Prime Minister Mark Carney is downplaying expectations that Canada and the United States will clinch a new economic and security pact by the self-imposed 21 July deadline. Speaking in Brussels on 23 June, he said “the right deal is possible, but nothing’s assured,” tempering the 30-day target he and President Donald Trump set at the 16 June G7 summit in Kananaskis. Carney has warned that, failing an accord, Ottawa will raise existing counter-tariffs on U.S. steel and aluminum, bar American suppliers from federal contracts and pursue other retaliatory steps starting 21 July. Washington already levies 145 % duties on Chinese goods, and Trump has suggested he could impose fresh measures against Canada if talks stall. The negotiations have grown more complex since Parliament passed Bill C-202 on 26 June. The legislation prevents Canada’s foreign affairs minister from agreeing to larger import quotas or lower duties for dairy, eggs and poultry—pillars of the country’s supply-management regime. Trade lawyers say the law is politically potent even if it can technically be overridden, leaving Ottawa “negotiating with one hand tied behind its back.” Ottawa has made one concession, shelving a digital services tax on U.S. technology firms after Trump threatened new tariffs. Yet dairy remains the chief irritant. Canadian tariffs on over-quota U.S. dairy shipments can exceed 200 %, a level Trump has called “tremendously high.” Analysts cited by Reuters on 3 July warn that the supply-management issue could derail the broader deal. “At the end of the day, a Canadian government is going to do what it needs to do,” said Tyler McCann of the Canadian Agri-Food Policy Institute, while trade lawyer William Pellerin called a compromise “certainly more difficult” under the new law. With less than three weeks left, both capitals must decide whether to dilute long-standing dairy protections or brace for another round of tariffs.