Mark Carney has said he is “disappointed” after Donald Trump hit Canada with a 35 per cent tariff on goods that aren’t covered by the Canada-US-Mexico Agreement (CUSMA).
The punitive rate has been put in place because Carney and Trump failed to arrange a new trade deal before the president’s Aug. 1 deadline.
Despite many Canadian trading partners, including the UK and EU, agreeing deals with the US, Carney said in recent days that he did not expect an agreement before Aug. 1.
In a statement released this morning, Carney said: “The US application of CUSMA means that the US average tariff rate on Canadian goods remains one of its lowest for all of its trading partners.
“Other sectors of our economy – including lumber, steel, aluminum, and automobiles – are, however, heavily impacted by US duties and tariffs. For such sectors, the Canadian government will act to protect Canadian jobs, invest in our industrial competitiveness, buy Canadian, and diversify our export markets.”
My statement on Canada-U.S. trade: pic.twitter.com/0PSG9kKtiO
— Mark Carney (@MarkJCarney) August 1, 2025
Carney also reiterated his frustration with Trump’s justification for the tariff – the illegal trade in fentanyl – emphasizing once again that Canada “accounts for only one per cent of US fentanyl imports.”
He added that his government’s priority is “building Canada strong” by being provincial economies closer together.
“Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partnerships throughout the world,” he said. “We can give ourselves more than any foreign government can ever take away by building with Canadian workers and by using Canadian resources to benefit all Canadians.”
In a “fact sheet” released on Thursday, the White House said Canada had “failed to cooperate in curbing the ongoing flood of fentanyl” into the US, and had also “retaliated against” Trump.
The president’s press team also said any goods transshipped – put through another jurisdiction – to avoid the 35 per cent tariff will instead be subject to a 40 per cent tariff.
Earlier this week, meanwhile, Trump said Carney's decision to recognize Palestine as a state in September had made it "very hard" to agree a deal with Canada.
According to RBC, among other analysts, about 90 per cent of Canadian exports to the US are covered by CUSMA, meaning only a small proportion of trade will be affected by the 35 per cent tariff.
Mexico, the other member of the trade deal, agreed to a 90-day extension on the Aug. 1 deadline on Thursday.
