Trump signals stalled US-Canada trade talks as tariff deadline looms

Investing.com -- As the clock ticks toward a critical August 1 deadline, U.S.-Canada trade negotiations show few signs of progress, with officials on both sides signaling a hardening of positions. U.S. President Donald Trump said Friday that talks with Ottawa have been largely unsuccessful, raising the possibility that tariffs may be the administration’s primary course of action.

“We will have most of our deals finished, if not all. We haven’t really had a lot of luck with Canada,” Trump told reporters. “I think Canada could be one where they just pay tariffs. It’s not really a negotiation.”

Washington’s immediate focus has turned toward the European Union, while Canada remains on the periphery of the White House trade agenda. “We’re working very diligently with Europe, the EU, which covers a lot of territory... That’s the big one right now... We don’t have a deal with Canada, we haven’t been focused on it,” Trump added.

Without a new trade pact in place, existing tariffs on certain Canadian exports are scheduled to rise to 35% from 25%, particularly on non-CUSMA goods.

Canadian Minister of Intergovernmental Affairs Dominic LeBlanc concluded talks in Washington this week, meeting briefly with U.S. Commerce Secretary Howard Lutnick. “We’ve made progress, but we have a lot of work in front of us,” LeBlanc said following the meetings.

Prime Minister Mark Carney has tempered expectations for any breakthrough, reiterating the government’s commitment to national interest over expediency. "The Government of Canada will not accept a bad deal,” Carney stated, adding that Ottawa would proceed only “in the best interest of Canadians.”

Analysts from BofA Securities have cited tariff exemptions for CUSMA goods as leaving Canada and Mexico as the best-positioned countries currently subject to U.S. levies. The exemptions afford Canada some leeway, aligning with Trump’s comments that the government may potentially foot the tariff bill, all in hopes of a better deal.

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