The Canadian prime minister said it may not be possible to escape U.S. tariffs even with a bilateral agreement to resolve the current tariff row.

The two countries are aiming for a 1 August deal even after Trump announced a new 35% tariff on imports from Canada last week.

Trump threatened to escalate tariffs beyond 35% if Canada opts to retaliate with tariffs on U.S. goods. Canadian goods are also subject to sector-specific tariffs, such as 50% levies on steel and aluminum as well as 25% tariffs on non-USMCA compliant autos and auto parts.