Stalled US-Canada trade talks, Trump threatens to impose higher tariffs on Canada.

On Friday, U.S. President Trump said that the United States may not reach a new trade agreement with Canada and threatened to impose additional or higher tariffs on Canada within a week. "Our negotiations with Canada have not been going smoothly," Trump told reporters outside the White House. "I think the situation with Canada may not be negotiations, but directly imposing tariffs." He then departed for Scotland. This is the first time in nearly two weeks that Trump has openly discussed the progress of trade negotiations with Canada. It is reported that Trump sent a formal letter to Canadian Prime Minister Trudeau on July 10, threatening to impose a 35% tariff on Canadian goods if an agreement is not reached by August 1. Currently, most of these goods are subject to a 25% tax rate, and this move would greatly increase the tax rate. Trump invoked emergency powers and pushed for this measure citing a threat to national security posed by fentanyl trafficking. Most Canadian goods can still be exempt from these tariffs as long as they comply with the North American origin rules in the USMCA agreement. In addition, Canadian steel and aluminum products currently face tariffs of up to 50% imposed by the United States, while Canadian exports of energy and potash to the U.S. are subject to a 10% tariff. When asked what would happen before next Friday, Trump said, "August 1 is approaching, by then most of our trade agreements will be completed, maybe even all of them." He mentioned progress in negotiations with Australia, the EU, and China, but openly criticized Canada: "We don't have an agreement with Canada, and we haven't really focused on them." Trump's remarks are seen as a signal that hopes of reaching an agreement with Canada before the August 1 deadline are dwindling. Meanwhile, Canadian Prime Minister Trudeau and his cabinet have repeatedly signaled that they are not in a rush to sign an agreement. During a visit to Washington on Thursday, Canada's chief trade negotiator expressed caution about reaching an agreement before the deadline. Canadian Minister of Trade Dominic LeBlanc said, "We will continue to work towards reaching an agreement before August 1, but any target at any point must be based on maximizing the interests of the Canadian economy and workers." Earlier this week, Trudeau also made it clear at a press conference, "Our goal is not to sign a deal at any cost." It is currently unclear what specific factors are hindering the U.S. and Canada from reaching a tariff agreement. Although Trump has frequently mentioned border security and fentanyl smuggling issues, data shows that Canada is not a major source of illegal immigrants or drugs for the U.S. Additionally, Trump has also opposed Canada's plans to tax digital services provided by tech giants like Amazon.com, Inc., Apple Inc., Alphabet Inc. Class C, and Netflix, and halted trade negotiations with Canada until this tax is revoked. This move forced the Canadian government to quickly retract the policy. Trump also continues to criticize Canada's restrictions on dairy imports during his tenure, while Canada has vowed to defend its supply management system in its policy platform released in May.