Live updates: Trump boosts tariff on certain Canadian goods to 35%; Carney responds

Hamilton Spectator

2 days ago

U.S. President Donald Trump
signed an executive order to hike tariffs after Canada and the U.S. failed to reach a
trade deal
by his Aug. 1 deadline. Follow the Star's live coverage below.
Here's a look at how Trump's trade war has unfolded with Canada over the past few months. (July 27, 2025)
U.S. President Donald Trump speaks at the White House in Washington on Wednesday.
OTTAWA — U.S. President Donald Trump signed an executive order late Thursday
hiking tariffs on certain Canadian goods
to 35 per cent, with no deal materializing between Ottawa and Washington as the clock ticked towards an Aug. 1 deadline to reach a trade agreement.
A fact sheet issued by the White House confirms that tariffs on Canadian goods that don't comply
with the Canada-U.S.-Mexico Agreement (CUSMA) will jump from 25 per cent to the 35 per cent Trump threatened to impose earlier in July, if Canada failed to take further action on halting the flow of fentanyl across the border.
Most Canadian goods meet the terms dictated by CUSMA, meaning they are not hit by the tariffs, which are separate from those targeting specific sectors.
'Shortly after returning to office, President Trump declared a national emergency under the International Emergency Economic Powers Act (IEEPA) to address, among other things, the public health crisis caused by fentanyl and illicit drugs flowing across the northern border into the United States,' Thursday's fact sheet noted.
'Canada has failed to co-operate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States for the President's actions to address this unusual and extraordinary threat to the United States.'
In response, the fact sheet said, Trump 'found it necessary' to boost the tariffs.
Prime Minister Mark Carney has yet to respond to the hike, but the federal government has already introduced legislation partly aimed at stopping the cross-border flow of illicit substances, appointed a 'fentanyl czar' to curb the production and trafficking of the synthetic opioid, and mounted a $1.3-billion border plan to address the issue. While Trump claimed at the onset of the months-long trade dispute that illegal drugs were 'pouring' across its northern border, only a very minor amount of the fentanyl smuggled into the U.S. originates from Canada.
Premier Doug Ford said on X that Ottawa should 'hit back' with a 50 per cent levy on U.S. steel and aluminum.
'The increase in U.S. tariffs to 35 per cent is concerning, especially with
tariffs still in place
on steel, aluminum, autos, forestry and now copper. While Canada continues to benefit from zero tariffs on all trade that's USMCA compliant, representing over 90 per cent of our American exports, we need to do everything in our power to protect workers, businesses and communities from the impact of tariffs,'
Ford wrote.
Earlier in the day, White House Press Secretary Karoline Leavitt suggested Trump could still cut deals with countries that had not yet reached agreements by midnight.
'I do know foreign leaders are ringing his phone, realizing this deadline is a real thing for them tomorrow, and they're bringing offers to the table,' she said.
That prospect appeared increasingly dim for Canada as the day wore on, with Dominic LeBlanc, Carney's cabinet lead on Canada-U.S. trade, Carney's chief of staff Marc-André Blanchard, and Kirsten Hillman, Canada's ambassador to the U.S., holed up in Washington to seek out a deal. On Wednesday, Carney signalled it was possible negotiations would extend beyond the deadline, and called the talks 'constructive' and 'complex.'
Trump said Thursday that where Mexico was concerned, he had initiated a 90-day negotiating period following a call with Mexican President Claudia Sheinbaum, and that Mexican imports would continue to be subject to a 25 per cent tariff, along with a 25 per cent tariff on autos and a 50 per cent tariff on steel, aluminum and copper.
But the gulf between Canada and its largest trading partner appeared to widen early Thursday morning, when Trump warned that Canada's plan to recognize a state of Palestine had
marred trade talks
with Ottawa on the eve of his deadline.
By Thursday afternoon, Trump had softened his tone, telling reporters in Washington that while he 'didn't like' Canada's decision, the move was 'not a deal-breaker.'
'We haven't spoken to Canada today. He's called and we'll see,' Trump said, appearing to refer to Carney.
When asked what the holdup was with arriving at a deal with Ottawa, the president said Canada has been 'treating our country very badly for years.'
'I love Canada, have so many friends in Canada, but they've been very poorly led. They've been very, very poorly led, and all we want is fairness for our country,' Trump said.
