Canada ‘disappointed’ by Trump boosting tariffs to 35%, says Carney

Prime Minister Mark Carney released a statement late Thursday night after U.S. President Donald Trump signed an executive order to increase a tariff on Canadian goods to 35 per cent on Friday.

“While the Canadian government is disappointed by this action, we remain committed to [the Canada-U.S.-Mexico Agreement], which is the world’s second-largest free trade agreement by trading volume,” the statement read. 

“The U.S. application of CUSMA means that the U.S. average tariff rate on Canadian goods remains one of its lowest for all of its trading partners. Other sectors of our economy — including lumber, steel, aluminum, and automobiles — are, however, heavily impacted by U.S. duties and tariffs. For such sectors, the Canadian government will act to protect Canadian jobs.”

Trump’s executive order states that the tariff rate, which had been set at 25 per cent since March, will now rise to 35 per cent.  

The order cites “Canada’s lack of co-operation in stemming the flood of fentanyl and other illicit drugs across our northern border” and the fact that Canada has retaliated against the United States for the president’s actions.

However, Canadian goods that meet the terms of the Canada-U.S.-Mexico Agreement will not be subject to the tariff, which means the vast bulk of Canada’s exports can still cross the border tariff-free.  

Border security improvements

Carney’s statement on Thursday also outlined all the work Canada has been doing to crack down on fentanyl and increase border security.

“Canada accounts for only one per cent of U.S. fentanyl imports and has been working intensively to further reduce these volumes,” he said. 

“Canada’s government is making historic investments in border security to arrest drug traffickers, take down transnational gangs, and end migrant smuggling.”

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Carney says they have hired thousands of new law enforcement and border security officers, implemented aerial surveillance and increased Canada’s intelligence and security operations.

Speaking to reporters at the White House, Trump was asked whether Carney’s announcement that Canada plans to recognize a Palestinian state was a deal-breaker on trade. 

“I didn’t like what they said, but you know, that’s their opinion,” Trump said. “Not a deal-breaker. But we haven’t spoken to Canada today. He’s called and we’ll see.” 

Negotiations ongoing

Trump told NBC News Thursday evening that he was open to further discussions with Canada, adding that he may even speak with Canadian Prime Minister Mark Carney later in the night.

Carney’s office would not confirm that a call was placed to the White House, and told CBC News it is not confirming any details about the ongoing negotiations.

In a separate executive order on Thursday, Trump hit dozens of countries around the world with new across-the-board tariff rates ranging from 15 to 41 per cent.

After speaking with Mexican President Claudia Sheinbaum, Trump gave Mexico a 90-day extension of its current tariff regime, despite having previously threatened to raise the rate effective Friday.  

Canada’s trade negotiating team is in Washington, but officials were tight-lipped Thursday about who they were meeting with — if anyone.

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Tariffs remain ‘unjustified,’ says Poilievre

Conservative Leader Pierre Poilievre took to social media Thursday evening, calling the tariffs “unjustified” and saying his party continues to hold out hope for a deal to end all tariffs. 

“That means zero tariffs on our steel, aluminum, softwood, autos, energy, agriculture and everything else,” he wrote on the social media platform X.

“That is the deal Canada had before and the Prime Minister should accept nothing short of that.”   

Earlier, Ontario Premier Doug Ford called the tariff increase concerning and said Ottawa should retaliate with 50 per cent tariffs on U.S. steel and aluminum. 

“Canada shouldn’t settle for anything less than the right deal,” Ford said on X. “Now is not the time to roll over. We need to stand our ground.”

Unions want to see action

Unifor national president Lana Payne said she agrees with Ford. 

“This is the fight of our lives,” said Payne, whose union represents some 40,000 autoparts and assembly workers in Canada.

“And we need to use all our leverage to fight for Canadian workers and their jobs. The stakes are high but we can do this Canada!”

For more than a week, Carney and other Canadian officials have been downplaying the likelihood of getting a deal by the deadline. They’ve also cast doubt on the urgency, given the exemption that allows roughly 90 per cent of Canadian exports to enter the U.S. tariff-free.

David Paterson, Ontario’s representative in Washington, told CBC’s Power & Politics guest host David Common that Canadians should not be overreacting to the lack of a deal right now. 

“The sun will shine in the morning and we will carry on,” Paterson said Thursday from his office in Canada’s embassy in Washington.

“We really support the prime minister’s approach. When the time is right for that agreement to come together, it will.”  

Comments from U.S. officials

White House press secretary Karoline Leavitt suggested earlier Thursday that the threatened tariff increases would kick in unless Trump reached last-minute deals with trading partners. 

“Those countries that either do not have a deal or have a letter, they will be hearing from this administration by the midnight deadline tonight,” Leavitt told reporters in a briefing.

Trump’s Commerce Secretary Howard Lutnick criticized Canada for being one of the only countries to retaliate against Trump’s tariffs.

“I just don’t see the president stepping off the gas,” Lutnick said in an interview on Fox Business Network.

Trump issued similar ultimatums with the same Aug. 1 deadline to 17 major trading partners across the globe, including the European Union, Japan and Taiwan. Each contained threats of tariffs in the range of 30 per cent.  

Last week, Trump announced deals with the EU and Japan with across-the-board tariffs of 15 per cent as well as vague commitments for hundreds of billions of dollars of investment in the U.S.  

A pending legal challenge

Separately, Trump has imposed a 50 per cent tariff on steel and aluminum imports from around the world. Canada is the top supplier of both products to the U.S.

For the tariff that specifically targets Canada, Trump used a law that allows the U.S. president to take emergency economic measures to “deal with any unusual and extraordinary threat” to national security. He cited the supposed flow of fentanyl across the country’s northern border as that threat.

That tariff is facing a legal challenge that has now reached a federal appeals court, putting it further along in the U.S. court system than any other tariff lawsuit.