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“A little more time now can deliver lasting benefits for an integrated North American economy — and that’s well worth the wait,” said Candace Laing, president and CEO of the Canadian Chamber of Commerce, in a statement.

Canada has had a tense relationship with its closest ally since earlier this year, when Donald Trump kicked off his second presidency with a tariff regime targeting his country’s northern neighbour and a vast swath of other nations.

Canadian steel, aluminum and automobiles have been bearing the brunt of his early levies, but Trump eventually agreed to explore a potential deal.

He set Aug. 1 as a deadline to reach a trade deal and said if an agreement wasn’t brokered by then, tariffs on goods not compliant with the Canada-U.S.-Mexico Agreement (CUSMA) would rise immediately.

The exemption means much of Canada’s cross-border trade is currently tariff-free, said Laing.

“However, not all Canadian businesses have this advantage and the jump to 35 per cent tariffs on non-CUSMA compliant products places an additional load on them,” she said.

She feels businesses in Canada and the U.S. urgently need more certainty.

The Canadian Federation of Independent Business agrees. It warned Friday that the current uncertainty is keeping many of its 100,000 members from planning for the future.

The lack of resolution has left companies unsure whether they will need to scale back operations or lay off staff.

“The worst outcome for Canada is a bad deal,” CFIB president Dan Kelly said in a statement. “But the second worst outcome is ongoing uncertainty over Canada-U.S. trade. This is what small business owners now face.”

Some bigger companies have been feeling the effects for even longer because their industries were impacted by earlier tariffs Trump imposed.

For example, tariffs have caused cars from Canada to cost Americans 25 per cent more, decreasing the volume of vehicles crossing the border, said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, on Tuesday.

Automakers are so far absorbing the tariff costs but that can’t go on forever because many have seen their revenues take a hit, he said. 

He suspects automakers will increasingly be making strategic decisions about where they produce vehicles for each market.

“If you’re making the same car in Oshawa (Ontario) that you are in Fort Wayne, Indiana and if you want to sell that car to somebody in Texas, are you going to make more of them in Oshawa for the buyer in Texas that’s got to pay $75,000 for it, or are you going to make more of them in Indiana and that buyer only pays $60,000?” he said.

Unifor president Lana Payne said the impact the tariffs will have on workers and businesses can’t be underestimated, pointing to layoffs and shift reductions since Trump began the trade war.

“This is an extortion game that’s being played by the president of the United States,” said Payne, whose union represents more than 315,000 workers.

“We can’t allow the tactics that he’s using for us to end up in a place where we write off the auto industry, where we write off forestry workers, where we write off steelworkers.”

Payne thinks Canada has leverage — aluminum, critical minerals, electricity, oil and potash — and should be using them to retaliate. She said she has repeated that message to Canada’s ambassador to the U.S. and the prime minister’s office.

“We have to fight back for all workers, because we know it isn’t going to just stop with them,” she said. 

“It’s important right now that we draw a line in the sand and understand that Canada has a lot of strength and a lot of leverage, and we’re going to have to use some of it.”

— with files from Daniel Johnson in ÎÚÑ»´«Ã½ and Alessia Passafiume in Ottawa

This report by The Canadian Press was first published Aug. 1, 2025.