Canadian businesses are once again scrambling to make sense of the latest trade announcement from U.S. President Donald Trump, who issued a letter late Thursday threatening to impose a 35 per cent tariff on Canadian imports.
One of the immediate concerns is whether goods and services currently compliant with the existing U.S.-Mexico-Canada trade agreement will remain exempt from the proposed tariffs. Some businesses are interpreting the move as a worst-case scenario as both nations work toward new trade terms ahead of a self-imposed August 1 deadline, recently extended from July 21.
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“To be frank, the future of U.S. trade policy is as clear as mud,” said Avery Shenfeld, chief economist at CIBC Capital Markets. “That’s inevitable when decisions out of the White House appear to hinge on the mood and whims of one individual, rather than a clearly defined American objective.”
Even if the letter is intended as a negotiating tactic — a view shared by some business leaders — the uncertainty it introduces remains deeply troubling.
“After months of dealing with fluctuating tariffs and threats, Canadians are well aware of the economic harm and the strain such actions put on the longstanding relationship with our southern neighbour,” said Candace Laing, CEO of the Canadian Chamber of Commerce.
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She warned that if the U.S. insists on paying more for Canadian-made products, it will be American consumers who ultimately foot the bill through higher prices and disrupted supply chains. A blanket tariff, she said, would hit Canadian manufacturers, exporters, and workers hard — amplifying the instability already affecting what has been one of the most productive trade relationships between the two countries.
Laing added that the Chamber remains hopeful both governments will continue negotiations in good faith, ideally behind closed doors, to build a strong, dependable partnership on both economic and security fronts.
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