President Donald Trump left the White House Friday declaring that negotiations with Canada are “not really a negotiation” and warning that Ottawa may simply “pay the tariffs.”
“We don’t have a deal with Canada,” he said, predicting that once a formal notice is issued, “they just pay. That’s the deal.”
The remarks land nine days before an Aug. 1 deadline that could push the adhoc 25% duty on non-USMCA Canadian goods to 35%. Steel and aluminum already face a 50% hit, autos by 25%, while energy holds a preferential 10% rate. Goods entering under USMCA stay duty-free, but any failure to re-strike terms would leave roughly one-tenth of Canadian exports exposed to the looming 35% levy, according to CIBC Capital Markets.
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Trump argues the escalation is necessary to curb what he calls “extraordinary” Canadian barriers and fentanyl inflows, even though only 0.2% of US fentanyl seizures occur at the northern border.
Under USMCA Chapter 31, sweeping duties can be challenged if they stray from national security grounds. Trump’s fentanyl rationale may test that boundary, yet the International Emergency Economic Powers Act still hands the president broad authority.
Prime Minister Mark Carney is holding the line. “Canada will not accept a bad deal,” he said this week, insisting quality trumps speed. Intergovernmental Affairs Minister Dominic LeBlanc echoed the stance, noting that progress continues but “we have a lot of work in front of us,” while Ambassador Kirsten Hillman promised Ottawa will negotiate “until it gets a satisfactory deal.”
Talks have sprawled beyond trade into border security, defence spending, and Trump’s proposed Golden Dome missile shield—linkages Ottawa rejects as extraneous.
Data show a US$63.3 billion US goods deficit with Canada last year, contradicting Trump’s frequent claims of American victimhood. Canada remains the United States’ top export destination, absorbing more than US$349 billion in US goods in 2024.
Yale’s Budget Lab pegs the effective US tariff rate at 17.6%—its highest since 1934—and rising. Treasury Secretary Scott Bessent predicts customs receipts could top US$300 billion this year, but Yale researchers counter that consumer prices will feel the squeeze once inventories run down.
Information for this briefing was found via The Globe And Mail and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
