Liberation Day 2.0 has arrived, but Ottawa isn’t rushing to get a U.S. trade deal over the line.
Driving the news: President Trump’s deadline for a trade agreement between the U.S. and Canada has come and gone without a deal. Both Trump and Prime Minister Carney tempered expectations over the past week that a deal would come together before today.
- Trump said yesterday that Ottawa’s plan to recognize Palestine as a state would make it “very hard” to get a trade deal done.
- Meanwhile, the president extended the tariff deadline for Mexico by another 90 days, indicating that today’s cutoff isn’t as strict as Trump had previously suggested.
Catch-up: Canadian officials told Politico that negotiations have been chaotic and one-sided, with the U.S. team consistently recycling Trump’s grievances. The Americans have reportedly harped on a new topic at each meeting, including dairy quotas, border security, and restrictions on U.S. banks in Canada.
Why it matters: The ~60% of Canadian exports that aren’t compliant with the USMCA will face a 35% tariff until a trade deal is reached. The silver lining? Trade experts say the majority of Canadian exports to the U.S. could become USMCA-compliant pretty easily.
- Getting certified could offer businesses a reprieve from the lofty tariffs while negotiations continue on a new trade deal.
Zoom out: In a court case that began yesterday, the Trump administration is appealing an earlier ruling that the president overstepped his authority by imposing global tariffs. If the appeal fails, it could undermine the legal foundation of Trump’s favourite negotiating tool.—LA