Why is the Canadian Government Disappointed by US Tariffs but Committed to CUSMA?

Ottawa (Ontario), Aug 1 (NationPress) Shortly after US President Donald Trump enacted an executive order on Thursday that raised tariffs on Canadian goods from 25 percent to 35 percent effective August 1, the Canadian government expressed its disappointment on Friday, stating that it remains committed to CUSMA.

This increase primarily affects all products not included in the US-Mexico-Canada trade agreement, CUSMA.

In a statement released earlier on Thursday, the White House indicated, "Due to Canada's ongoing inaction and retaliation, President Trump has deemed it necessary to elevate the tariff on Canada to 35 percent to effectively manage the current emergency situation."

A 40 percent transshipment levy will be imposed on goods redirected through third countries to evade these tariffs, according to a White House fact sheet.

This action from the Trump Administration follows claims of Canada’s ongoing inaction and retaliation, leading to the increase just ahead of the August 1 deadline.

In a statement posted on social media platform X, Canadian Prime Minister Mark Carney remarked, “President Trump has declared that the United States will raise tariffs to 35 percent on Canadian exports not covered under the Canada-United States-Mexico Agreement, CUSMA. Although the Canadian government is disappointed by this decision, we remain committed to CUSMA, which stands as the world’s second-largest free trade agreement by trading volume.”

“The U.S. application of CUSMA ensures that the average U.S. tariff rate on Canadian goods remains one of the lowest among all its trading partners. However, sectors such as lumber, steel, aluminum, and automobiles face substantial impacts from U.S. duties and tariffs,” he added.

“For these sectors, the Canadian government will take measures to protect Canadian jobs, enhance industrial competitiveness, promote buying Canadian products, and diversify our export markets,” pledged the PM.

“The United States has rationalized its latest trade measure based on the flow of fentanyl across borders, even though Canada constitutes only 1 percent of U.S. fentanyl imports. We have been actively working to further diminish these volumes.

“The Canadian government is making historic investments in border security to combat drug trafficking, dismantle transnational gangs, and eliminate immigrant smuggling. These measures include hiring thousands of new law enforcement and border security personnel, aerial surveillance, intelligence operations, and instituting the most stringent border legislation in our history.

“We will continue our collaboration with the United States to tackle the fentanyl crisis and save lives in both nations,” PM Carney stated in his post.

“While we will persist in negotiations with the United States regarding our trading relationship, the Canadian government is intently focused on what we can control: Building Canada strong.

“The federal government, provinces, and territories are united in efforts to reduce trade barriers and build a cohesive Canadian economy. We are undertaking a series of significant nation-building projects alongside provincial, territorial, and Indigenous partners. Collectively, these initiatives have the potential to generate over half a trillion dollars in new investments within Canada.

“Canadians will serve as our best customers, creating more well-paying jobs locally while we strengthen and diversify our global trading partnerships. We can offer ourselves more than any foreign government can ever take away by building with Canadian workers and utilizing Canadian resources for the benefit of all Canadians,” concluded the post.