Canada Will Not Accept A Bad Deal Amid Looming US Tariffs

As the deadline for new tariffs approaches, Canadian Prime Minister Mark Carney asserts that Canada will reject any unfavorable trade deals with the US, showcasing a determination to protect the nation's economic interests in the face of escalating tariffs.

Canadian Prime Minister Mark Carney has firmly stated that Canada "will not settle for a bad deal" as the country navigates a tense trade negotiation landscape with the US. With a deadline of August 1 nearing, US President Donald Trump is set to impose new tariffs that could significantly impact Canadian importers, slapping a 35% tax on goods from Canada if an agreement isn't reached.

"Our goal isn't to hastily finalize a trade deal at any cost," Carney explained to reporters in Ontario. "Instead, we aim for an agreement that truly benefits Canadians." This statement underscores Canada’s stance amidst a backdrop of rising tariffs that have created friction between the two neighboring nations, which are vital trading partners.

Since his return to the White House earlier this year, Trump has enacted a wide-ranging tariff program, implementing a blanket 25% tax on imports of certain Canadian goods, alongside a hefty 50% tariff on aluminium and steel. The rationale offered by Trump for these tariffs has been to bolster American manufacturing and safeguard domestic jobs. However, critics assert that these measures are likely to disrupt the global economy, leading to increased prices for US consumers.

Addressing the impact of these tariffs, Carney hinted at potential protective measures for critical Canadian industries, specifically aluminium and lumber, as the situation develops. He previously announced countermeasures, including higher tariffs on steel imports entering Canada. "In the coming months, we anticipate additional support mechanisms for sectors that face the most severe effects," he remarked during a meeting with provincial leaders.

Historically, about three-quarters of Canadian goods are sold to the US, including essential exports like oil, cars, machinery, and pharmaceuticals. The Office of the US Trade Representative revealed that in 2024, the US exported nearly $350 billion in goods to Canada while importing over $412 billion from its northern neighbor.

In a broader context, Trump has implemented various tariffs targeting specific product categories and foreign countries, arguing that the US has been treated unfairly in trade agreements and using these sanctions to curb illegal shipments, such as fentanyl trafficking. However, data indicates that only a small fraction of fentanyl seizures in the US occurs at the Canadian border.

Despite pursuing trade agreements with several countries—such as the UK, Japan, and the Philippines—many of these negotiations have resulted in maintaining high tariff rates. Recently, an agreement with the Philippines raised tariffs from 17% to 19% on specific goods, reflecting the ongoing complexities in global trade relations.