Canadian business leaders demand tariff-free deal in US trade talks
4 Min Read
Canadian business leaders urge Ottawa to secure a tariff-free deal with the US as Trump's new trade barriers hit steel, aluminum, and small businesses hard.
-
Canada's Prime Minister Mark Carney talks with President Donald Trump before a group photo at the G7 Summit, Monday, June 16, 2025, in Kananaskis, Canada (AP)
Canadian business leaders say that any trade agreement with the United States must include tariff-free access for most goods, warning that without such provisions, the negotiations will be deemed a failure, according to a report published by The Canadian Press on Tuesday.
The concerns come in the wake of escalating trade tensions, with US President Donald Trump announcing in early July a 35% tariff on Canadian goods set to take effect August 1. The White House has also confirmed that earlier sector-specific tariffs will remain in place. Additionally, the US doubled its tariffs on steel and aluminum imports from Canada to 50% as of June 4, and any goods that fail to meet the standards of the United States-Mexico-Canada Agreement (USMCA) are now subject to a 25% duty.
Dan Kelly, president of the Canadian Federation of Independent Business, said that for talks to be considered a success, “a good chunk” of bilateral trade must be exempt from tariffs. Kelly warned that if Ottawa accepts a deal similar to the one signed between Washington and Brussels over the weekend, it would not be seen as a win for Canada.
No clear path to tariff-free agreement, says PM Carney
Small businesses are reportedly bearing the brunt of the trade dispute, with many struggling under the weight of retaliatory tariffs imposed by Canada in response to US measures. Business owners argue that these countermeasures, while politically symbolic, are proving more damaging domestically than the original US restrictions.
Canadian Prime Minister Mark Carney acknowledged in mid-July that progress in the negotiations remained limited. He noted that several critical sectors, including steel, aluminum, automotive, pharmaceuticals, and lumber, continue to face major hurdles, making a fully tariff-free deal unlikely in the short term.
Carney added that Ottawa was currently weighing whether to implement additional retaliatory tariffs on US goods, though many within Canada’s business community argue that such moves would further strain local industries rather than influence Washington’s stance.
Trump signals bleak outlook for trade deal
On Friday, President Trump expressed skepticism over the negotiations, stating that the US “hasn’t had a lot of luck” with Canada in recent talks. He warned that Ottawa may ultimately walk away empty-handed and be forced to pay steep tariffs without the shelter of a new agreement.
A contentious trade agreement between the US and EU, finalized at Donald Trump’s Scottish golf resort, has drawn sharp rebuke from France and German industry groups. While the deal averts steeper tariffs, critics say it imposes unfair burdens on European exporters and marks a troubling shift in transatlantic relations.
The new US-EU trade agreement, sealed on Sunday in a ballroom at Trump’s golf resort in Scotland, introduces a 15% tariff on nearly all European exports to the US, including automobiles. While the deal averts Trump’s looming August 1 deadline that threatened a 30% tariff hike, it falls short of the zero-tariff trade framework initially proposed by the EU.
The accord subjects EU exporters to significantly higher duties, replacing the current average tariff of 4.8% with rates more than triple in some sectors. Negotiations are still ongoing regarding steel, which remains under a 50% tariff, as well as aviation and pharmaceutical exports, which face continued uncertainty.
EU leaders defend trade deal
Despite the backlash, several EU leaders defended the agreement, emphasizing the importance of avoiding further trade escalation with Washington.
German Chancellor Friedrich Merz described the outcome as pragmatic, warning that a no-deal scenario would have disproportionately harmed Germany’s export-driven economy.
Similarly, Italian Prime Minister Giorgia Meloni characterized the pact as “sustainable,” praising its potential to bring long-needed predictability to transatlantic commerce.
Germany’s far-right Alternative für Deutschland (AfD) party head Alice Weidel and French nationalist figure Marine Le Pen, however, both characterized the deal as lopsided and harmful to European economic interests.
But criticism was not limited to the far right. Centrist French Prime Minister François Bayrou also condemned the deal on X, writing, “It is a dark day when an alliance of free peoples, united to assert their values and defend their interests, resigns itself to submission.”
