Donald Trump has sent powerful signals that he is prepared to impose a much higher tariff on Canada—a full 35 percent rate—starting after August 1.…Trump’s Letter to Canadian Prime Minister Mark Carney. In it, he called attention to the growing trade antagonism—something that is causing serious alarm with Canadian policymakers and industry leaders alike. The letter addressed Canada in particular. It further provides for a 30 percent tariff on Mexico and the European Union, showcasing a more general strategy in the administration’s trade negotiations.
Carney is scheduled to meet with his cabinet on Tuesday to discuss the implications of Trump’s letters and strategize their next steps. The Prime Minister’s message has been consistent — that his government has “fiercely” defended Canadian workers and businesses during constant negotiations. This positive commitment will be sorely tested as this government prepares for the tsunami of effect these new tariffs will cause.
Unpredictable Negotiations
Fen Hampson, an international affairs professor at Carleton University, said no one knows how Trump would act during chaotic trade negotiations. He concluded that the President’s tactics would create instability for Canada. This ambiguity would be no small matter, as it would affect other countries facing similar tariff sword of democles. Hampson urged Carney to focus on substantive conversations with American officials. He cautioned Carney against falling into Trump’s baited traps.
The addition of these tariffs has implacable, real-world ramifications—hitting far more than dollar signs. They have the potential to radically change economic relationships and trade patterns between Canada, Mexico, and the European Union. Domestic pressures are increasing in the United States due to high tariff rates. In turn, in response to these growing pressures, Trump and his administration are seeking to make tactical moves that would fundamentally reshape the global trade terrain.
Government Response and Strategy
In hopes of receiving a favorable response to the President’s letters, Canada’s government is ready to prepare a suitable retaliation. The next federal-provincial cabinet meeting will allow Prime Minister Carney and his new ministers the opportunity to look hard at the file. They’ll plan ways to offset the effects of the proposed tariffs, for example. The government wants to defend Canadian interests while dealing with a complicated negotiation environment.
As the clock ticks, Canadian officials say they’ll be ready to protect their BAT as negotiations over costly economic fallout continue. Canada faces a potential 35 percent tariff on its goods. Such a scenario will make further proactive conversations with our American counterparts all the more important, which is why we’re creating this urgency.
