Published July 21, 2026
Canadian Prime Minister Mark Carney said he and U.S. President Donald Trump had agreed to step up trade negotiations, but warned that he would consider all options if the tariffs that Trump threatened on Monday go through.
Carney spoke to reporters Tuesday after meeting with Trump.
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President Trump on Monday announced plans to impose 50% tariffs on a wide range of Canadian imports in retaliation for discriminatory treatment of American-made cars, alcohol and dairy products.
Canada’s relationship with its largest trading partner has been tested by President Trump’s repeated tirades about making Canada its 51st state, disagreements over a new bridge and sharp comments about wildfire smoke.
The tariffs were announced just before U.S. and Mexican trade negotiators meet for a third round of bilateral negotiations without Canada.
“I spoke with the president. We agreed to step up the discussion. We’ll start immediately. This is part of the negotiations. So the first goal is to get a comprehensive agreement,” Carney told reporters.
Asked if the tariffs on Canada were in response to the wildfires, President Trump said: “No, that’s different. We’re looking at that separately.”
Carney said Canadian provinces should only lift their bans on U.S. alcohol as part of a broader U.S. trade deal. Nearly all Canadian provinces except Alberta and Saskatchewan have banned or severely restricted the sale of U.S. beer, wine, and spirits, in response to previous U.S. tariffs.
Until then, Canada had been the largest importer of U.S. alcohol, at least by volume, but with the ban, imports of U.S. wine from Canada have fallen by more than 80% since February 2025, and other alcohols have declined by similar amounts, Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, said in a memo.
Canadian provincial leaders met in Prince Edward Island this week to slam the new tariffs.
Ontario Premier Doug Ford, leader of Canada’s most populous province, said Canada should respond “dollar-for-dollar” to new tariffs, while Alberta Premier Daniel Smith said new tariffs would hurt both Canadian and U.S. workers.
Saskatchewan Premier Scott Moe called on his government to step up talks with the United States, saying the relationship with Canada’s largest trading partner is “more important than any president or prime minister.”
British Columbia Premier David Eby issued the starkest message yet: “There is no chance that American alcohol will ever return to British Columbia shelves.”
But Saskatchewan’s Chief Moe said he expects the federal government will ask provincial leaders to consider supplementing with U.S. alcohol as negotiations continue.
“Canadians are not punching bags”
The opposition party, the Conservative Party, also called on the prime minister to take a firm stance against Trump.
“President Trump’s latest tariffs are yet another unacceptable and unwarranted attack on Canadian workers and our companies,” the party said in a statement. “Canadians are not punching bags,” he said, adding that the tariffs should be lifted immediately.
In imposing import taxes on iconic goods ranging from wine to cement to hockey equipment, President Trump invoked Section 338 of the U.S. Tariff Act of 1930, which allows the president to impose punitive tariffs of up to 50 percent on trading partners deemed to have discriminated against American products. This was the first known use of the law in the nearly a century of its existence.
The new tariffs, which are expected to take effect within 30 days, will also apply to dairy products, swimming pools, furniture, fishing rods, seeds, clothing and wigs.
The Office of the U.S. Trade Representative announced that the tariffs will apply to nearly $20 billion of Canadian imports. This represents about 5.2% of the $382 billion worth of goods the United States imported from Canada in 2025, according to U.S. Census Bureau data.
Vermont Sen. Peter Welch, a member of the U.S. Senate Finance Committee, said the new tariffs are “an extreme escalation of President Trump’s reckless and irresponsible trade war.” Welch said the White House’s attacks on Canada are causing “undeniable harm” to Vermont and called on the U.S. to immediately halt any new threats.
Candice Lane, president and CEO of the Canadian Chamber of Commerce, said her organization had previously shared concerns with the Canadian government and feared further tariffs would be imposed.
“We knew before we landed that this was going to be rougher,” she said.
The Canadian dollar fell 0.1% to a one-week low of 1.4090 cents (US$70.97) to the US dollar.
