Canada is prepared to implement retaliatory measures if President Donald Trump follows through with his threat to impose 50% tariffs on Canadian goods, Prime Minister Mark Carney announced Thursday. The proposed tariffs are slated to take effect on August 19.
Carney indicated that while Canada is intensifying negotiations with the United States to secure a comprehensive trade agreement, the nation has a "full range of things that we can do" if the tariffs, or other measures, are implemented. He confirmed that "everything's on the table" if an agreement cannot be reached before the deadline, but stressed that a response is not necessary in advance of the tariffs taking effect.
The proposed tariffs would impact a wide array of products, including honey, liquor, cement, dairy products, certain wood products, and hockey sticks. However, energy products, potash, fish, and critical minerals would be excluded. These tariffs would apply to goods previously protected from U.S. import taxes under the United States-Mexico-Canada Agreement (USMCA), a trade pact that was not renewed by the U.S., initiating new negotiations that could extend until 2036.
Carney suggested that the tariff threat could be a negotiating tactic by the U.S., noting that such deadlines and associated tariffs are common in trade negotiations. He expressed belief in a willingness among U.S. officials to reach a trade deal.
Provincial and territorial leaders met with Carney, affirming a united "Team Canada" approach. Prince Edward Island Premier Rob Lantz emphasized the importance of intergovernmental cooperation. Carney also stated that Canada will continue to build and diversify its economy, regardless of the negotiation outcome, by strengthening domestic capacity and forging new trade relationships abroad.
An analysis by Desjardins estimates the tariffs will affect approximately $28 billion Canadian ($19.8 billion) in annual Canadian exports to the U.S., representing about 5% of the U.S. annual import volume from Canada. The analysis also warned that heightened uncertainty could negatively impact business confidence and investment.
Ontario, Quebec, and British Columbia are identified as the Canadian provinces that would be most affected. Ontario Premier Doug Ford urged Canada to adopt an offensive strategy and stated that Ontario has the most to lose, vowing to protect the province's interests. He also noted that any decision on imposing surcharges on electricity sales to the U.S. would depend on the progression of U.S. trade discussions.
Regarding trust in future agreements, Carney stated that any deal reached must be credible and verifiable for Canadian negotiators and premiers to consider it worthwhile.