worth the paper it's written on." With the August 19 deadline approaching, Canada is continuing negotiations with the US while keeping its response options open.

With PTI Inputs

Canada is stepping up talks with the United States to try and secure a broad trade deal, Prime Minister Mark Carney said on Thursday, while making it clear that Ottawa is ready to respond if US President Donald Trump goes ahead with a 50 per cent tariff on Canadian goods. The new tariffs, announced on Monday, are due to take effect on August 19.

Speaking after a meeting with provincial premiers and territorial leaders in Prince Edward Island, Carney said Canada would not react before the deadline, but warned that "everything's on the table" if no agreement is reached. "If these tariffs, or other measures come into force, there's a full range of things that we can do in that regard," he said. "We don't need to respond in advance. In fact, I think it would be counterproductive at this stage to respond in advance."

The proposed tariffs cover a wide range of goods, including honey, liquor, cement, dairy products, some wood products, hockey sticks and other items. Energy products, potash, fish and critical minerals are excluded. The tariffs would also apply to goods that had earlier been protected from US import taxes under the United States-Mexico-Canada Agreement, or USMCA. That 2020 trade pact was not renewed by the US, leading to a fresh round of negotiations that could continue until 2036.

Carney said the latest tariff threat could be part of a negotiating tactic by Washington. "We've seen a series of trade negotiations that the US has undertaken, and normally there's a deadline," he said. "Normally there's an outsized tariff associated with that deadline." He added that he believed there was willingness among US officials to reach a deal. Prince Edward Island Premier Rob Lantz said the provinces and the federal government were standing together. "We need to have a united Team Canada approach," he said. "Canada is at its best when provinces and territories and the federal government work together."

Carney also said Canada would continue efforts to strengthen and diversify its economy regardless of the outcome of the talks. "In all circumstances, irrespective of the outcome of these negotiations, Canada will do whatever it takes to build our strength at home and to support Canadian families, workers, our farmers, our businesses," he said. "We're diversifying our partnerships abroad." An analysis by Desjardins said the tariffs would affect about CAD 28 billion worth of Canada's annual exports to the US, or about 5 per cent of what the US imports from Canada each year. "Beyond the direct trade effects, heightened uncertainty could dampen business confidence and curb investment plans," the analysis said. It added that Ontario, Quebec and British Columbia would be the provinces most affected.

Before the meeting, Ontario Premier Doug Ford said Canada needed to project strength. "We need a strong plan," he said. "Be on offence. Put everything on the table." Asked if he would impose a surcharge on electricity sold by Ontario to the US, Ford said, "It depends where we go with the US. Ontario has the most to lose right now. I will do everything to protect the people of Ontario." When asked whether Trump could be trusted even if a deal was reached, Carney said, "I have to be convinced, the team has to be convinced, the premiers have to be convinced that an agreement is worth the paper it's written on." With the August 19 deadline approaching, Canada is continuing negotiations with the US while keeping its response options open.

With PTI Inputs