Carney says he and Trump agreed to ramp up trade talks after latest tariff threat

Trump on Tuesday told reporters in the Oval Office that he loves the “people of Canada” but claimed the country needs the United States to survive.

“Canada’s been very, very tough on us over the years, for many years, and no other president’s done anything about it,” Trump said.

Trump added that the new tariffs are separate from his threats to hit Canada with additional levies due to wildfire smoke. He repeated his claim that Canada is not managing its forests properly.

U.S. officials say the new duties are a reply to Canada imposing targeted retaliatory tariffs in response to Trump’s duties last year. Ottawa has since rolled back many of those tariffs to smooth trade relations.

Separately, several Canadian provincial liquor boards stopped purchasing American alcohol in response to Trump’s tariffs and threats of annexation.

But the escalating tariff threat also comes as the countries continue talks on the Canada-U.S.-Mexico Agreement on trade, better known as CUSMA.

Mexico and Washington have launched official negotiations but Ottawa has not yet started trade talks with the U.S.

The Trump administration said earlier in July that it would not be renewing the trade agreement. That decision triggers rolling annual reviews for up to 10 years, at which point CUSMA would expire unless all parties agree to an extension.

Carney said Canada has made a series of comprehensive and detailed proposals on modernizing the continental trade pact in response to the Trump administration’s trade strategy.

United States Trade Representative Jamieson Greer would not provide details of those proposals Tuesday but described them as “promises to discuss these issues.”

“They talk about collaboration on energy. We’ve never had tariffs on Canadian energy. We’ve always been open to that and that kind of exploration,” Greer told CNBC.

“So the types of things that have been in these proposals have always been, ‘Let’s talk. Let’s keep trading in energy,’ things we already do, things that do not fundamentally commit to resolve these issues.”

Trade tensions with Canada aren’t new, Greer said, adding he will continue to communicate with his counterparts.

“Sometimes you take an action that leads to a better negotiation in the end,” he said. “We will see where it leads.”

The new duties are likely to rattle business confidence across the continent, which has already seen investment slow over concerns about the future of CUSMA.

Senate Finance Committee Ranking Member Ron Wyden, a Democrat for Oregon, said he will soon introduce legislation to rein in Trump and “put Congress back in the driver’s seat.”

“Trump has abused every trade authority at his disposal and he is now excavating a law from the Great Depression to once again impose vast, unilateral tariffs on products from one of our closest allies and trading partners,” Wyden said in a news release.

Greer recognized that Trump’s separate sectoral tariffs on things like steel, aluminum and automobiles have had deep impacts on industries in Mexico and Canada. He suggested there’s room for negotiation on shielding America’s closest neighbours.

“I think also if we can have an arrangement with Mexico, with Canada, that we are trying to emphasize Canadian, Mexican, U.S. content in goods traded in North America,” he said. “That’s a good outcome because that helps get supply chains back here in North America.”

Greer also signalled that separate 10 per cent tariffs could land soon.

The Trump administration in March launched trade investigations under Section 301 of the Trade Act of 1974 into 60 countries, including Canada, citing forced labour in supply chains.

The Canadian government has told the Trump administration that new legislation combating forced labour in supply chains should shield Canada from those new tariffs.

This report by The Canadian Press was first published July 21, 2026.

— By Kelly Geraldine Malone in Washington, with files from Sarah Ritchie and Kyle Duggan in Ottawa.

The Canadian Press

by The Canadian Press

Carney says he and Trump agreed to ramp up trade talks after latest tariff threat

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