TMTPOST -- Canada   seems gearing up for prolonged trade   talks   after U.S. President Donald Trump   on Thursday issued threat of new   tariffs and   suggested   a new deadline for tariffs.

Credit：Xinhua News Agency

Canada   will push back   its plans   to impose   further retaliatory tariffs on U.S. steel and aluminum as Trump ’ s recent letter dictating higher tariffs extended the deadline for trade negotiations between the two North American neighbors, the Politico reported   on Friday.  

The   Canadian   government previously   planned   to   double its countertariffs   on U.S. steel and aluminum exports, from   25%   to 50%,   and now it   will not further the retaliation on   July   21, the previous deadline for the talks,   after Ottawa   and Washington agreed to extend the deadline   to August 1, the report cited   two senior government   officials.

August 1   is the effective date   of a   35%   tariff   that   Trump   in his letter to Canadian   Prime Minister Mark Carney   announced.   It   is also the new deadline   of trade talks that Carney revealed following the   letter.

Starting August 1, the United States will charge Canada a tariff of 35% of all Canadian imports, separating from all sectoral tariffs, according to screenshots of a letter Trump posted on Thursday.

Trump in the letter claimed the new tariffs   resulted from Ottawa ’ s retaliation. "As you will recall, the United States imposed Tariffs on Canada to deal with our Nation ’ s Fentanyl crisis, which is caused, in part, by Canada ’ s failure to stop the drugs from pouring our Country. Instead of working with the United States, Canada retaliated with its own tariffs"   Trump wrote.

Trump in the letter also described   the trade deficit as "a major threat "   to U.S. economy and national security, which was caused by Canada ’ s   tariffs   and other   trade barriers.

Carney late Thursday said Canada will continue the trade talks with the   U.S.   towards   "the revised deadline of August 1."   Carney said on his social media that throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended the workers and businesses.

Canada has made vital progress to stop the scourge of fentanyl in North America, Carney   said, affirming Canada's commitment to continuing to work with the United States to save lives and protect communities in both countries.

Trump   on Friday claimed he had   shared the proposal with   Canadian   officials a   day before.   "They called, I think it was fairly well received, but we have what we need, so, we ’ ll see what happens," Trump said while departing the White House en route to flood ravaged Texas, not   clarifying whether   or   which   Canadian imports would receive exemptions   from the upcoming   35% tariffs.  

"We ’ ve been taken advantage of for many, many years by countries both both friend and foe," Trump said before boarding Marine One. "And frankly, the friends have been worse than the foes in many cases. So I would say just keep working. It ’ s all going to work out."

Trump ’ s threatened   35% tariffs   on Canada would most likely only apply to   those traded outside the U.S.-Mexico-Canada Agreement ( USMCA ) , the   Globe and Mail cited a U.S. government official   later Friday.   And the new tariffs are   also not expected to   cover oil, gas and potash   traded outside the   USMCA, which now face 10%   tariffs, according   to the   official.  

The Politico   learned from a White House official that the Trump administration plans to impose the 35%   tariffs   only on goods that do not comply with the USMCA, though   decition   of the ultimate   details   will be up to   Trump.

Later Friday, White House trade adviser   Peter Navarro   also   floated certain exemptions for good   under the USMCA. Navarro   in an interview with Bloomberg   said the tariffs did not cover goods imported under the   agreement, and the 35% rate would be an increase from the current 25% tariff on imports from Canada.

Navarro encouraged Canada   to continue negotiating with the U.S. to lower trade barriers   and   cast the Northern neighbour as a challenging negotiator.   He said   "the Canadians were very, very difficult, and they've always been very difficult" in comparison to Mexico, which he described as "pure joy to deal with" during trade talks.

USMCA is a trade agreement that Trump's first administration negotiated to replace the decades-old North American Free Trade Agreement. The United States has put in place a 25% tariff on all goods, and 10% on energy and potash that isn't covered by USMCA. There's another 50% levy on Canadian steel and aluminum, and 25% on automobiles that aren't covered by USMCA.