{"id":306994,"date":"2025-07-31T16:17:11","date_gmt":"2025-07-31T16:17:11","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/306994\/"},"modified":"2025-07-31T16:17:11","modified_gmt":"2025-07-31T16:17:11","slug":"canada-braces-as-tariff-deadline-looms-and-talks-with-us-chaos-machine-drag-trump-tariffs","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/306994\/","title":{"rendered":"Canada braces as tariff deadline looms and talks with US \u2018chaos machine\u2019 drag | Trump tariffs"},"content":{"rendered":"

After months of tariff<\/a> threats from the US and escalating trade tensions that have sowed anger in Canada<\/a> and fractured a once-close alliance, the country is now fast approaching a 1 August deadline to reach a deal with the Trump administration<\/a> \u2013 which has shown no signs of backing down.<\/p>\n

And observers are keeping a close eye on negotiations this week to determine whether too large a chasm has grown between the countries, resulting in what could be an explosive end to what was decades of free-flowing trade.<\/p>\n

Canada is also in a highly vulnerable position, as it has closely intertwined its economy with the US\u2019s, and is extremely reliant on a low-barrier trade environment, said William Huggins, an assistant professor in economics at McMaster University in Ontario.<\/p>\n

\u201cCanada has tried to negotiate sort of forcefully from a position of not acquiescing to every demand, but by the same token, has also realised it\u2019s not in the strongest position to do so \u2026 We\u2019ve had to navigate carefully,\u201d said Huggins.<\/p>\n

The Canadian public is also anxiously awaiting the deadline to strike up a deal. Economists and political scientists say the country\u2019s prime minister, Mark Carney<\/a>, was elected on the belief that he\u2019s the right person to be at the helm of negotiations and lead Canada through a tenuous period with their southern neighbour.<\/p>\n

His successes or failures in this arena could affect public perception \u2013 as he has characterised his government as being the most adept in the crisis around its sovereignty due to the tariffs and Donald Trump\u2019s persistent claims that he\u2019d like to make Canada the 51st state.<\/p>\n

\u201c[Carney] is in a situation where he doesn\u2019t hold all the cards and whoever we put in was going to have to figure out a way through this \u2026 [His] ability to plan is severely limited by the chaos machine that is operating south of the border,\u201d said Dennis Pilon, the chair of the politics department at York University in Ontario.<\/p>\n

On Monday, Carney said at a news conference on Prince Edward Island that the trade negotiations are at an \u201cintense pace\u201d and that they are \u201ccomplex\u201d. But he projected tentative optimism, stating that the negotiations are \u201ctough\u201d because the government is standing up for Canadian interests.<\/p>\n

\u201cThere is a landing zone that\u2019s possible but we have to get there. We\u2019ll see what happens,\u201d he told reporters.<\/p>\n

But Trump spoke of the negotiations flippantly when asked by reporters outside the White House last Friday. \u201cWe haven\u2019t really had a lot of luck with Canada \u2026 Canada could be one where there\u2019s just a tariff, not really a negotiation,\u201d he said.<\/p>\n

So far, much of the talks have happened behind closed doors. There was a glimpse into what could be the dynamic between Carney and Trump when the prime minister had his first meeting with the president in the Oval Office in early May. There were positive tones in both initially offering praise for each other, but the encounter quickly grew tense<\/a> as Trump repeated his annexation claims, which were subsequently rebuffed by Carney.<\/p>\n

Since March, Trump has imposed several tariffs on Canadian goods and energy resources. There is a 25% tariff on all goods, excluding potash and energy products. But there\u2019s separately a 10% tariff on energy resources, including potash. Additionally, there\u2019s a further 50% tariff on steel and aluminum imports and a 25% tariff on autos and auto parts.<\/p>\n

At this stage, the tariffs have seemingly not delivered a significant blow to Canada\u2019s economy, but that could change quickly. The Royal Bank of Canada noted in its June forecast that nearly 90% of Canadian goods are exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA), the free trade deal that replaced Nafta in 2020 and which provides a degree of insulation.<\/p>\n

