Prime Minister Mark Carney is set to meet with his cabinet on Tuesday following U.S. President Donald Trump’s latest declaration that a 35 per cent tariff threat against Canada is not a negotiation tactic—but the deal itself.
Speaking from the Oval Office on Monday, Trump responded to questions about trade discussions, saying the tariff letters he’s sent to world leaders—including Carney—represent final offers.
“The deals are already made. The letters are the deals,” Trump told reporters during a meeting with NATO Secretary-General Mark Rutte. “They would like to do a different kind of deal, and we’re always open to talking—but the deals are made.”
The letter sent to Carney last week warned of a 35 per cent tariff set to take effect August 1. The White House has since clarified that the tariff would not apply to goods compliant with the Canada-U.S.-Mexico Agreement (CUSMA), but there remains no explanation why Canada’s proposed rate is higher than the 30 per cent tariffs threatened against Mexico and the European Union.
Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University, called the decision “baffling.” “Canada is a top trade and national security partner. Why are they being hit harder than Mexico?” he asked, adding that Carney has so far gone “the extra mile” to maintain goodwill with Trump but may soon run out of domestic political capital to do so.
The tariff dispute comes amid ongoing talks between Canada and the U.S. over what has been described as a new economic and security pact. Carney and Trump set a deadline of July 21 during the G7 summit, but Trump unilaterally extended that to August 1.
In June, Trump raised tariffs on Canadian steel and aluminum from 25 to 50 per cent. Carney has held off retaliating, instead introducing policies to shield domestic industries. Most recently, Canada implemented new procurement restrictions to block companies from countries that limit Canadian access to their own public contracts. Procurement Minister Joël Lightbound said the policy aims to prioritize bids from Canadian firms and “reliable trading partners.”
Carney is also expected to meet with Canada’s provincial premiers next week as tensions rise over Trump’s protectionist push.
International affairs expert Fen Hampson of Carleton University urged caution. “Canada must remain calm and focused,” he said. “We can’t take Trump’s bait. He thrives on confrontation, but Canada wins by staying disciplined.”
Hampson emphasized the structural imbalance in Canada-U.S. trade, noting that while Canada mainly exports commodities and intermediate goods, U.S. industries are not immune to pain. “The 50 per cent aluminum tariffs are already causing blowback for American manufacturers. That’s where pressure on Trump could build,” he said.
Trump has revived old justifications for the tariffs, including concerns about fentanyl smuggling and border security. However, data from U.S. Customs and Border Protection shows a vast disparity: only 26 kilograms of fentanyl have been seized at the Canadian border so far this fiscal year, compared to 3,700 kilograms at the Mexican border.
As political pressure grows in both countries, Carney’s next moves could determine whether Canada responds with retaliation—or patience. Either way, the clock is ticking.