Carney said Wednesday that Canada intends to recognize a Palestinian state in September, a pledge that is contingent on the Palestinian Authority, the governing body in the occupied West Bank, agreeing to a series of democratic reforms. The reforms include holding general elections in 2026, in which Hamas can have no role, and ensuring that a Palestinian state is demilitarized. The prime minister said Palestinian Authority President Mahmoud Abbas had agreed to the conditions.
The announcement, which followed similar declarations from France and the United Kingdom, deepened the divide between Canada and Trump, a key ally to Israel.
Trump's penchant for throwing last-minute wrenches into the works — particularly when they're not trade-related — is unprecedented, said veteran trade lawyer John Boscariol.
'Trump is not using tariffs strictly for trade purposes but instead to achieve all these other objectives, and he moves the goalposts,' said Boscariol, head of the trade law group at the law firm McCarthy Tetrault.
Trump's late-night musing about Canada's potential recognition of a Palestinian state was reminiscent of his reference to the prosecution of former Brazilian president Jair Bolsonaro in his tariff letter to Brazil.
'This makes it much more challenging for Canada's negotiators,' Boscariol said, warning that just because Mexico got an extension of the Aug. 1 deadline doesn't mean Canada will.
Flavio Volpe, the head of Canada's Automotive Parts Manufacturers' Association, said Thursday night he is still working with 'Canadian negotiators on getting the best deal for domestic interests.' He added that the tariff increase 'on a fabricated emergency premise continues to offend the interests of both Canadian and American companies trying to stay competitive against a rising Chinese hegemony.'
The president of the Canadian Chamber of Commerce, Candace Laing, called the White House's fact sheet a 'fact-less sheet.'
'The Carney government is right to prioritize a strong, future-focused deal over a rushed one,' Laing said in a statement.
'In the meantime, we have CUSMA, which, at present, is still being honoured, leaving much of our cross-border trade tariff-free. However, not all Canadian businesses have this advantage and the jump to 35% tariffs on non-CUSMA compliant products places an additional load on them.'
Earlier in the day, Catherine Cobden, CEO of the Canadian Steel Producers Association, urged negotiators to push back on the hefty tariffs on steel imports, which have already led to job losses and production slowdowns in the country.
'Hold the line. Don't accept 50 per cent,' Cobden said.
Canada's aluminum industry is also coping with the impact of 50-per-cent tariffs, and is still hopeful a deal can be reached to see them lowered.
When that will happen, however, is another matter, said Jean Simard, CEO of the Aluminum Association of Canada.
'It's impossible truly to have a deal in time for Aug. 1,' said Simard. 'What's left is either putting tariffs in, or pushing the deadline. And I think pushing the deadline is easier.'
With files from Mark Ramzy and Alex Ballingall
Deadlines aren't what they used to be. We don't yet know (as I write this, Thursday) what today's will bring but Trump has already said our tentative recognition of Palestine could make a trade resolution impossible.
What next? He demands, for reasons too obvious to state, no more dates between Justin Trudeau and Katy Perry? Instead, let's focus on our guy, Prime Minister Mark Carney.
He is either a lying hypocritical traitor or a noble change agent. The problem is less knowing which than knowing when we finally know.
Read more from Rick Salutin here.
Prime Minister Mark Carney released a statement just past midnight on Friday after U.S. President Donald Trump imposed a 35 per cent tariff on Canadian goods.
On Thursday Trump declared the rate hike on products that don't comply with the Canada-U.S.-Mexico Agreement (CUSMA).
'While the Canadian government is disappointed by this action, we remain committed to CUMSA, which is the world's second-largest free trade agreement by trading volume,' Carney's statement read.
'The U.S. application of CUSMA means that the U.S. average tariff rate on Canadian goods remains one of its lowest for all of its trading partners. Other sectors of our economy — including lumber, steel, aluminum and automobiles — are, however, heavily impacted by U.S. duties and tariffs.'
Read the full statement here.
The Canada-U.S.-Mexico Agreement (CUSMA) was negotiated during the first Trump administration to replace the North American Free Trade Agreement.
Companies can claim preferential treatment under CUSMA if they meet its rules of origin. While it is different depending on the product, generally it requires a specific amount of the goods be made of products or with labour originating from Canada, Mexico or the United States.
