{"id":61808,"date":"2025-07-11T17:52:36","date_gmt":"2025-07-11T17:52:36","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/07\/11\/trumps-new-tariff-threat-hikes-uncertainty-for-canadian-businesses\/"},"modified":"2025-07-11T17:52:36","modified_gmt":"2025-07-11T17:52:36","slug":"trumps-new-tariff-threat-hikes-uncertainty-for-canadian-businesses","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/07\/11\/trumps-new-tariff-threat-hikes-uncertainty-for-canadian-businesses\/","title":{"rendered":"Trump&#039;s new tariff threat hikes uncertainty for Canadian businesses"},"content":{"rendered":"<p> \n<br \/><img decoding=\"async\" alt=\"U.S. president Donald Trump sent a letter late Thursday threatening Canadian imports with a 35 per cent tariff.\n\" data-has-syndication-rights=\"1\" data-license-id=\"3885319\" data-portal-copyright=\"ANDREW CABALLERO-REYNOLDS\/AFP via Getty Images\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/donald-trump-0711-ph-1.jpg\" title=\"U.S. president Donald Trump sent a letter late Thursday threatening Canadian imports with a 35 per cent tariff.\n\" \/><br \/>\n<iframe loading=\"lazy\" title=\"Trump&#039;s new tariff on copper called &#039;inexplicable&#039;\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/JTscQbsmnT4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><br \/>\n<\/iframe><\/p>\n<p> Canadian businesses are once again scrambling, trying to interpret the latest trade edict from U.S. president Donald Trump, who sent a letter late Thursday threatening <\/p>\n<p>                        Canadian imports with a 35 per cent tariff. <\/p>\n<p> Among the immediate questions was whether a raft of goods and services that are compliant with the existing trade deal with Mexico and the United States will remain exempt from new tariffs, with some businesses interpreting the latest edict as a worst-case scenario as the two countries negotiate to agree to new trade terms by a self-imposed deadline of Aug. 1 (extended from July 21). <\/p>\n<p> \u201cTo be frank, the future of U.S. trade policy is as clear as mud,\u201d said Avery Shenfeld, chief economist at CIBC Capital Markets. \u201cThat\u2019s inevitable when White House decisions seem to be based on the whims, and mood, of one particular man, and when it\u2019s hard to ascribe changes to a well-articulated American objective.\u201d <\/p>\n<p> Even if the threat is a negotiating tactic by Trump, as some business decision-makers believe, the uncertainty it brings is nevertheless a big concern. <\/p>\n<p> \u201cHaving spent months under on-again, off-again tariffs and threats, Canadians already know just how damaging this can be \u2014 both to our economy and the relationship we\u2019ve enjoyed with our southern neighbour for decades,\u201d said Candace Laing, chief executive of the Canadian Chamber of Commerce. <\/p>\n<p> \u201cIf the U.S. chooses to pay more for the products they already buy from us, it will be Americans who will bear the final cost, through inflated prices and disrupted supply chains. Meanwhile, the imposition of a blanket-rate tariff on Canadian goods will hit our manufacturers, exporters and workers, further elevating the uncertainty that is damaging the most productive trade relationship our two countries have ever had.\u201d <\/p>\n<p> She said the business association is hopeful that the two governments will continue talks in good faith and behind closed doors to reach \u201ca real and reliable\u201d economic and security relationship. <\/p>\n<p> \u201cOnly this will benefit businesses and workers in both countries,\u201d Laing said. <\/p>\n<p> Dennis Darby, chief executive of Canadian Manufacturers &#038; Exporters, said the latest threat from the U.S. to increase tariffs is further undermining stability for manufacturers, workers, and cross-border supply chains in Canada and the United States. <\/p>\n<p> \u201cThis unjustified threat creates more uncertainty for the very job creators in both countries\u00a0who drive our shared economic prosperity,\u201d he said in a statement. <\/p>\n<p> He referred to the development as a \u201csetback\u201d and said it raises serious\u00a0doubts about the U.S. administration\u2019s ability to negotiate in good faith. <\/p>\n<p> \u201cAn agreement is urgently needed to remove the needless costs and instability being imposed on our integrated manufacturing sectors,\u201d Darby said. <\/p>\n<div class=\"x_elementToProof\">In a statement, the Ontario Chamber of Commerce said the business community in the province is deeply concerned by the prospect of higher tariffs.