Talks ramp up as July 21 deadline approaches and Trump's new import taxes loom
Canada and the United States are racing against the clock to finalize a trade and security agreement before a looming July 21 deadline, and a former US official says both sides are focused on making sure the deal is “sustainable.”
Recent weeks have seen fraught exchanges in those talks, with US president Donald Trump briefly withdrawing from discussions over Canada's planned imposition of a digital services tax. Days later, negotiations were back on after Canada agreed to shelve that measure.
Now, both countries are approaching the talks with a sense of urgency, former White House Economic Counsel and official at the US Trade Representative (USTR) Brian Janovitz told Global News.
“It makes it so that all of the parties have an interest in building something that's sustainable long-term,” Janovitz said. “It sort of works for everybody.”
He added that the negotiations are also accelerating the Canada-US-Mexico Free Trade Agreement (CUSMA) review talks, which are officially scheduled for 2026.
Read more: Canada on edge as Trump trade deadline looms
For Canada, the stakes are especially high. Experts have warned that if trade tensions escalate, the impact could reach far beyond the factory floor.
Frances Donald, chief economist at RBC, said this year that Trump’s original tariff push “the most significant trade shock since the Smoot-Hawley tariffs of the 1930s.” And back in April, Bank of Canada Governor Tiff Macklem said a deepening trade war could lead to “one of the most significant economic shocks in over a century.”
The central bank has left its benchmark rate on hold in recent months as it waits to see how Trump's tariffs impact the Canadian economy, although it's expected to resume cutting borrowing costs before the end of the year if the president's trade measures start to weigh against economic growth.
While a total collapse in Canada's housing market isn’t expected, the Canada Mortgage and Housing Corporation (CMHC) has already outlined how even moderate fallout from a trade war could strain the housing market, signaling risks ahead for mortgage professionals and homebuyers alike.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
