Canada-U.S. Trade War Heats Up as Leaders Hold Quiet Talks to Resolve Tariff Dispute

Ottawa/Washington: Canadian Prime Minister Mark Carney and U.S. President Donald Trump are in active direct communication amid intensifying trade tensions, triggered by Washington’s decision to double tariffs on Canadian steel and aluminum exports from 25% to 50%.

Describing the standoff as a full-fledged “trade war alongside negotiations,” Canadian Industry Minister Mélanie Joly confirmed that the two leaders are pursuing a diplomatic path while navigating the economic fallout. Canadian Trade Minister Dominic LeBlanc, U.S. Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer are also engaged in backchannel talks to explore a resolution.

U.S. Ambassador to Canada Pete Hoekstra revealed that discussions are focused on developing a new trade and security framework. The proposed deal could include increased American content in North American auto production, greater access to Canadian critical minerals, and expanded Canadian participation in Arctic defense initiatives.

While talks remain confidential to avoid derailing progress, both sides are aiming for a breakthrough agreement before September.

Prime Minister Carney has taken a firm stance, stating that “Canada is not for sale,” and has signaled readiness to impose retaliatory tariffs if negotiations stall. The government remains committed to protecting Canadian workers and industries affected by the sharp increase in U.S. tariffs.

President Trump, meanwhile, has framed the tariffs as necessary for national security and fair trade but is said to be open to compromise if strategic interests can be aligned.

The outcome of these talks could reshape North American trade dynamics and determine whether the ongoing dispute leads to further economic strain or a new era of bilateral cooperation.