After a blown deadline, what then for American-Canadian trade?

An auto-imposed time for a new trade agreement from the United States-Canada came and came on Friday. So what happens for these two deeply intertwined neighbors?

Canada and the United States have been locked in a pricing war for six months and, despite the “intense” negotiations in recent weeks, a trade agreement remains elusive.

President Donald Trump and Prime Minister Mark Carney spilled cold water on the idea that they will reach a quick and priceless agreement. And Trump’s open criticism of Canada’s decision to recognize a Palestinian state has destroyed hopes for a last minute agreement earlier this week.

Pessimism marks a change in tone from the June G7 meeting, when the two leaders set themselves on the deadline.

Canadian negotiators have come to the conclusion that “this is not the end of the world” if a quick case is not concluded and “this quality on speed and a hasty agreement matters a lot,” Fen Hampson, international business professor at Carleton University in Ottawa, said.

Carney – who was tight on the details of the negotiation – said as much himself, repeating that “any agreement” will not do the trick.

However, there are pressures on both sides to give companies a reprieve.

Conservative chief Pierre Hairy said on Friday that he shared the “disappointment of Canadians” that an agreement had not been concluded by the deadline. He urged Carney Liberals to do more to “regain control of our economic future”.

Canada is now faced with a price rate of 35%, although there is a size for goods in accordance with goods under a current free trade agreement. US world prices on steel, aluminum, cars and car parts are injuring because the United States is a higher market for these sectors.

The Trump administration justified these prices by claiming a lack of cooperation on illicit drug debit like fentanyl. Canada denies that, noting that around 1% of American fentany imports come from Canada. He has also caused new border protections and a “fentanyl tsar” in recent months in order to respond to Trump’s concerns.

The prices threatened over the copper and the expected end of a global tariff exemption used by goods buyers of less than $ 800 could also pinch.

Canada responded with $ 60 billion CA (43.3 billion dollars; 32.3 billion pounds sterling) in counter -tale on various American products – the only country with China to retaliate directly against Trump.

“It is not surprising that companies want certainty after months and months of tumultuous announcements,” said Catherine Fortin-Lefaivre, vice-president of international policy and the global partnership in the Canadian Chamber of Commerce.

“But at the same time, they don’t want certainty to the detriment of a very bad deal.”

Some factors give Canada a certain breathing room.

On paper, it seems that the country is faced with a severe price rate in the United States, but trade is currently freer than the withdrawals suggest it at first glance.

In March, Trump announced a suspended price on goods in accordance with the Canadian United States Agreement of United States, known in Canada under the name of CUSMA and the United States as USMCA.

This agreement – negotiated during Trump’s first term – entered into force five years ago.

Almost 90% of Canadian exports to the United States are ultimately able to cross the right border franchise, if companies deposit the necessary documents, under this agreement.

“It has given us a stamp, without a doubt, that other countries have not yet,” said Professor Hampson.

This means that Canada overall pays a much lower rate rate than many transactions already signed with the United States, such as the EU, South Korea and Japan at 15%, or in Indonesia and the 19%Philippines.

Ottawa also brought rescue programs for affected industries and also collected about 1.5 billion dollars in import rights in addition to the same period last year, due to counter-tail rates.

And while in the American consumer, confidence is increasing and the prices have remained contained, this helps Canada’s negotiation position if they can wait for Americans to start to feel the pain of prices.

“These are Americans who go to Squawk,” said Professor Hampson.

Ms. Fortin-Lefaivre predicts that American companies, in particular small businesses that do not have the same resources to resist them, will put pressure on political leaders.

“So that the pressure can play our advantage,” she said.

Canadians also seem to give the new Prime Minister a certain latitude. Opinion polls suggest that they are generally satisfied with its trade management.

Carney “understands that doing what is best for the economy right now is in fact what is best for him politically,” director of Martha Hall Findlay, director of the BBC at the University of Calgary and a former liberal deputy, told the BBC.

Trump said he imposed prices to stimulate national manufacturing, open markets abroad and raise funds for the government.

He also uses them to push countries like Canada on a range of problems without exchange, including military spending.

In recent weeks, Ottawa has considerably increased its defense expenses, strengthened security at the shared border and killed a digital tax opposed by American technological companies.

These movements show that Canada “does what the Americans wanted us to do,” said Fortin-Lefaivre.

She hopes that Canadian negotiators push the prices to be as low as possible, as well as to ensure that the two deeply integrated supply chains can continue to work together.

Canada puts pressure on relief on 50% and aluminum steel prices, which tighten car manufacturers.

And Thursday, the Treasury Secretary Scott Bessent reported in an interview with CNBC which is an option on the table.

Trump, on the other hand, has raised a number of longtime commercial irritants in addition to fentanyl, including Canada protections around its dairy industry.

Ottawa previously warned against more countermeasures to come if the talks collapse, although political appetite is in decline.

Reprisals “did not seem to have had the kind of impact we hoped,” British Prime Minister David Eby said Bloomberg British Prime Minister.

In retaliation, Professor Hampson said: “The Americans have climbing domination here. So you want to be smart about it.”

A Carney spokesperson refused to say if more countermeasures remained on the table. Meanwhile, Canadian negotiators were most of this week in Washington and continue to advance talks, the Minister responsible for the Canada-US trade said on Friday that an acceptable agreement “was not yet in sight”.

“We all want the certainty of an agreement,” said Fortin-Lefaivre.

But the research of his group of companies suggest that companies are doing emergency plans. Almost 40% of goods exporters have already diversified suppliers outside the United States and 28% have diversified buyers.

They also plan to see what could be more difficult discussions with CUSMA, which has proven a critical security net, because it is planned for next year’s exam.

All of this is part of a wider push in the country to diversify trade in the United States, reduce barriers that have embarrassed trade between the provinces and advance major projects.

Economic ties between the two countries will remain strong – Canada will still be one of the largest trade partners and economic and security allies in the United States.

But the irony is that Trump’s threats could “force Canada to understand that we have to put our own economic home in order,” said Hall Findlay.

“It will make really difficult decisions. And I think our current government gets this.”