Carney says Canada ready for US trade deal as retaliatory tariffs loom

Canadian Prime Minister Mark Carney said Thursday that Ottawa is ready to negotiate a trade agreement with the United States, but only on terms that protect the country's automotive and steel industries, as a new round of retaliatory tariffs approaches next week.

"We're ready to sit down and strike that deal when the Americans are ready," Carney told reporters in Thunder Bay, Ontario. He added that any agreement must provide "stability and credibility" and keep Canadian manufacturing competitive.aljazeera+1

The remarks came with five days left before Canada's counter-tariffs — ranging from 15 to 50 percent on more than 700 American products worth C$27.6 billion — take effect on September 8. Washington imposed 50 percent tariffs on a similar value of Canadian goods on August 22, hours after trade negotiations collapsed on August 21. The United States has also threatened 50 percent tariffs on all Canadian cars and auto parts beginning January 1, 2027.freshfruitportal+3

A $4.7 Billion Bet on Domestic Manufacturing

Carney used the Thunder Bay visit to announce a C$4.7 billion contract with Alstom ↗ 1.09% Canada to build 313 new VIA Rail passenger cars at plants in Ontario and Quebec — the first time in four decades the cars will be manufactured domestically. The fleet they replace, some of it more than 70 years old, was largely built in the United States.eletric-vehicles+1

"Cars once made in the United States, now made here at home," Carney said, framing the deal as a centerpiece of Ottawa's Buy Canadian procurement policy. The project is expected to support nearly 700 jobs and generate more than C$1.6 billion in economic benefits.eletric-vehicles

Blame Game and Political Stakes

The collapse of talks has produced a bitter exchange between the two capitals. Commerce Secretary Howard Lutnick blamed Canada, telling CNBC that negotiators "blew it up for political reasons only". Carney dismissed the charge, saying "appointed, unelected cabinet members in the United States are not experts on Canadian politics". He suggested there had been a recent softening in the American position on some sticking points, including provisions on Canadian language and culture, calling that shift welcome.disruptionbanking+1

Shortly after Carney spoke Thursday, President Trump posted on Truth Social that it was "very good for Canadian Politicians like Prime Minister Mark Carney to make President Donald J. Trump 'the enemy,'" warning that Canada's economy would collapse.aljazeera

The political calendar looms large on both sides of the border. Quebec holds a provincial election on October 5, Alberta votes on a separation referendum on October 19, and U.S. midterm elections follow in November. Canada's retaliatory tariffs are calibrated to hit midterm swing states: Industry Minister Mélanie Joly acknowledged on NPR that the retaliation list targets states with competitive races.disruptionbanking

Diversification and the Road Ahead

Ottawa is simultaneously working to reduce its dependence on the American market. The U.S. share of Canadian exports fell to 66.35 percent in July, down from 72.64 percent a year earlier, according to Statistics Canada data released Thursday. Carney has pledged to double non-U.S. exports by 2035, and goods exports to non-American markets rose roughly 17 percent from 2024 to 2025.gfmag+1

On September 14, Carney will host a first-of-its-kind investment summit in Toronto, aiming to secure C$1 trillion in foreign investment over five years. Sovereign wealth funds and institutional investors representing more than $100 trillion have been invited. To lead the effort, Carney this week appointed Dominic Barton, the former McKinsey executive and ambassador to China, as chair of Invest in Canada.politico+1

Senator Susan Collins of Maine captured the unease felt by some American lawmakers: "This is not China we're dealing with. It's Canada, our best friend, a country with whom our economy is completely intertwined".disruptionbanking