Prime Minister Mark Carney says Canada is ready to push back harder against the United States if the two countries cannot reach a trade agreement before President Donald Trump's newest tariffs take effect Aug. 19.

"We are going to do everything that would be necessary if there isn't a deal on Aug. 19," Carney said Wednesday at an announcement in Toronto (The Globe and Mail). "The time to get tougher will be if there is a moment where there isn't a deal with the Americans."

He did not say what retaliatory steps he is considering, noting only that Canada "has options." Carney has previously ruled out using energy exports as a bargaining chip in the trade talks.

The Aug. 19 deadline stems from Trump's announcement last month of a new tariff round under Section 338 of the Smoot-Hawley Tariff Act of 1930 — a rarely used Depression-era law — targeting US$20-billion in Canadian exports including alcohol, dairy and electronics. That came on top of a separate set of 50-per-cent tariffs on Canadian steel and aluminum imposed under Section 232 of the Trade Expansion Act of 1962, a law that lets the U.S. president impose duties on national security grounds. After the Section 338 announcement, Carney said "everything is on the table" as he weighed whether and how to respond (Reuters).

Carney said Canada's goal is a single comprehensive deal covering all of Trump's sector-by-sector tariffs. "We want all 232s addressed, all strategic sectors. Steel, aluminum, autos, forest products," he said. He called autos "very much at the core of what we're talking about" in the negotiations.

Negotiators have revived a proposal under which Canada would accept limits on how much steel and aluminum it can export to the U.S. — known as export quotas — in exchange for the removal of the 50-per-cent Section 232 tariffs on those metals, according to The Globe and Mail.

Intergovernmental Affairs Minister Dominic LeBlanc and chief negotiator Janice Charette are in Washington for the second time in two weeks to advance the talks. On Tuesday they met with Jay Timmons, CEO of the National Association of Manufacturers, and on Wednesday with Republican Senators Kevin Cramer of North Dakota and Bill Hagerty of Tennessee. Carney said he has had direct conversations with the Americans and described them as "real negotiations, constructive negotiations on several issues."

Carney also said Canadian tariffs on items not covered by CUSMA — the Canada-United States-Mexico Agreement that replaced NAFTA — would stay in place, and that the government would focus on industries the U.S. has targeted (Reuters). Separately, effective Dec. 26, 2025, Canada applied a 25-per-cent tariff on the full value of listed steel derivative products from all countries (Prime Minister's Office).

The broader context here is the complexity of the tariff architecture Carney is navigating. The U.S. is using two different legal statutes at the same time — Section 232 for national security tariffs on steel and aluminum, and Section 338 for the broader Aug. 19 round on alcohol, dairy and electronics. That gives the administration leverage across multiple sectors at once, and leaves Canada with the challenge of trying to negotiate a single deal that dismantles tariffs imposed under two separate laws.

Carney is effectively running a two-track effort: pushing to remove the existing Section 232 tariffs while trying to head off the Aug. 19 Section 338 round before it kicks in. His refusal to detail his options, combined with his decision to take energy off the table, narrows the likely countermeasures to tariff escalation on non-CUSMA goods and trade-remedy actions like the steel-derivative duties already in place. The revived quota-for-tariff proposal on steel and aluminum suggests both sides are exploring a managed-trade arrangement rather than a full return to pre-tariff conditions, which would change how cross-border metals trade is governed under CUSMA.

The outreach to Senate Republicans and a major U.S. manufacturing lobby points to a strategy of building congressional and industry pressure on the administration — an approach Canada used during the original CUSMA negotiations and the 2018 Section 232 dispute. The difference now is the compressed timeline: just under two weeks before the Aug. 19 deadline, with no public sign that the core disagreements on autos and the Section 338 list have been bridged.