Canadian Prime Minister Mark Carney has expressed optimism about upcoming trade negotiations with the United States following the imposition of a 35% tariff on Canadian goods not covered under the USMCA by the Trump administration. Canada announced up to C$1.2 billion ($870 million) in aid to support its softwood lumber industry affected by U.S. countervailing and anti-dumping duties, including C$700 million in loan guarantees and C$500 million for product development and market diversification. Carney emphasized Canada's commitment to the USMCA while seeking a broader trade deal with the U.S. He also indicated ongoing discussions to reinforce the competitiveness of the American auto sector and mentioned the possibility of removing some Canadian tariffs to help domestic industries. In response to escalating trade tensions, Carney has been holding virtual meetings with his cabinet and provincial premiers to coordinate Canada's strategy. Additionally, Canada is working to repair its relationship with Mexico, which has been strained amid U.S. tariff threats ahead of a planned review of the North American free-trade pact. On the defense front, Carney announced a 20% increase in military starting pay as part of a broader effort to boost Canadian defense spending by C$12 billion ($9.3 billion) before the end of the fiscal year, aiming to meet NATO's 2% spending target. This includes a $2 billion investment in military salaries to improve recruitment, retention, and force readiness. Carney plans to engage in direct talks with President Donald Trump when conditions are appropriate to address the ongoing trade disputes.