Financial markets closely watching developments, but trade deal still looks some way off
Prime minister Mark Carney spoke with US president Donald Trump by phone Thursday, marking the first direct conversation between the two leaders since Ottawa and Washington missed a self-imposed deadline to finalize a new trade pact earlier this month.
According to a readout from the Prime Minister’s Office (PMO), the leaders discussed “current trade challenges, opportunities and shared priorities” in what officials described as a “productive and wide-ranging conversation.”
Trade deal remains elusive
Canada and the US have been locked in a trade dispute since Trump imposed sweeping tariffs on Canadian goods earlier this year. The levies, which he raised to 35% on August 1, apply to nearly all Canadian exports that do not comply with the Canada-US-Mexico Agreement (CUSMA). The White House said the measures were intended to combat drug smuggling across the border.
Carney said he was “disappointed” by the tariff hike, stressing that Canada remains committed to CUSMA, which he described as “the world’s second-largest free trade agreement by trading volume,” according to Global News.
Despite those assurances, efforts to reach a new economic and security pact have faltered. At the G7 summit hosted in Alberta earlier this summer, Carney and Trump agreed to conclude negotiations by late July, later shifting the deadline to August 1. The deadline passed without resolution.
Trade minister Dominic LeBlanc told reporters the government was unwilling to sign “just any agreement.” He said Ottawa would only accept a deal that protects Canadian workers and industries.
US pressure mounts
The United States has also targeted specific sectors. Canadian steel and aluminium face a 50% tariff, while automobiles carry a 25% levy, a Wall Street Journal report noted. Washington has argued Ottawa’s retaliatory measures threaten the integrity of the US-Mexico-Canada trade treaty.
Last week, US envoy Pete Hoekstra warned that Canada’s counter-tariffs and restrictions on US goods could jeopardize future cooperation under USMCA.
Trump has repeatedly criticized Canada’s supply-management system for dairy and other agricultural products, framing it as a barrier to American exporters.
Security and Ukraine on agenda
Beyond trade, Carney raised the possibility of forging a broader economic and security relationship with Washington. The PMO said the leaders also spoke about building on Trump’s leadership to support long-term peace and security for Ukraine and Europe.
The call followed foreign affairs minister Anita Anand’s meeting in Washington with US secretary of state Marco Rubio. The pair discussed Ukraine and Western security guarantees, as Kyiv continues to face Russian aggression.
A spokesperson for Carney confirmed to media that Ottawa initiated Thursday’s call. The leaders agreed to “reconvene shortly” for further discussions.
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