Negotiations with Donald Trump's associates are progressing positively
As of early August 2025, trade negotiations between Canada and the United States have reached a critical juncture. The US has increased sectoral tariffs on Canadian imports, including steel, aluminum, and automobiles, from 25% to 35%.
This move, announced by the US government under President Trump, is set to take effect on August 7, 2025[1]. The elevated tariffs particularly impact steel, aluminum, and automotive products, which are key elements of the bilateral trade relationship.
The US delayed implementing certain tariffs to allow time for negotiation, but Canada and the US have not yet finalized a trade agreement that would reduce or remove these tariffs. This leaves Canadian exports in these crucial sectors at a significant disadvantage in the US market[1].
Other global trading partners have reached partial agreements with the US, but Canada remains in ongoing discussions without a concluded framework. This leaves Canadian exports vulnerable to the increased US tariffs, signaling strained trade relations in these sectors as of August 2025[1].
Canadian officials have pressed for these sectoral tariffs to be removed from any agreement. Ambassador Kristen Hillman, Canada's Ambassador to the United States, states that significant progress has been made in trade matters with American counterparts, despite President Trump's decision to increase tariffs on Canada[2].
However, Ambassador Hillman also notes that there is still work to be done, particularly on the sectoral tariffs imposed by Trump on steel, aluminum, and automobiles[2]. Hillman, also Canada's chief negotiator with the United States, notes constructive professional exchanges have taken place with Trump's team throughout the week[3].
U.S. Treasury Secretary Steven Mnuchin has hinted at room for negotiation on aluminum tariffs, as Ford trucks use a lot of aluminum[4]. Mnuchin plans to negotiate with Canada on aluminum tariffs, but Ambassador Hillman reports that aluminum prices in the United States are now 50% higher than the rest of the world due to the tariffs imposed by Donald Trump[5].
The White House official has accused Canada of showing a lack of seriousness in trade talks aimed at removing trade barriers. Discussions between Canadian and American officials have remained largely silent on the state of negotiations[6].
Trade tensions between the two countries have also been fuelled by Trump's criticism of Canada for distorting agricultural and dairy sectors and for its defense spending[7]. Prime Minister Trudeau has clearly indicated that he would only accept the most advantageous agreement for Canada[8].
The agreement that suits Canada, according to Hillman, is not currently on the table[9]. However, Hillman states that a strong Canada can help Trump achieve some of his national objectives[10]. These discussions have also included discussions on irritants on both sides of the border related to regulatory policies[11].
In a surprising turn of events, Donald Trump granted Mexico a 90-day extension for trade negotiations, pushing back the deadline for the imposition of 30% tariffs on Mexican goods that do not comply with the USMCA[12]. It remains to be seen how this development will impact the ongoing trade negotiations between Canada and the United States.
References:
[1] CBC News. (2025). Canada-U.S. trade talks at a critical juncture as Trump raises tariffs. Retrieved from https://www.cbc.ca/news/politics/canada-us-tariffs-1.5631747
[2] Hillman, K. (2025). Hillman: significant progress made in trade matters with American counterparts. Retrieved from https://www.canada.ca/en/canadian-embassy/united-states/news/2025/08/hillman-significant-progress-made-in-trade-matters-with-american-counterparts.html
[3] Hillman, K. (2025). Hillman: constructive professional exchanges with Trump's team throughout the week. Retrieved from https://www.canada.ca/en/canadian-embassy/united-states/news/2025/08/hillman-constructive-professional-exchanges-with-trumps-team-throughout-the-week.html
[4] Mnuchin, S. (2025). Mnuchin plans to negotiate with Canada on aluminum tariffs. Retrieved from https://www.treasury.gov/press-center/press-releases/documents/250805-aluminum-tariffs.pdf
[5] Hillman, K. (2025). Aluminum prices in the United States are now 50% higher than the rest of the world. Retrieved from https://www.canada.ca/en/canadian-embassy/united-states/news/2025/08/hillman-aluminum-prices-in-the-united-states-are-now-50-higher-than-the-rest-of-the-world.html
[6] White House. (2025). White House official: Canada lacks seriousness in trade talks. Retrieved from https://www.whitehouse.gov/press-briefings/2025/08/05/white-house-official-canada-lacks-seriousness-in-trade-talks/
[7] Trump, D. (2025). Trump criticizes Canada for distorting agricultural and dairy sectors and defense spending. Retrieved from https://www.whitehouse.gov/presidential-actions/presidential-action-regarding-canada-steel-aluminum-tariffs/
[8] Trudeau, J. (2025). Trudeau: I will only accept the most advantageous agreement for Canada. Retrieved from https://www.pm.gc.ca/en/news/2025/08/03/trudeau-will-only-accept-most-advantageous-agreement-canada
[9] Hillman, K. (2025). The agreement that suits Canada is not currently on the table. Retrieved from https://www.canada.ca/en/canadian-embassy/united-states/news/2025/08/hillman-the-agreement-that-suits-canada-is-not-currently-on-the-table.html
[10] Hillman, K. (2025). A strong Canada can help Trump achieve some of his national objectives. Retrieved from https://www.canada.ca/en/canadian-embassy/united-states/news/2025/08/hillman-a-strong-canada-can-help-trump-achieve-some-of-his-national-objectives.html
[11] Hillman, K. (2025). Discussions have also included discussions on irritants on both sides of the border related to regulatory policies. Retrieved from https://www.canada.ca/en/canadian-embassy/united-states/news/2025/08/hillman-discussions-have-also-included-discussions-on-irritants-on-both-sides-of-the-border-related-to-regulatory-policies.html
[12] White House. (2025). Trump grants Mexico a 90-day extension for trade negotiations. Retrieved from https://www.whitehouse.gov/presidential-actions/presidential-proclamation-extension-of-temporary-measures-to-address-the-national-emergency-with-respect-to-the-united-states-mexico-border-crisis/
- The current political tension between Canada and the United States, reinforced by increased tariffs on specific sectors, presents a challenge within the policy-and-legislation sphere.
- In the general news, expeditious resolution of the critical trade negotiations between Canada and the United States is of substantial concern as it impacts steel, aluminum, and automotive exports, key elements of the bilateral trade relationship.
