Trump Holds Firm on Tariff Strategy as Canada Trade Talks Race Toward Deadline

President Donald Trump has reaffirmed his hardline stance on tariffs, even after rolling back select levies in a recent US–China trade agreement. As Canada heads into the final stages of trade negotiations with the US, the pressure is mounting. 

The Trump administration is signaling that any deal must meet strict conditions—raising questions about whether Canada can secure favorable terms before the deadline hits. Meanwhile, US consumer confidence has taken a hit, reflecting ongoing concerns about inflation and economic stagnation.

READ ALSO: Tariffs Bring More Revenue for the US! But Is It Sustainable?

Consumer Confidence Slips Despite Partial Tariff Rollbacks

Fresh data from the Conference Board reveals that US consumer confidence declined sharply in June, wiping out nearly half of the gains seen in May. The drop was widespread, affecting all demographics, but particularly stark among Republican voters—a surprising twist given Trump’s political base.

Economists say the rollback of certain tariffs gave shoppers brief hope last month. However, the broader 10% tariff still applies to nearly all imports except for key sectors like semiconductors and pharmaceuticals. The ongoing uncertainty, especially following conflicting federal court rulings, continues to cloud the consumer outlook.

Stephanie Guichard, a senior economist at the Conference Board, noted:

"Consumer confidence weakened in June, erasing almost half of May's sharp gains."

Trump’s Trade Strategy: Pressure Without Full Retreat

While the US–China agreement brought temporary relief to markets, Trump has made it clear that tariffs will remain a core negotiation tool. Wall Street responded positively to the partial rollback, but companies such as Walmart and Best Buy have already warned of potential price hikes as a result of the continuing levies.

President Trump’s team views tariffs as leverage—not just against China, but also in ongoing talks with Canada. The administration insists that any deal must protect US industries and reduce trade deficits. Yet, consumer groups and economists worry that prolonged tariffs could contribute to a period of stagflation, where rising prices are coupled with stagnant growth.

READ ALSO: EU Strikes Back with New Tariff Plans! How $113 Billion US Goods Can Be Taxed

Canada Faces Tight Timeline to Secure Trade Deal

Canada is in the final stages of negotiations with the Trump administration. While Canadian officials are hoping for reduced trade restrictions and better access to US markets, insiders suggest that progress has been slow. Trump’s insistence on strong terms has complicated talks.

If no deal is reached soon, Canadian exporters may continue to face significant barriers, particularly in automotive and agriculture sectors. Meanwhile, retailers and manufacturers on both sides of the border are growing uneasy about prolonged economic uncertainty.

Federal Reserve Cautious Amid Tariff Uncertainty

Federal Reserve Chair Jerome Powell has acknowledged that tariffs could lead to slower economic activity and rising inflation—two forces that are difficult to manage simultaneously. At a recent press conference, Powell said:

“Tariffs will likely push up prices and weigh on economic activity... We are well positioned to wait and learn more before adjusting our policy stance.”

The Fed has held interest rates steady, adopting a wait-and-see approach. However, the OECD predicts US inflation could hit 4% by the end of 2025, a sharp jump that could test the Fed’s current trajectory.

Conclusion

With consumer confidence falling and inflation risks rising, the Trump administration’s trade strategy is under scrutiny. While partial tariff rollbacks brought momentary relief, the broader economic landscape remains fragile. For Canada, the clock is ticking. Unless negotiators can strike a mutually beneficial deal soon, both economies could face prolonged uncertainty. As Trump holds firm on tariffs, the stakes are growing for international partners and American consumers alike.

READ ALSO: Did the Market Just Became Bullish? Looking at the Sentiment from Tariff Decisions

FAQ

1. Why did US consumer confidence fall in June?

The decline reflects growing concerns about inflation, tariffs, and the uncertain path of the US economy—even after some tariffs were rolled back.

2. What is the status of US–Canada trade negotiations?

Talks are ongoing with a tight deadline. Trump is demanding strong terms, making it harder for Canada to secure a favorable deal.

3. Are tariffs causing inflation?

Yes. Importers often pass higher costs to consumers, contributing to rising prices. The OECD expects US inflation to reach 4% by end-2025.

4. How is the Federal Reserve responding?

The Fed has kept interest rates steady but is closely monitoring the impact of tariffs and inflation risks before making policy adjustments.

5. Where can I invest safely during tariff-related volatility? 

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