About 80 to 90 per cent of Canadian goods might be able to comply with CUSMA's rules of origin, said Michael Dobner, the national leader of economics and policy practice at PricewaterhouseCoopers Canada.
Read more fomr the Canadian Press here.
Canadian Foreign Affairs Minister Anita Anand listens to Canadian Prime Minister Mark Carney speak during a press conference after a cabinet meeting to discuss both trade negotiations with the U.S. and the situation in the Middle East, at the National Press Theatre in Ottawa on Wednesday.
Deadlines aren't what they used to be. We don't yet know (as I write this, Thursday) what today's will bring but Trump has already said our tentative recognition of Palestine
could make a trade resolution impossible
.
What next? He demands, for reasons too obvious to state,
no more dates between Justin Trudeau and Katy Perry
? Instead, let's focus on our guy, Prime Minister Mark Carney.
He is either a lying hypocritical traitor or a noble change agent. The problem is less knowing which than knowing when we finally know.
During his leadership run and election, he said Trump wants to break us so they can own us and that won't happen. Ne … ver.
But lately he's said we need to live with their arbitrary tariffs and pay them imperial tributes by buying whatever they say. That doesn't sound very proud and independent. In Brazil there were street celebrations for refusing to bend the knee to the U.S.
This makes Carney sound rather neo-liberal: let the free markets rule as in 19th century economics, which really means whoever has the money, sets the rules but don't worry, it will work out for everyone.
The only neo thing about neo-liberalism is it came after a long interregnum of Keynesian government interventionism, to which Carney had seemed sympathetic. On the other hand, he's a youthful 60 and as an adult has only served neo-liberal regimes like Stephen Harper's and the U.K. Tories. He knows their inadequacies well yet must feel a bit disoriented trying to head off in a very different direction.
So, we truly don't know. His buy-in to a huge bump in military spending under U.S. pressure was ominous.
Yet, consider the two main thrusts of his cave.
One is building up the navy. After the Second World, Canada had the world's third largest merchant fleet. Yet, its owners and our government destroyed it by selling it off and smashing the heroic Canadian Merchant Seamen's Union through importing a crime-ridden U.S. union. (It's described in Elaine Briere's heartbreaking documentary, 'Betrayed.') Carney's policy could amount to 'dual use,' restoring our civilian shipbuilding capacity.
The other thrust is aerospace. This recalls the destruction of the Avro Arrow program in the 1950s and obliteration of Canadian success in aerospace projects. Does Carney intend to reverse these drifts?
I don't mean to suggest he knows which side he's on. That's possible but pretty rare; politics doesn't work like that normally. Politicians find out who they are and what they're going to do when they do it. (U.S. President Barack Obama's disgraceful choice in 2008 to rescue banks but let homeowners fail is a good — well, awful — example.)
What you believe doesn't define you, it's what you do that does.
This brings us to the key deficiency in Carney's arsenal: the absence of a constituency he can resort to for advice, useful defiance, or support. The Conservatives have their base, who generally push in a neo-liberal direction. So they tend to reflexively dismantle whatever good a previous government did.
The NDP, to the extent they still exist, have a union base plus various progressive streams.
The Liberals, as usual, are an unimpressive muddle. It's a wonder they survive, though it may also be their secret ingredient. But in a crisis like this, they can neither hold a leader accountable nor have his back.
This puts us — and I say this with all the confidence of someone about to kick a hornets' nest — eerily in the situation of Cuba when the U.S. imposed its blockade decades ago. Their natural trading partner was gone with the wind and desperate to survive without bowing to the U.S. will and restoring its hideous suzerainty, they turned to the Soviet Union. Castro had been a progressive nationalist and revolutionary but hardly a Marxist-Leninist.
That's obviously not where Carney is headed. But he does recall the amiable figure Robert Redford played in 'The Candidate,' who unexpectedly wins and turns to his brilliant campaign manager asking what we do now. Neither of them has a clue.
Canadian business groups anxiously watching trade negotiations with the U.S. don't want the country to rush into a deal but say the uncertainty is weighing on their members.
The Canadian Chamber of Commerce says it feels spending a little bit more time on crafting the right deal is well worth the wait because it will deliver lasting benefits.
However, the group also feels businesses in Canada and the U.S. urgently need more certainty.
Read more from the Canadian Press here.