Prime Minister Mark Carney announced Thursday that Canada is intensifying negotiations with the United States to reach a comprehensive trade agreement, while simultaneously preparing to retaliate should President Donald Trump's proposed 50% tariffs on Canadian goods be implemented.
Trump's new tariffs, announced on Monday, are slated to take effect on August 19. "If these tariffs, or other measures come into force, there’s a full range of things that we can do in that regard," Carney stated after a meeting with Canada's premiers and territorial leaders in Charlottetown, Prince Edward Island. He indicated that "everything’s on the table" if an agreement cannot be reached before the deadline.
Carney suggested the tariff threat might be a negotiation tactic, noting that "normally there’s a deadline" and "normally there’s an outsized tariff associated with that deadline" in U.S. trade negotiations. He expressed belief in a willingness among U.S. officials to finalize a deal.
The proposed tariffs would impact a wide array of goods, including honey, liquor, cement, dairy products, certain wood products, and hockey sticks. Energy products, potash, fish, and critical minerals would be excluded. These tariffs would apply to goods previously protected under the United States-Mexico-Canada Agreement (USMCA), a 2020 trade pact whose non-renewal by the U.S. has triggered the current round of negotiations that could extend until 2036.
An analysis by Desjardins, a Canadian financial institution, estimates that the tariffs could affect approximately 28 billion Canadian dollars ($19.8 billion) in annual Canadian exports to the U.S., representing about 5% of U.S. imports from Canada. The analysis also warned that "beyond the direct trade effects, heightened uncertainty could dampen business confidence and curb investment plans."
Provinces expected to be most impacted include Ontario, Quebec, and British Columbia. Ontario Premier Doug Ford emphasized the need for Canada to demonstrate strength, stating, "We need a strong plan. Be on offense. Put everything on the table." When asked about imposing surcharges on electricity sold to the U.S., Ford replied, "It depends where we go with the U.S."
Carney affirmed a united front among Canadian leadership, stating, "We need to have a united Team Canada approach. Canada is at its best when provinces and territories and the federal government work together." He added that regardless of the negotiation outcome, Canada will "do whatever it takes to build our strength at home and to support Canadian families, workers, our farmers, our businesses." The nation is also pursuing diversification of its economy by building trade relationships with countries beyond the U.S.
Regarding trust in any potential agreement with the U.S., Carney stated, "I have to be convinced, the (negotiating) team has to be convinced the premiers have to be convinced that an agreement is worth the paper it’s written on."