Canada is facing a fresh trade shock. Days after US President Donald Trump raised tariffs on Canadian goods from 25% to 35%, PM Mark Carney broke his silence. He said Canada would engage in talks with the US “when it makes sense.” The move came amid rising tensions over Canada’s alleged “inaction and retaliation.”
Trump had claimed Carney called before the August 1 tariff deadline, but no discussion took place. Now, Canada is signalling a shift in trade strategy—looking to build ties with reliable global partners.
Carney Sends a Clear Message
Speaking in British Columbia, Carney addressed the current state of US-Canada trade ties. “Canada is the second-largest investor in the United States today in the world,” he said. He also noted the country’s population of 40 million, pointing to how deeply connected the two economies are. But the tone was measured. “Without an agreement, there will be less by definition,” Carney warned, hinting at potential economic fallout.
Despite Trump’s claim of a call from Carney, the Canadian side did not confirm any direct talks. Trump had told reporters that Carney “called and we’ll see,” but nothing materialised before the 35% rate was officially announced.
Tariffs Violate USMCA Rules
The tariff spike has raised alarms over potential violations of the Canada-United States-Mexico Agreement (CUSMA). Under the pact, Canadian exports receive tariff-free access to 85% of US-bound goods. Now, with Canadian steel, aluminium, and copper facing a 50% tariff rate, the agreement’s integrity is under question.
Carney confirmed that Trump had recently reaffirmed his commitment to CUSMA. Still, the new tariffs appear to contradict the trade deal’s terms, setting the stage for possible legal or diplomatic challenges.
Canada Seeks Trade Built on Trust
The new direction in Ottawa is clear. On Tuesday, Canadian Finance Minister François-Philippe Champagne met with Foreign Minister Anita Anand and Mexican President Claudia Sheinbaum. “We’re looking for partners we can trust,” Champagne said, highlighting the country’s pivot away from volatile negotiations with Washington.
This recalibration shows Canada is now willing to wait—and walk—if the US continues to play hardball. Carney’s remark that he’ll speak with Trump “when it makes sense” suggests a deliberate pause, not a breakdown.
Trade Talks in a Holding Pattern
For now, both countries remain locked in a trade standoff. Trump’s Friday deadline looms large, as he warns other nations to strike deals or face similar tariff hikes. Canada, however, appears in no rush.
Its focus is on long-term reliability, not short-term political showdowns. As the dust settles, global eyes are now on how Ottawa balances firmness with flexibility.
