A deal wasn't signed between Canada and the United States on before the August 1 deadline, and President Donald Trump announced new 35% tariffs on exports. Canada's response is to focus on internal trade, continue to negotiate and find ways to become less reliant on the US.Prime Minister Mark Carney issued a statement Friday responding to Trump’s announcement, which was made on Thursday. In the statement, he said the top priority is to build a strong Canadian economy through cutting down internal trade barriers and using the country’s resources to benefit all residents.“While we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser-focused on what we can control: Building Canada strong,” Carney said.“Canadians will be our best customer, creating more well-paid careers at home, as we strengthen and diversify our trading partnerships throughout the world. We can give ourselves more than any foreign government can ever take away.”Though Trump’s newest tariff announcement excludes all products under the Canada-US-Mexico trade agreement (CUSMA), the decision is disappointing, said Carney..Economist says Canada-US trade deal needs fresh perspective.“We remain committed to CUSMA, which is the world’s second-largest free trade agreement by trading volume,” 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.”Meanwhile, Alberta Premier Danielle Smith issued a statement expressing disappointment in the latest tariffs, stressing the importance of building a strong Canadian economy, while continuing to negotiate with the US.“One thing is abundantly clear: Canada must become economically stronger. The federal government must immediately repeal the Trudeau-era laws that restrict resource development and are holding our economy back, and diversify and grow our export markets. This new Liberal government has yet to do so, and it is costing Canada tens of millions in lost economic activity every single day," she said.Conservative leader Pierre Poilievre also issued a statement Friday, pushing for zero tariffs on Canadian exports.“Conservatives share Canadians' disappointment that a deal with the United States was not reached by the August 1st deadline. Canada faces more U.S. tariffs than ever before, and we stand united with all workers facing devastation from unjustified tariffs on steel, aluminum, softwood, auto and agriculture. These deeply misguided policies will hurt families and businesses on both sides of the border," Poilievre said.Economics professor Moshe Lander told the Western Standard a free trade system is the best system.“There's probably some misunderstanding among Canadians as to what exactly does CUSMA-compliant or non-CUSMA-compliant mean? I thought we had a free trade agreement. Isn't everything CUSMA compliant? And the answer to that is no,” Lander said.“Producers have a choice that if they want to produce products that don't have a certain amount of North American content, or if they want to produce products that are produced offshore and pass through Canada on their way to the final customer, they can choose to pay a tariff rather than be part of the free trade framework. What's happened then is that the Trump administration has said where that original tariff might have been, say, 5% on non-CUSMA-compliant, it was escalated to 25 and now 35%, and of course, there's certain sectors that he's just targeting.”.Canada's inflation rate rose to 1.9% in June as prices of cars, clothes rise.Trump blames the tariffs on fentanyl and migrant smuggling. Carney said in the statement they will continue to work with the US to put an end to the fentanyl issue and save lives on both sides of the border, noting that Canada accounts for only 1% of US fentanyl imports.Lander said the newly announced tariffs are not surprising, noting that they were coming anyway, whether there’s a fentanyl problem or not, and whether Carney had announced recognizing Palestine as a state or not. On the bright side, CUSMA remains in place, proving the notion of "no deal is better than a bad deal."According to Lander, the tariffs will have negative implications on the economy, something we have already started to see with the inflation rate reaching 1.9% and lower GDP levels in May. Therefore, the cost of living, over time, is eventually going to rise.According to Lander, the path forward is that “team Canada remains united.”Earlier this week, Carney’s team reached out to former prime minister Stephen Harper, asking for advice ahead of the August 1 deadline. Harper’s advice was to look for markets outside the US. Mount Royal University political science professor Lori Williams told the Western Standard that it’s important for the two parties to be on the same page, citing Trump’s unpredictability..Bank of Canada holds key interest rate at 2.75%, citing tariffs, inflation, unpredictability.“It's partly important because it gives that perception of being less partisan, being open to working with people who are associated with different parties, and I think there's just an appetite amongst Canadians to have their elected leaders, regardless of ideology or political party, to work together to try to solve the problems that Canadians are struggling with, and this is becoming more and more concerning,” Williams said.“The economic impacts of what's going on are very disturbing, and so working across those, you know, historical division lines, I think is wise, but it's also reassuring to Canadians who have less concern about partisanship than they do for people working to find solutions to these very real problems.”.Trump says Canada-US trade talk deadline will not be extended .“Conservatives call for policies to take back control of our economic future by breaking our dependence on the U.S. We call on the Liberals to repeal their anti-development laws, and cut taxes on work, energy, investment and home building to make our economy strong, self-reliant and sovereign. We will always put Canada first by working with all parties to get a deal that ends the tariffs and protects our sovereignty.”
