What happens on Aug. 1 if Canada can’t get a trade deal with Trump?

'We're seeking the best deal for Canadians. We have not yet reached that deal. Negotiations will continue until we do,' Prime Minister Mark Carney told reporters on Wednesday.

There is less than a day to go until the target date for a tariff deal between Canada and the United States — but both Prime Minister Mark Carney and U.S. President Donald Trump are indicating that a deal is unlikely before Friday.

Some economists say reaching a deal quickly is crucial, but not “fundamental” to Canada’s economic prospects for the year.

In July, Trump delayed his slew of global “reciprocal” tariffs, including those on Canada and Mexico, to Aug. 1 with the intention of signing individual trade deals with hundreds of countries.

Later that month, in a letter to Carney posted to Truth Social, Trump threatened a 35 per cent tariff on “Canadian products sent into the United States, separate from all Sectoral Tariffs.”

“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 35 per cent that we charge,” the letter adds.

This would raise the tariff on Canadian exports to the U.S. that are not compliant with the Canada-U.S.-Mexico trade agreement (CUSMA) to 35 per cent – not including tariffs on specific sectors, like automobiles, steel and aluminum.

The new tariff would take effect on Aug. 1, Trump said.

White House press secretary Karoline Leavitt said on Thursday that Trump could still ink some last-minute deals.