Markets 
Weather 
Prime Minister Mark Carney says he is “disappointed” by U.S. President Donald Trump’s imposition of a 35 per cent tariff on Canada but that even with that move, Canada still faces among the lowest average tariff rates of U.S. trading partners because of CUSMA.
“While the Canadian government is disappointed by this action, we remain committed to CUSMA, which is the world’s second-largest free trade agreement by trading volume,” Carney wrote in a letter posted on X early Friday.
“The U.S. application of CUSMA means that the U.S. average tariff rate on Canadian goods remains one of its lowest for all of its trading partners.”
Carney cautioned that other sectors remain heavily impacted due to industry-specific tariffs, including on lumber, steel, aluminum and automobiles.
“For such sectors, the Canadian government will act to protect Canadian jobs, invest in our industrial competitiveness, buy Canadian, and diversify our export markets,” Carney wrote.
The letter was posted just hours after Trump signed an executive order that would raise his tariffs on Canada to 35 per cent starting midnight Friday.
The White House confirmed that goods under the Canada-U.S.-Mexico agreement (CUSMA) on free trade will remain exempt from the higher tariff.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
The White House added that goods transshipped through other countries to avoid the 35 per cent tariff will instead be charged a tariff of 40 per cent.
Canada-U.S. Trade Minister Dominic LeBlanc is in Washington, D.C., this week for ongoing negotiations. His office declined to share an update on those talks when asked by Global News on Thursday.
The Prime Minister’s Office also declined to comment when asked if Carney had reached out to Trump or the White House this week.
Trump, in an interview with NBC News on Thursday after announcing new rates for his reciprocal tariffs, said that even though the duties would stay in place, “it doesn’t mean that somebody doesn’t come along in four weeks and say we can make some kind of a deal.”
The 35 per cent tariff is an increase from the 25 per cent duty that was levied by Trump earlier this year over what he has described as opioid trafficking and border security issues with Canada.
Trump has long contended that Canada has failed to combat the flow of fentanyl across the two countries’ shared border. But in the months since the tariff was imposed, Canada has boosted border security and hired a fentanyl czar to oversee its federal strategy against the deadly opioid.
Carney defended Canada’s efforts in his letter, saying the country has made “historic investments” and would continue to work with the U.S. to stop the “scourge of fentanyl.”
“The United States has justified its most recent trade action on the basis of the cross-broder flow of fentanyl, despite the fact that Canada accounts for only one per cent of U.S. fentanyl imports and has been working intensively to further reduce these volumes,” the prime minister wrote.
The number cited by Carney is backed by annual drug seizure statistics from the U.S. Customs and Border Protection agency, which shows that while about one per cent of all fentanyl seized at U.S. borders comes from Canada, the vast majority comes from Mexico.
Seizures did, however, shoot up to 11 and 14 kilograms in April and May, respectively, but dropped to one kilogram in June.
The prime minister went on in his letter to reiterate comments he’s made in recent weeks that the federal government would continue to negotiate with the U.S., but would focus on “building Canada strong.”
He cited work by Ottawa and the provincial and territorial governments to cut interprovincial trade barriers, and plans for “nation-building projects” — two key goals of the Liberal government since it was re-elected in April.
“Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partners throughout the world,” Carney said.
Trump raised new concerns about whether a trade deal would be made with Canada when he said Canada’s decision to recognize a Palestinian state would make it “very hard” to reach an agreement. He later said on Thursday that the decision was “not a dealbreaker,” but when asked about the talks, said, “We’ll see.”
— with files from Global News’ Sean Boynton and The Associated Press
Read the full article here
