WASHINGTON — U.S. President Donald Trump said Thursday he has not “spoken to Canada” as his tariff deadline looms.
Trump did say that “he’s called” — suggesting Prime Minister Mark Carney may have reached out hours before a 35 per cent tariff is set to hit Canada. The Canadian Press has contacted Carney’s office for confirmation but has not yet received a response.
Trump dampened expectations of a deal with Canada this week in a post on social media early Thursday morning. Trump said it will be very hard to make a deal with Canada after Carney announced Wednesday that Ottawa intends to recognize a Palestinian state.
Trump told reporters at the White House Thursday he “didn’t like that” but that it was “not a deal-breaker.”
When asked about the holdup in Canadian negotiations, Trump said “they have to pay a fair rate.” The president also misrepresented agricultural duties, complained about Canadian military spending and said Canada has been treating the United States badly for years.
“We like Canada, I love Canada, I have so many friends in Canada but they’ve been very poorly led,” Trump said. “They’ve been very, very poorly led and all we want is fairness for our country.”
Commerce Secretary Howard Lutnick told Fox Business Network that Carney’s decision on Palestine was “tone deaf” and he didn’t see the president “stepping off the gas.” He added that Canada hasn’t “solved dairy” and pointed to Ottawa’s retaliatory tariffs that remain in place.
If Carney calls Trump and “turns on the charm,” removes retaliatory duties and “stops the silliness,” the president might “let it down a bit,” Lutnick said.
Trump previously sent a letter to Carney threatening to impose 35 per cent tariffs if Canada doesn’t make a trade deal by Friday. The White House has said those duties would not apply to goods compliant with the Canada-U.S.-Mexico Agreement on trade, better known as CUSMA.
Trump did announce Thursday a 90-day extension on trade talks for Mexico after a phone conversation with President Claudia Sheinbaum. He said it was because the “complexities of a Deal with Mexico are somewhat different than other Nations because of both the problems, and assets, of the Border.”
“Additionally, Mexico has agreed to immediately terminate its Non Tariff Trade Barriers, of which there were many,” Trump said. “We will be talking to Mexico over the next 90 Days with the goal of signing a Trade Deal somewhere within the 90 Day period of time, or longer.”
Mexico already recognizes a Palestinian state.
White House Press Secretary Karoline Leavitt did not rule out further extensions and said there was still time for countries to negotiate ahead of the midnight deadline.
“I do know that other foreign leaders around the world have reached out,” she said.
While Trump continued to claim in posts on social media that tariffs are making “America GREAT & RICH Again,” the president’s main tool for realigning global trade faced some sharp questions from federal appellate judges in court Thursday morning.
The Trump administration’s lawyer argued in the U.S. Court of Appeals for the Federal Circuit that there are still checks and balances on the president’s powers and he has the authority to use a national security statute to impose duties — despite the fact that the word “tariff” is found nowhere in the International Economic Emergency Powers Act of 1977.
The act, usually referred to by the acronym IEEPA, gives the U.S. president authority to control economic transactions after declaring an emergency. No previous president had ever used it for tariffs and the U.S. Constitution reserves power over taxes and tariffs for Congress.
Members of the 11-judge panel on Thursday repeatedly questioned the Trump’s administration’s justifications for using IEEPA to implement the so-called “Liberation Day” and fentanyl-related tariffs
“If the president says there’s a problem with our military readiness and he puts a 20 per cent tax on coffee, that doesn’t seem to necessarily deal with (it)” said Chief Circuit Judge Kimberly Moore.
Thomas Berry, with the Washington-based Cato Institute, said in a media statement that “based on the tenor and questions of the arguments, it appears that the challengers have the better odds of prevailing.”
The Cato Institute, which opposes the IEEPA tariffs, provided the hearing with an amicus brief — a legal submission from a group that’s not party to the action.
No decision was issued from the bench Thursday and Leavitt has said they expect the case to go before the Supreme Court.
— With files from The Associated Press
This report by The Canadian Press was first published July 31, 2025.
Kelly Geraldine Malone, The Canadian Press
