Tariff-free trade deal unlikely with US, says Canadian PM as deadline nears

Canada's PM Mark Carney says the chances of a tariff-free trade deal with the US are slim as Donald Trump is set to impose 35% tariffs on Canadian imports from August 1

Canadian Prime Minister Mark Carney said Tuesday (local time) there is little evidence Ottawa can secure a trade deal with the United States that avoids tariffs, in a shift from the more hopeful tone his government had maintained in recent months.

 

“There’s not a lot of evidence right now that we’re going to get a tariff-free deal,” Carney told reporters on his way into a cabinet meeting, reported CBC News. “We will continue to focus on what we can most control, which is building a strong Canadian economy.”

 

The comment represents a reversal for the Liberal prime minister, who had repeatedly said negotiations with the US were progressing toward lifting tariffs on Canadian steel, aluminium and autos. But recent actions by US President Donald Trump appear to have cast doubt on that outlook.

 

 

Carney did not say whether he would now accept a deal that includes tariffs, but noted that the global trading environment had shifted. “There’s currently little prospect for any country, any jurisdiction, to have a tariff-free deal,” he said.

 

Mark Carney sets July 21 deadline for US trade talks

Carney’s remarks follow last month’s Group of Seven (G7) summit in Canada, where he had set July 21 as a deadline for reaching a new agreement with the US. Trump dismissed that timeline and last week announced plans to impose 35 per cent tariffs on Canadian imports starting August 1.

 

It is unclear whether those tariffs would apply to products that meet the current North American trade agreement between Canada, the US and Mexico.

 

The US has already imposed 50 per cent tariffs on steel and aluminium, Canada is the largest exporter of both to its southern neighbour, and 25 per cent duties on vehicles, excluding those with US-made parts.

 

Trump has also proposed new tariffs on copper and threatened action against Canada’s dairy supply management system, along with exports of pharmaceuticals and softwood lumber.

 

Meanwhile, last month, the Carney government announced a three per cent digital services tax on large tech firms, most of them based in the US. Trump abruptly ended trade talks in response. Carney later cancelled the tax, and negotiations resumed.

 

Digital tax dispute stalls talks

On Tuesday, Carney said Canadians need to adapt to the shifting international landscape. “Canadians need to recognise the commercial landscape globally has changed,” he said, citing Trump’s approach to trade as a key factor.

 

With just days left before the July 21 deadline and major tariffs looming, the future of Canada’s trade relationship with the US remains uncertain.