By Maria Cheng and Promit Mukherjee
OTTAWA, July 21 (Reuters) – Canadian Prime Minister Mark Carney said he and U.S. President Donald Trump agreed to intensify trade negotiations after speaking on Tuesday, but warned he would consider all options if the tariffs Trump threatened on Monday go ahead.
Trump on Monday unveiled plans for 50% tariffs on a wide range of imports from Canada in retaliation to what he described as discriminatory treatment of American-made cars, alcohol and dairy goods.
Relations between Canada and its largest trading partner have been tested by Trump’s repeated jibes to make Canada the 51st state, disagreements over a new bridge and sharp comments about wildfire smoke.
The tariffs came just before U.S. and Mexican trade negotiators met for a third round of bilateral talks, without Canada.
“I’ve spoken with the president, we agree to intensify discussions. We’ll begin that right away, and this is part of the negotiation. So the first objective is to get a comprehensive agreement,” Carney told reporters.
Trump, when asked whether Canada tariffs were in response to the wildfires, said: “No, that’s separate. We’re looking at that separately.”
Carney said the Canadian provinces should only lift their bans on U.S. alcohol as part of a broader U.S. trade deal. Nearly every Canadian province except for Alberta and Saskatchewan has banned or severely restricted the sale of American beer, wine and spirits in response to earlier U.S. tariffs.
Leaders of Canada’s provinces meeting this week in Prince Edward Island blasted the new tariffs.
Ontario Premier Doug Ford, leader of Canada’s most populous province, said Canada should respond “dollar for dollar” to the new tariffs, while Alberta Premier Danielle Smith said the new tariffs would hurt both Canadian and American workers.
Saskatchewan Premier Scott Moe called for the government to intensify talks with the U.S., saying the relationship with Canada’s largest trading partner “is more important than any president or prime minister.”
British Columbia Premier David Eby delivered the starkest message: “There is not a chance in hell that U.S. alcohol is going back on the shelves in British Columbia.”
Saskatchewan leader Moe said he expected the federal government would be asking provincial leaders to consider restocking their shelves with U.S. alcohol as negotiations continue, however.
CANADIANS ARE NOT A PUNCHING BAG
Even the opposition Conservatives called on the prime minister to stand firm against Trump.
“President Trump’s latest tariffs are another unacceptable and unjustified attack on Canadian workers and our businesses,” the party said in a statement. “Canadians are not a punching bag,” it said, adding that the tariffs must be withdrawn immediately.
In slapping import taxes on symbolic goods ranging from wine to cement and ice hockey gear, Trump invoked Section 338 of the Tariff Act of 1930, which permits a president to impose punitive tariffs of up to 50% against trading partners deemed to have discriminated against U.S. goods. That marked the law’s first known usage in nearly a century of existence.
The new tariffs, set to take effect in 30 days, would also apply to dairy products, swimming pools, furniture, fishing rods, seeds, clothing and wigs, among other items.
The U.S. Trade Representative’s office said that the tariffs would apply to nearly $20 billion of imports from Canada. That’s about 5.2% of the $382 billion worth of goods that the U.S. imported from Canada in 2025, according to U.S. Census Bureau data.
U.S. Vermont Senator Peter Welch, member of the Senate Finance Committee, called the new tariffs “an extreme escalation of President Trump’s reckless and irresponsible trade war.” Welch said the White House’s attacks on Canada have caused “undeniable harm” to Vermont and called for the U.S. to drop the new threats immediately.
Candace Laing, president and CEO, Canadian Chamber of Commerce, said the group had previously shared its concerns with the Canadian government and worried that more tariffs could be coming.
“We knew this would get bumpier before landing,” she said.
The Canadian dollar weakened 0.1% to touch a one-week low at 1.4090 per U.S. dollar, or 70.97 U.S. cents.
(Reporting by Maria Cheng, Additional reporting by David Ljunggren in Ottawa and Fergal Smith in Toronto; Editing by Andrea Ricci .)
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