No trade deal with U.S. better than a bad one: Canadian business groups

Vehicles approach the United States border crossing as seen from Saint-Bernard-de-Lacolle, Que., Thursday, April 10, 2025. THE CANADIAN PRESS/Graham Hughes

Canadian business groups anxiously watching trade negotiations with the U.S. don’t want the country to rush into a deal but say the uncertainty is weighing on their members.

After U.S. President Donald Trump applied 35 per cent tariffs to many Canadian goods overnight, groups representing Canada’s small businesses, steel producers and more spent Friday hammering a unified message: “no deal is better than a bad deal.”

“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.

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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 bore 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.”

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 steel workers.”

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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.”

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Tara Deschamps, The Canadian Press

With files from Alessia Passafiume in Ottawa

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