In an assessment published by the Toronto-Dominion Bank (TD) on Tuesday, it reported that energy exports have not been significantly affected by the tariffs, as most exports are compliant under the USMCA, and are therefore exempt from tariffs.<\/p>\n

Some of the insulation so far from tariffs could be from opening Canada up to other markets. TD said that in the past four months, Canadian businesses rapidly moved to reorient supply chains and export to non-US markets. Now about 30% of exports go outside the US \u2013 a level not seen since the pandemic, when TD notes there was disorientation in trade.<\/p>\n

But TD also warned that the negative effects of the tariffs might be beginning to emerge. It said that Canadian exports to the US are \u201cgenerally underperforming\u201d in tariff-targeted industries, particularly steel and automaking. Canada\u2019s auto exports fell to levels not seen since late 2022, following the April imposition of tariffs. Automakers have also \u201cslashed\u201d production in response, it said.<\/p>\n

Andrea Lawlor, an associate professor of political science at McMaster University, said that while there haven\u2019t been many layoffs or a complete reorientation of production lines yet, industries targeted by tariffs are preparing to do so.<\/p>\n

Lawlor also said that Carney has been prudent in his negotiation strategy so far, and right in waiting for deals to be brokered between the US and other nations, as they were this month with Japan and the EU, to help inform Canada\u2019s strategy.<\/p>\n

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And despite concerns about marred relationships with First Nations people<\/a>, pushing forward controversial infrastructure legislation and his quick scrapping of Canada\u2019s digital services tax \u2013 which many, including top former diplomats, viewed as fawning capitulation toward Trump \u2013 the prime minister is still enjoying fairly positive polling in his term\u2019s infancy.<\/p>\n

Abacus Data reported at the end of June that 52% of Canadians surveyed approve of the Carney government. The research firm states it shows that his post-election honeymoon period is \u201cfar from over\u201d.<\/p>\n

Lawlor said the best outcome for Carney in the negotiations is a favourable trade deal \u2013 however, there has been signalling from Carney, in his discussion of \u201ctough\u201d talks so far, that Canadians may have to accept a baseline of tariffs.<\/p>\n

\u201cMany Canadians just simply will not be satisfied if that is the outcome,\u201d she said. But due to Carney facing limited criticism of his interactions with the Americans so far, Lawlor said she believes the prime minister will not face extreme negative blowback if he doesn\u2019t trounce tariffs for good this week.<\/p>\n

But he will be more vulnerable if the tariffs start to place downward pressure on multiple industries, she said.<\/p>\n

As Canadians are waiting and watching for the Friday deal deadline, the real fears are around the cementing of a new world order and whether long-term business and consumer decisions need to be made in response, said Preetika Joshi, an assistant professor at McGill University in Quebec that specialises in taxation.<\/p>\n

\u201cIf you were a business owner and you knew Trump is going to be in power for only three, four years, would you necessarily make big, significant changes in your supply chain \u2026 or would you just wait it out?\u201d she said.<\/p>\n

But given some grim messaging from those close to Carney \u2013 Canadians might be facing tough decisions. Dominic LeBlanc, the federal minister responsible for Canada-US trade, said last week there\u2019s a lot of work ahead of them and minimised the 1 August deadline.<\/p>\n

\u201cWe\u2019re going to continue to work toward the 1 August deadline,\u201d said LeBlanc to reporters in Washington. \u201cBut all of these deadlines are with the understanding that we\u2019ll take the time necessary to get the best deal,\u201d he said.<\/p>\n

Deal or no deal, the negotiations might reveal that there isn\u2019t a best-case scenario, said Joshi.<\/p>\n

\u201cWhat we were used to before Trump, where there were very little tariffs, that reality is slightly over,\u201d she said. \u201cWe\u2019ll have to wait and see \u2026 but the reality is that there are going to be some tariffs.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"After months of tariff threats from the US and escalating trade tensions that have sowed anger in Canada…\n","protected":false},"author":2,"featured_media":306995,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[49,978,659],"class_list":{"0":"post-306994","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-united-states","9":"tag-us","10":"tag-usa"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114948750964542506","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/306994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=306994"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/306994\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/306995"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=306994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=306994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=306994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}