<\/div>\n<div class=\"x_elementToProof\"><\/div>\n<div class=\"x_elementToProof\">\u201cThis move, signalling\u00a0increased trade uncertainty amidst ongoing negotiations, is profoundly disappointing,\u201d the Ontario business group said, likening tariffs to a tax that would ultimately hurt businesses and consumers on both sides of the Canada-U.S. border.<\/div>\n<p> Sal Guatieri, a senior economist at BMO Capital Markets, said if goods compliant with the <\/p>\n<p>                        Canada U.S.-Mexico Trade Agreement (CUSMA)<\/p>\n<p>                         remain exempt from new tariffs, the threatened increase for some goods would result in a slightly larger, though still shallow, economic contraction, which the bank is already forecasting. <\/p>\n<p> \u201cIf we lost the exemption, we are talking about a much more severe outcome,\u201d he said. <\/p>\n<p> Jon Levin, a veteran corporate lawyer at Fasken Martineau DuMoulin LLP, said clients he has spoken to largely view Trump\u2019s letter as a negotiating tactic to pressure the Canadian government in its discussions with the U.S. so reactions are muted. But some are now questioning whether Canada\u2019s Prime Minister Mark Carney gave up a potentially powerful bargaining chip last month by abruptly abandoning <\/p>\n<p>                        Canada\u2019s digital sales tax<\/p>\n<p>                        , which would have affected large U.S. tech firms. <\/p>\n<p> \u201cThere is a view that for the Trump administration to make (the 35 per cent tariff) announcement after Canada announced it would abandon the digital services tax demonstrates that there is no point in making concessions that are not part of an overall deal,\u201d he said. \u201cRather, it would have been better if Canada had announced that it was deferring the start date of that tax pending the outcome of trade negotiations with the U.S.\u201d <\/p>\n<p> William Pellerin, a partner in the international trade practice at law firm McMillan LLP, said Canada has been seeking a broader defence and security pact, with the hope of returning to wider trade talks later this year or next. However, the Trump administration continues to tie any progress to two main sticking points \u2014 Canada\u2019 supply management system and concerns over fentanyl making its way into the country through Canada \u2014 while showing little evidence to support the latter. <\/p>\n<p> \u201cThere is still a window, albeit just a few weeks, for the two sides to reach an agreement,\u201d Pellerin said. <\/p>\n<p> The prospect of wider talks down the road to renew the CUSMA agreement with the U.S. and Mexico suggests Canada should carefully balance what the country is willing to give up and how hard it\u2019s prepared to push back in the current trade negotiations, said Shenfeld, the CIBC economist. <\/p>\n<ul class=\"related_links\">\n<li>Trump says U.S. will impose 35% tariff on Canadian goods starting Aug. 1<\/li>\n<li>Trump&#8217;s new tariff on copper &#8216;inexplicable,&#8217; professor says<\/li>\n<\/ul>\n<p> \u201cIf (CUSMA) isn\u2019t renewed in 2026, all of our exports could see double-digit U.S. reciprocal tariffs if they haven\u2019t been overruled by the U.S. courts,\u201d he said in a note to clients. \u201cThat\u2019s another reason to not go full elbows up now, or give the U.S. everything it wants at the negotiating table. We\u2019ll need to save some cards for the next hand, as we get to work on the (CUSMA) renewal.\u201d <\/p>\n<p> <em>\u2022 Email: bshecter@postmedia.com<\/em> <\/p>\n<p> <em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here.<\/em> <\/p>\n\n<br \/>Trump&#039;s new tariff threat hikes uncertainty for Canadian businesses<\/a><br \/>\n<br \/>2025-07-11 17:52:36<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canadian businesses are once again scrambling, trying to interpret the latest trade edict from U.S. president Donald Trump, who sent a letter late Thursday threatening Canadian imports with a 35&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-61808","post","type-post","status-publish","format-standard","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/61808","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=61808"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/61808\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=61808"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=61808"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=61808"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}