Ottawa has yet to reach a deal as Trump’s tariff deadline looms
Carney’s intention to recognize a Palestinian state will complicate a new trade deal with Ottawa, the U.S. President says
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Mexico gets 90-day extension as tariff deadline for Canada looms
STEVEN CHASESENIOR PARLIAMENTARY REPORTERPUBLISHED 34 MINUTES AGOUPDATED 8 MINUTES AGO
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Vehicles are loaded onto a train car at the Kansas City Southern de Mexico rail yard in Santa Ana Tlapaltitlan, Mexico, on Tuesday.RAQUEL CUNHA/REUTERS
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Mexico has won a 90-day extension from Donald Trump’s threat to increase tariffs while Canada is so far still bound to an Aug. 1 deadline, with no deal in sight.
The U.S. President, a big supporter of Israel, also on Thursday broadcast his dissatisfaction with Prime Minister Mark Carney’s plan to recognize Palestine as a state, saying this could derail a new trade deal with Canada.
Both Canada and Mexico have preferential access to the U.S. market through the United States-Mexico-Canada Agreement, and Mr. Trump earlier this year said if he can’t reach new trade deal with both he would hike tariffs that apply to most Canadian and Mexican goods to 35 per cent from 25 per cent.
Both Mr. Trump and Mr. Carney have previously warned they think the chances are slim of a trade deal by Aug. 1 that would end the Canada-U.S. trade war.
Explainer: What are the current tariffs between Canada and the U.S.?
Mr. Trump announced on Thursday he had agreed with Mexican President Claudia Sheinbaum to extend an existing trade arrangement with Mexico for 90 days and continue talks over that period with the goal of signing a new deal.
“Mexico will continue to pay a 25% Fentanyl Tariff, 25% Tariff on Cars, and 50% Tariff on Steel, Aluminum, and Copper. Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many,” Trump said in a Truth Social post.
He also voiced opposition to Mr. Carney’s plan to recognize Palestine as a state this September, contingent on reforms by the Palestinian Authority. This included a promise by its president, Mahmoud Abbas, to hold general elections in 2026 in which Hamas would be unable to take part, and to demilitarize the Palestinian state.
In another post on Truth Social, Mr. Trump wrote: “Wow! Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”
On Wednesday, the Canadian Prime Minister said trade talks with Washington have been constructive and Canada’s negotiators will remain in Washington past Mr. Trump’s Friday deadline if they fail to reach a deal by then.
Carney says Canada’s negotiators will stay at the table if trade deal with U.S. not reached by Friday
Negotiations in Washington are continuing. The Prime Minister’s chief of staff Marc-André Blanchard remains there with Intergovernmental Affairs Minister Dominic LeBlanc.
Mr. Carney also opened the door to the possibility a deal might include a commitment by Canada to buy U.S. goods or make investments in the United States.
“We’re seeking the best deal for Canadians. We have not yet reached that deal. Negotiations will continue until we do,” the Prime Minister said.
On Wednesday, he was asked whether a Canada-U.S. agreement might include a pledge to buy U.S. products or military goods like the commitment in the U.S.-European Union deal announced Sunday.
He did not rule this out, and in his reply he suggested such a purchasing or investment pledge would not be hard to reach.
“Could our accord with the United States include commitments on investments and other aspects?” he said. He observed “there are many areas for co-operation between Canada and the United States, including defence spending, security spending, investments, which is one of the reasons why we’re having these broader discussions.”
The EU’s trade deal with the U.S. isn’t a blueprint for Canada, Carney says
A source familiar with the Canada-U.S. negotiations said they do not resemble past trade talks with the United States where groups of experts sit at tables talking through technical matters to produce voluminous deals such as the United States-Canada-Mexico Agreement.
What’s transpiring is more a political-level discussion akin to hammering out the terms for a business deal than a traditional international treaty-making process, the source said. The details would be worked out later, they said.
The Globe and Mail is not identifying the source who was not authorized to discuss the negotiations.
The source disputed the notion that the talks between the Canadians and Americans are chaotic, but said the U.S. President has at times during negotiations raised the bar for what he is asking of Canada.
Since returning to office earlier this year, Mr. Trump has hit Canada with a string of tariffs: 50 per cent on steel and aluminum; 25 per cent on the non-U.S. content of autos; and 25 per cent on any goods traded outside the USMCA with the exception of oil, gas and potash, at 10 per cent.
Bessent indicates U.S. willing to work with Canada on metals tariffs
Mr. Carney did not directly answer a question Wednesday about whether Canada would accept a deal like the EU that leaves a baseline tariff in place.
But he suggested in the clearest terms yet that tariffs Mr. Trump has imposed and justified on the grounds of national security – known as the 232 authority – are likely to remain.
Those include tariffs on steel and aluminum.
“The revealed approach of the United States in all those sectors has been to have tariffs, some base-level tariffs.”
He added later: “I think we have to recognize in the strategic sectors, again as defined by the United States, what’s strategic to them, that they have tariffs.”
On Sunday, the European Union became the latest U.S. trade partner to reach an agreement with Mr. Trump that locks it into higher tariffs to avoid worse threats from the protectionist President.
The EU accepted a broad-based 15-per-cent tariff, with carve-outs for certain industries, and agreed to purchase US$750-billion worth of U.S. energy and invest around US$600-billion in the United States. The agreement left tariffs of 50 per cent on steel and aluminum in place – although EU officials suggested there may be quotas that lower the tariff rate on the metals.
With reports from Reuters
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