Canada Braces for Tariffs in New U.S. Trade Deal

Canadian Prime Minister Mark Carney now acknowledges that a new trade agreement with the United States will likely involve tariffs, despite earlier optimism for a tariff-free arrangement. This shift follows President Donald Trump's threat of a 35% tariff on Canadian goods if negotiations stall, along with tariffs targeting Canadian steel, aluminum, and autos. In response, Canada has enacted countermeasures but has paused plans to escalate countertariffs as discussions continue. The U.S. maintains that goods not compliant with the USMCA could face new duties, though many Canadian exports remain duty-free under the current deal. Canadian officials emphasize their commitment to a deal that protects national interests, while noting that protectionism has increased globally since Trump’s return to office. Negotiations are expected to intensify ahead of the August 1 deadline.