Canada is pairing intensified diplomacy with fresh industry support after Washington raised tariffs on some Canadian exports to 35% when the two sides missed an Aug. 1 deadline for a new trade accord. Trade Minister Dominic LeBlanc told CBS News he remains “encouraged” by talks with U.S. officials and said a deal that rolls back at least part of the levies "is an option." Ottawa expects Prime Minister Mark Carney and President Donald Trump to speak in the coming days, a Canadian official said, while the U.S. ambassador cautioned that negotiations could still “take a while.” In the meantime, Carney unveiled up to C$1.2 billion (US$870 million) in assistance for the softwood-lumber sector, which faces a jump in combined U.S. anti-dumping and countervailing duties toward 34.5%. The package includes as much as C$700 million in federal loan guarantees and C$500 million for product development and market diversification. Carney said the measures are designed to reduce dependence on the U.S. housing market and to blunt the impact of the higher duties. Carney also signalled flexibility on Canada’s own counter-tariffs, saying Ottawa could drop some measures if that helps domestic industries, even as he reaffirmed commitment to the USMCA framework. He stressed that more than 85% of bilateral trade remains tariff-free and vowed that “no industry will be sacrificed” in the negotiations. While both capitals prepare for a leader-level conversation, officials on each side describe the talks as constructive but complex. Business groups and provincial governments are watching closely for signs the discussions can ease mounting costs for lumber, auto parts and other goods caught in the cross-border dispute.