Canada-U.S. Trade Minister Dominic LeBlanc, pictured in June alongside Prime Minister Mark Carney, says negotiations with U.S. officials will continue after the two countries failed to reach a deal by deadline.PATRICK DOYLE/The Canadian Press
Canada-U.S. Trade Minister Dominic LeBlanc said talks with the Americans will continue over the coming weeks, after the two sides failed to reach a deal by Friday, which would have averted the imposition of 35-per-cent tariffs on some Canadian goods.
But a new deal in the short term isn’t likely, Mr. LeBlanc said in an interview with The Globe and Mail on Friday from Washington. He said he’ll be speaking to U.S. Secretary of Commerce Howard Lutnick next week, and the two will meet in person later in August.
While Canada’s ambassador to the U.S, Kirsten Hillman, will continue discussions in Washington, Mr. LeBlanc is returning to this country.
The failure to reach a deal underlines the challenge Prime Minister Mark Carney is encountering in trying to forge a new trade and security relationship with Canada’s largest partner, as he promised to do during the spring election campaign.
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The stall in talks also is occurring despite the fact that Mr. Carney in June killed Canada’s digital sales tax, which had targeted foreign tech giants such as Amazon, Google parent Alphabet, Meta, Uber and Airbnb − estimated to bring in $7.2-billion in revenue over five years − after opposition to the levy from U.S. President Donald Trump.
The Prime Minister’s Office said it could not say Friday whether Mr. Carney will follow through on his June commitment to revisit Canada’s 25-per-cent retaliatory tariffs on U.S. steel and aluminum imports.
After Mr. Trump raised U.S. tariffs on Canadian steel and aluminum to 50 per cent, Mr. Carney held off raising Canada’s retaliatory tariffs to the same rate but promised he would adjust them to “levels consistent with progress made in the broader trading agreement with the U.S.”
Trade talks were accelerated in recent weeks after a threat from Mr. Trump that he would raise “fentanyl tariffs” that he imposed on Canadian goods in March to 35 per cent from 25 per cent unless a new deal was struck by Aug. 1.
The tariffs do not apply to products that meet the rules of origin outlined in the United States-Mexico-Canada Agreement, which has allowed most Canadian exports to continue crossing the border tariff-free.
Canadian officials − including Mr. Carney’s chief of staff, and Mr. LeBlanc − have travelled to Washington numerous times in recent weeks for talks.
Mr. LeBlanc said he spent three hours at Mr. Lutnick’s residence on Tuesday evening for discussions, and in that conversation, as well as those that followed, kept learning more about what Americans are seeking from Canada.
He said what Canada takes away from the week is a much-valued continuation of the carve-out under the USMCA free-trade deal, which he wasn’t certain would happen until the White House published the official executive order imposing the higher tariffs late Thursday night.
“We leave also this week with additional insights into the conversations we’ll have over the coming weeks with them,” Mr. LeBlanc said.
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The minister also said the review of the free-trade deal − scheduled to begin in 2026 − could also start as soon as this fall. The USMCA is up for renewal next year and the Americans have said they intend to seek renegotiation of the pact.
Mr. LeBlanc would not say what the specific roadblocks were to getting a new deal with the U.S., only that Mr. Carney determined that “the right deal for the Canadian economy and Canadian workers wasn’t in sight.”
In addition to the tariffs on non-USMCA goods, the Trump administration has imposed separate levies on steel, aluminum and autos, citing the need to protect those sectors on national-security grounds.
Mr. LeBlanc said getting those tariffs lifted, when they have been imposed globally, is a challenge.
But he noted that they are having a negative impact on America, citing U.S. Treasury Secretary Scott Bessent’s comments Thursday on the pain of aluminum tariffs for U.S. automakers.
Canada is happy to talk about how to resolve those concerns, Mr. LeBlanc said.
U.S. Treasury Secretary Scott Bessent attends a press conference in Stockholm, Sweden, July 29.Magnus Lejhall/TT/Reuters
Mr. Carney had been signalling for days that a deal with a total removal of tariffs was unlikely, and earlier this week said explicitly that hitting the Aug. 1 deadline could be impossible too.
On Friday morning, he said Canada was disappointed.
“While we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser focused on what we can control: building Canada strong,” he said in a statement.
In mid-July, Mr. Carney had announced a package of supports for steel, and discussions will now take place on supports for the aluminum, auto and softwood-lumber industries, Mr. LeBlanc said.
“I think you should see over the coming weeks, the government take additional steps in other sectors to ensure that when we come through this period of uncertainty, we still have in Canada sectors of our economy that are vital to our own economic and national security,” Mr. LeBlanc said.
Brian Clow, who served as deputy chief of staff to former prime minister Justin Trudeau and was among the leading federal officials on Canada-U.S. relations, said he believes that the U.S. government is trying to make an example out of Canada by not granting it a 90-day reprieve from the higher tariffs like Mexico received.
Canada, unlike, Mexico, has imposed retaliatory tariffs on the United States. Canada is part of a very small group of countries, including China, that have responded to the United States by applying countertariffs during the scores of trade disputes that Mr. Trump has generated in recent months.
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Mr. Trump on Aug. 7 is about to impose tariffs on a host of countries that have not reached trade deals with the United States and Washington doesn’t want them to retaliate like Canada has, Mr. Clow said.
“The signal here to all those other countries is ‘when we increase your tariff on Aug. 7, don’t retaliate, otherwise, we’ll punish you like we’ve punished Canada.’”
Mr. Trump has justified the 35-per-cent tariff rate by citing a desire to push Canada and Mexico to do more to address illegal smuggling of the opioid fentanyl.
This has provided the legal grounds for Mr. Trump to impose broad-based levies on his neighbours by declaring a “national emergency” on the border.
Mr. LeBlanc did not say why Mexico received an extension to the tariff increase, but Canada didn’t.
He said his team continues to stress to Americans the steps Canada is already taking to combat fentanyl, and that the amount crossing from Canada to the U.S. is minuscule.
“I’m confident that the fentanyl justification can be worked through with the Americans,” he said.
Canada has maintained that the U.S. President’s allegations about fentanyl trafficking are false, but it has boosted spending on the border in recent months, and put a fentanyl “czar” in place.
On social media, some opposition Conservatives sharply criticized Mr. Carney, saying his government’s failure to get a deal is a failure of his campaign promise to be “elbows up” for Canada, and they accused him of wasting cross-partisan consensus in support of his agenda.
Provincial premiers, who have been largely in lockstep with Mr. Carney throughout the talks, reaffirmed that support Friday, though some urged the Prime Minister to follow through on domestic economic reforms.