ByREUTERS

JULY 24, 2026 05:51

Canada stands prepared to take all necessary steps to protect its position in any trade conflict with the United States, including targeted retaliatory steps, Prime Minister Mark Carney informed provincial premiers on Thursday following Washington's latest tariff announcements.

President Donald Trump revealed on Monday fresh 50 percent duties on multiple Canadian goods scheduled to begin August 19.

Carney stated that Ottawa is stepping up trade discussions with Washington and will act firmly to safeguard national interests if required, calling the American actions unjustified.

He added that all options remain available should talks fail to produce results, though he offered no concrete details on possible responses.

Trump and Carney this week committed to accelerating bilateral negotiations amid the president's July 1 choice not to extend the USMCA pact for an additional 16 years, leaving the deal active but subject to yearly reviews.

Washington is pursuing separate talks with each neighbor and reports greater headway with Mexico, which could pressure Canada to accept similar concessions.

Carney stressed his preference for a broad agreement covering multiple areas instead of narrow sector-by-sector arrangements.

Despite public unity among leaders, the provinces differ on tactics. Alberta and Saskatchewan, major exporters of oil and potash, have rejected any limits or levies on shipments to the US market.

Ontario Premier Doug Ford urged matching US tariffs exactly while noting Carney faces a challenging situation.

Ford observed that relations can shift quickly, with Trump sometimes turning sharply against allies.

British Columbia Premier David Eby proposed restricting US access to key mineral exports such as copper, zinc and aluminum if needed.

He affirmed readiness to supply strong leverage if requested by the prime minister.

US Targets Interim Trade Arrangements with Canada and Mexico by Year End

US Trade Representative Jamieson Greer indicated on Wednesday that he aims to finalize limited trade arrangements with both Mexico and Canada before December while deferring deeper USMCA revisions until 2027.

Greer told a Senate Finance Committee hearing that he would like at least one arrangement with each country in place by year's end.

Topics such as stricter auto origin rules plus labor and environmental standards may need extended talks and congressional input next year.

His remarks made clear that a complete overhaul of the six-year-old pact will extend into the following year, sustaining uncertainty for businesses and investors.

Mexico's Economy Ministry offered no immediate reaction to the statements.

A spokesperson for Canadian trade minister Dominic LeBlanc confirmed a Tuesday conversation between the minister and Greer following the leaders' agreement to advance talks.

The minister looks forward to continued discussions that benefit citizens on both sides, the spokesperson added.

Greer noted the US is advancing potential interim deals rapidly to give Trump, Mexican President Claudia Sheinbaum and Carney options by December, without detailing their form.

Analyst Michael Camunez observed that the testimony shows the US has abandoned plans for a straightforward USMCA renewal this year.

An interim political accord appears likely, keeping talks alive yet leaving major issues and investment doubts unresolved.

Calls for Tariff Relief

USMCA and its predecessor NAFTA have shaped North American commerce for 32 years, supporting nearly 1.6 trillion dollars in duty-free regional trade, with most Mexican and Canadian exports directed to the United States.

Trump last year introduced Section 232 national security tariffs of 25 percent on autos and 50 percent on steel and aluminum from both neighbors, measures from which they now seek relief.

Former Mexican trade official Luis de la Calle suggested that removing the 232 duties would be a logical starting point for any interim deal with Mexico.

Relations between Canadian and US officials have grown strained, highlighted by Trump's recent 50 percent tariff on roughly 20 billion dollars of Canadian products including beer, dairy and hockey sticks in response to Ottawa's countermeasures on autos and metals.

Greer traveled to Mexico City on Tuesday for bilateral discussions on USMCA changes. Canada remains outside these talks, increasing the chance it may inherit terms negotiated by Mexico.

The Trump administration seeks higher regional content requirements for North American vehicles to qualify for preferential access, aiming to boost US production and limit Chinese components.

Mexico shares these objectives but differs on implementation and has prioritized reductions in US tariffs on autos, steel and aluminum.

Trump Warns of Pact Termination

Trump has repeatedly criticized the USMCA he signed in 2020, citing ongoing US trade deficits with Mexico and Canada as reasons for possible termination.

On July 1 he declined to renew the agreement, initiating a 10-year countdown to expiration unless all parties approve revisions.

Greer informed senators that non-trade matters, including tighter Mexican border security and compliance with a 1944 water treaty for Texas farmers, may need resolution before Trump accepts any interim deal.

The president will struggle to support renewal or revisions if Mexico fails to cooperate across all fronts, with the water treaty cited as one key example, Greer said.