What Happens After US Canada Tariff Decision Delay?

The deadline has come and gone, but no new trade agreement between the US and Canada has been reached.

Despite months of negotiations, escalating tariffs, and political pressure, both sides failed to finalize a deal before Friday’s cutoff.

President Trump and Prime Minister Carney now face growing criticism, while Canadian exporters navigate rising tariffs and shifting trade rules.

What happens next? Negotiations continue, but the missed deadline adds more uncertainty to an already tense relationship between two of the world’s closest trading partners.

If you are interested in crypto trading, explore Bitrue and enhance your experience. Bitrue is dedicated to providing safe, convenient, and diversified services to meet all crypto needs, including trading, investing, purchasing, staking, borrowing, and more.

Key Takeaways

1. No new deal yet: The US and Canada missed their summer deadline for a trade agreement, with ongoing talks but no resolution.

2. Tariffs remain in place: Canada faces a 35% tariff, though relief exists under the CUSMA/USMCA agreement.

3. Business frustration is growing: Companies on both sides are demanding more certainty and fewer barriers.

Why the Deadline Was Missed

The deadline was originally set during the G7 summit in June, when Trump and Carney agreed to try for a summer resolution. Yet as the weeks passed, optimism faded. By late July, it became clear that political and economic friction would delay progress.

Several factors played into the breakdown. First, Trump publicly criticized Canada’s recognition of a Palestinian state, a diplomatic move that soured the tone of negotiations.

Second, both leaders acknowledged they would not rush into a flawed deal. Canadian officials repeated that a well-crafted agreement mattered more than meeting an arbitrary date.

Political pressures were also at play. Conservative leader Pierre Poilievre criticized the Carney administration for missing the deadline and failing to shield Canadians from steep tariffs.

At the same time, the US administration held firm on its demands, linking tariffs to unrelated issues like border security and fentanyl control, further complicating the talks.

For now, the missed deadline does not mean talks have collapsed, but it does signal that progress is likely to be slower and more complex than previously hoped.

Read Also: Is Canada Warming Up to Crypto? Recent XRP ETF Listings Suggest

How Tariffs Are Impacting Trade and Industry

With no new agreement in place, Canada continues to face a 35% tariff rate on US-bound exports. This rate is among the highest imposed by the US, second only to countries without existing trade frameworks.

However, there is a key loophole: the Canada-United States-Mexico Agreement (CUSMA), which still allows for duty-free trade under certain conditions.

Around 90% of Canadian exports to the US still enter without tariffs if companies properly file CUSMA paperwork. This has helped cushion the impact, but not all industries have escaped unscathed.

US global tariffs on steel, aluminum, cars, and parts are particularly painful. Canadian producers are feeling the squeeze, especially in sectors with tight profit margins.

Ottawa has responded with its own countermeasures, placing CA$60 billion in tariffs on American goods. While that shows resolve, some experts argue it has not significantly changed US behavior.

Meanwhile, Canadian businesses are growing impatient. Many are calling for long-term solutions and predictable trade conditions to plan for the future.

Relief programs have been introduced to support affected sectors, and Ottawa has reported higher import duty revenues this year. Still, the overall sentiment is one of frustration. Both Canadian and US businesses want clarity fast.

Read Also: Canada Approves First XRP Spot ETF

Why Canada Still Has Leverage

Despite the setback, Canada holds a few strategic advantages. The existing CUSMA agreement remains in force, providing a legal structure that prevents full-blown trade isolation.

While steep tariffs exist, they are more symbolic than practical in many cases, thanks to CUSMA carve-outs.

Additionally, the US economy is still closely tied to Canada’s. Supply chains between the two countries are deeply integrated, especially in automotive manufacturing and raw materials. That interdependence makes it hard for either country to completely walk away.

Canadian opinion polls show public support for Prime Minister Carney’s cautious approach. Businesses and analysts alike argue that patience may pay off, especially if economic pressure in the US begins to rise.

So far, consumer confidence remains stable in the US, but if prices spike or shortages appear, political pressure on Trump to soften his stance could grow.

Canada has also quietly made progress on other fronts. It has boosted defense spending, increased border security, and rolled back a digital tax disliked by US tech firms. These moves signal good faith and may encourage US officials to return to the table in better spirits.

Read Also: Canada Slaps 25% Tariff as More Critics Protest Against US Trade Policy Escalation

What’s Likely to Happen Next

Negotiations are expected to continue in the weeks ahead. Canada’s trade minister has described recent discussions as “informative and cordial,” and officials say that Carney and Trump plan to speak again soon. Whether that leads to a breakthrough remains to be seen.

One major issue is the range of non-trade concerns the US is tying to its demands. The fentanyl crisis, military spending, and border controls have all been raised in trade talks, none of which are strictly economic in nature.

Canada has taken steps to respond, but maintains that trade and public health should remain separate discussions.

Looking forward, both sides may explore scaled-down agreements on specific sectors rather than a sweeping deal.

Relief on steel and aluminum tariffs is one possibility, especially since those duties are now affecting US automakers.

There may also be talks around adjusting dairy protections and cross-border e-commerce thresholds.

In the meantime, Canadian exporters are diversifying. Surveys show that nearly 40% of exporters are seeking suppliers outside the US, and over a quarter are finding new buyers in other countries.

The hope is that Canada can reduce its dependence on US markets while still maintaining strong trade ties.

Read Also: Experts Say Canada’s Bitcoin Reserve Could Be Made Possible by Trudeau’s Successor

Conclusion

The missed US-Canada tariff deadline is not the end of trade cooperation, but it is a clear signal that the relationship is under strain.

With no formal deal in place, businesses are left to navigate an uncertain environment where tariffs rise and relief depends on technical paperwork.

While the CUSMA agreement continues to offer a safety net, it is not a permanent fix. Both countries face domestic pressure to resolve the issue, but the path forward will likely be gradual and tactical rather than sweeping.

For individuals and businesses affected by this uncertainty, managing financial risk is more important than ever. One way to take control is through secure trading platforms like Bitrue.

With real-time tracking, multi-asset support, and simple interfaces, Bitrue helps you stay informed and ready, especially in a global economy where headlines move markets. Explore Bitrue for safer and easier trading during unpredictable times.

FAQ

What caused the US-Canada trade deadline to be missed?

Ongoing disagreements over tariffs, political tensions, and unrelated issues like border security delayed a formal agreement.

Are tariffs currently active between the US and Canada?

Yes. Canada faces a 35% tariff rate on most goods, though many products are exempt under CUSMA with proper documentation.

How are Canadian businesses responding?

Many are diversifying suppliers and customers outside the US, while also using relief programs and CUSMA paperwork to avoid steep tariffs.

Is a new trade deal still possible?

Yes. Talks are ongoing, and both governments say they are committed to finding a resolution, though there’s no firm timeline.

What industries are most affected by the tariffs?

Steel, aluminum, automotive, and dairy are among the hardest hit, but overall uncertainty is impacting a wide range of sectors.

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.