Trump Declares U.S. Shifts Focus Away from Canada Trade Deal—What’s Next for North America?
Trade tensions flare as the U.S. sidelines Canada in latest economic strategy pivot.
Washington’s Cold Shoulder
No handshakes, no photo ops—just a blunt dismissal from the Oval Office. The message? Canada’s trade ambitions aren’t topping America’s 2025 agenda. Critics call it another volatility play in a legacy of economic whiplash.
The Unspoken Calculus
Markets barely flinched—because let’s face it, who expects consistency from this administration? But behind closed doors, Ottawa’s scrambling to recalibrate. ‘Prioritization’ is just DC-speak for leverage, and everyone’s counting the chips.
Cynical Finance Jab
Meanwhile, Wall Street hedges its bets—because nothing fuels trading volume like geopolitical uncertainty. Bonus for algo traders: another excuse to pump volatility ETFs.
Canada meets Republicans, but the White House isn’t interested
On Thursday, Canadian officials spent the day in Washington, meeting with several Republican senators, hoping to find a path forward. That same night, Commerce Secretary Howard Lutnick had a private meeting with Dominic LeBlanc, the Canadian minister responsible for U.S. trade. But despite those meetings, Trump’s Friday morning remarks made it clear the administration doesn’t share Canada’s sense of urgency.
Prime Minister Mark Carney already saw it coming. Earlier in the week, Mark told reporters that Canada won’t rush into an agreement just to meet some deadline, saying the country “will not accept a bad deal.”
He also signaled there was little hope of meeting an August 1 goal. With no pressure from the U.S. side and tariffs still biting into Canadian industries, Mark’s team is focused on trying to eliminate or reduce steep import taxes that Trump reintroduced on steel, aluminum, and cars.
Even without a new agreement, most Canadian exports still FLOW tariff-free under the U.S.-Mexico-Canada Agreement, which Trump signed during his first term. That deal remains in place, and so far, it’s kept some stability for cross-border trade. But those new tariffs have hit hard. And with Trump saying there’s nothing new on the horizon, Canadian industries are stuck in limbo.
The pressure is heavier because 75% of Canadian exports go directly to the U.S., and its auto industry is tightly linked with American factories and suppliers. The longer these tariffs stay, the worse it gets for companies trying to keep up with demand on both sides of the border.
Since May, when Mark took office, his team has been in ongoing trade and security discussions with the U.S. But nobody’s pretending this is wrapping up anytime soon. After a two-day visit to D.C., Dominic told reporters on Thursday that negotiators “have a lot of work” ahead of them. He said the conversations were “cordial” and “productive”, but Canada will take “the time necessary to get the best deal.”
Trump, meanwhile, is pushing deals with other countries. Earlier this week, he announced a trade agreement with Japan, offering them a 15% tariff rate in return for a $550 billion investment in the U.S. No such deal is being discussed with Canada, even though the two countries have one of the world’s largest bilateral trade relationships. Last year, the U.S. imported $477 billion in goods and services from Canada and exported $441 billion back.
While negotiations stall, the Bank of Canada is expected to keep its key interest rate at 2.75% during its July 30 meeting, holding steady for the third time. That’s despite a recent bump in inflation and a dip in unemployment. The central bank has already cut rates by 225 basis points since June 2024, but it’s been on pause since March 2025, waiting for some clarity on how long Trump’s tariff chaos will continue.
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