PM Carney vows to defend Canada as Trump slaps 35 percent tariffs ahead of trade deal deadline

Canada’s Prime Minister Mark Carney says his government will continue to defend Canadian workers and businesses in their negotiations with the United States on tariffs.

The statement came in response to US President Donald Trump’s announcement of a 35 percent tariff on imports from Canada starting next month, along with plans to impose blanket tariffs of 15 to 20 percent on most other trade partners.

The move is a setback for Carney, who had been seeking a trade deal with Washington.

“Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,” Carney said on X, formerly known as Twitter.

“We will continue to do so as we work towards the revised deadline of August 1. Canada has made vital progress to stop the scourge of fentanyl in North America.”

The letter

On Thursday, Trump released a letter on his social media platform Truth Social, where he said that the new rate would go into effect on August 1 and would go up if Canada retaliated.

An exclusion for goods covered by the United States-Mexico-Canada Agreement (USMCA) was expected to remain in place, while existing 10 percent tariffs on energy and fertiliser were also not set to change, though Trump had not made a final decision on these issues, an administration official said.

Trump complained in his letter about what he referred to as the flow of fentanyl from Canada as well as the country’s tariff- and non-tariff trade barriers that hurt US dairy farmers and others. He said the trade deficit was a threat to the US economy and national security.

“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump wrote.

Canadian officials say a miniscule amount of fentanyl originates from Canada but they have taken measures to strengthen the border.

Carney said last month that he and Trump had agreed to wrap up a new economic and security deal within 30 days.

Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. It bought $349.4 billion of US goods last year and exported $412.7 billion to the US, according to US Census Bureau data.

Carney, who led his Liberal Party to a comeback election victory earlier this year with a pledge to tackle trade challenges with the US, had been aiming to negotiate a trade deal with its key trading partner by July 21.

Trump, in his letter, did not specifically address how trade negotiations were proceeding, but he said the “tariffs may be modified, upward or downward, depending on our relationship with your Country.”

Last month, the Carney government scrapped a planned digital services tax targeting US technology firms after Trump abruptly called off trade talks saying the tax was a “blatant attack.”

More tariffs

Trump has broadened his trade war in recent days, setting new tariffs on a number of countries, including allies Japan and South Korea, along with a 50 percent tariff on copper.

His latest salvo rattled investors anew, with US and European stock futures dipping in Asia on Friday as markets nervously awaited word on what tariff Trump would assign the European Union later on Friday.

“The potential escalation between the EU and the US is a big deal for financial markets,” said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia. “If you get something similar to (the US.-China trade war in April), that’s going to be very destabilising.”

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Source: TRT