Canada pauses new tariff threats as Trump escalates

OTTAWA — Canada is delaying its plans to slap retaliatory tariffs on U.S. steel and aluminum after President Donald Trump sent a letter extending the deadline for trade negotiations between the two North American neighbors — though he also threatened to impose higher tariffs.

Mark Carney’s government was preparing to double its countertariffs on U.S. metals on July 21 — to 50 percent from 25 — but Trump’s letter has moved the prime minister off that target.

Two senior government officials told POLITICO that Canada will not further retaliate against U.S. steel and aluminum on July 21, the previous deadline for the talks, after the two sides agreed to extend their negotiation deadline around a new economic and security deal to Aug. 1.

Canada’s current 25 percent countertariff on U.S. steel and aluminum will remain in place during the negotiations. But if a deal is not reached by the new deadline, both sides are threatening to raise and expand their duties on the other’s goods.

In a letter addressed to Carney on Thursday, Trump wrote that Canadian goods imported into the U.S. could face a blanket 35 percent tariff starting next month. A White House official, granted anonymity to discuss the negotiations, said the administration plans to impose the tariff only on goods that do not comply with the 2020 USMCA, though the ultimate details will be up to Trump to decide.

Trump doubled tariffs on all steel and aluminum imports entering the U.S. to 50 percent in June, but Ottawa has yet to match the move — despite pressure from the steel industry, labor unions and Ontario Premier Doug Ford.

“Everything is pushed back to Aug. 1,” said one official, who was granted anonymity to speak candidly.

Trump and Carney didn’t speak Thursday, the prime minister’s office said, but high-ranking officials from both sides met that day, before Trump posted the letter. Unlike other countries, Canadian officials did not appear rattled by the letter. The prime minister remained on vacation in the Ottawa region.

“On we go!” a Canadian diplomat, who was granted anonymity, told POLITICO. Speaking to reporters Friday, Trump noted his trade letter to Carney “was sent yesterday. They called. I think it was fairly well-received. So, we’ll see what happens.”

This is the second time the deadline for the U.S.-Canada talks has moved. The leaders agreed to a July 16 deadline during the G7 Leaders’ Summit but later moved that to July 21.

Carney said Canada will work toward the revised deadline.

“Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses,” Carney said on X.

Carney will meet with his Cabinet on Tuesday to discuss the negotiations, and on July 22 he will meet with Canada’s premiers.

“In the face of President Trump’s latest threat, we need to come together. We need a plan on how Canada will respond and how we’ll protect our workers, businesses and communities,” Ford said on the social media site X.

Trump justified the latest threat to increase tariffs by pointing to fentanyl trafficking — even though America’s own data shows that less than 0.1 percent of fentanyl seized by U.S. authorities was at the Canada-U.S. border. He also railed against Canada’s tariffs on U.S. dairy — which are levied only if U.S. dairy exports exceed a predetermined quota. “Frustratingly, the U.S. has never gotten close to exceeding” the quotas, the International Dairy Foods Association said in March.

British Columbia Premier David Eby called Trump’s letter “flailing and factually incorrect.”

“Other F words come to mind,” Eby said on X. “Just one more reminder of why Canadians need to come together, to grow our economy and stand strong.”

Ari Hawkins contributed to this report from Washington.