Canada's Prime Minister Mark Carney has described the ongoing trade negotiations with the United States as being in an "intense phase," emphasizing that a trade deal without tariffs is unlikely. This development follows U.S. President Donald Trump's recent announcement of a trade agreement with the European Union. Carney expressed disappointment over the United States' decision to increase tariffs on Canadian exports, including a 35% tariff on certain goods, but reaffirmed Canada's commitment to the United States-Mexico-Canada Agreement (CUSMA), which is the world's second-largest free trade agreement by trade volume. Former Canadian Prime Minister Stephen Harper, who was consulted by Carney's government, advised diversifying trade partnerships beyond the United States. Business groups from Ontario and Michigan have warned of a potential crisis if Canada and the U.S. fail to reach a trade deal, though they also noted that no deal is preferable to a bad deal. Despite the tariff tensions, Carney stated that Canada remains focused on strengthening its economy and continuing negotiations with the U.S. while managing what it can control. Provincial premiers expressed disappointment with the U.S. tariff increases, though most Canadian exports remain duty-free under current agreements.