In response to U.S. tariffs, Canada enacted counter-tariffs on tens of billions of dollars worth of U.S. goods, although Prime Minister Carney chose not to retaliate against recent tariff increases.

These counter-tariffs were later lifted by Ottawa, signaling a desire to reset the trade relationship.

The ongoing trade dispute has created challenges for businesses and consumers in both countries, with rising costs and supply chain disruptions reported by companies reliant on cross-border trade.

The discussions are taking place against a backdrop of previous tensions during Trump's first term, which included significant tariffs on imported steel, aluminum, and automobiles.

Hoekstra emphasized that the resolution of these negotiations would strengthen trade relations and improve conditions for both countries.

He believes that a mutually beneficial trade deal is achievable, allowing both leaders to return to their citizens with favorable agreements.

During an Independence Day event in Ottawa, Hoekstra reiterated his confidence, stating, 'We’re going to get through this,' indicating that the negotiations will strengthen bilateral relations.

The existing trade pact among the U.S., Canada, and Mexico is currently under strain due to Trump's imposition of 50% tariffs on foreign steel and aluminum, along with additional levies on cars and trucks.

Hoekstra stated that both President Trump and Prime Minister Carney would be able to return to their citizens with favorable agreements for their respective countries, leading to a 'win-win' situation.

US Ambassador to Canada Pete Hoekstra expressed optimism about a new trade deal between the US and Canada, anticipating a 'win-win' outcome from high-level negotiations involving President Donald Trump and Prime Minister Mark Carney.

A deadline of July 21, 2025, has been set for reaching a new trade agreement between the two nations, focusing on contentious issues such as tariffs and digital taxation.

Negotiations were briefly halted due to US objections over Canada's digital services tax, but resumed after Canada announced its intention to scrap the tax as part of a broader negotiation strategy.