Okay, good morning everyone. Bonjour. I'd like to take this opportunity to update Canadians on developments in our trade negotiations with the United States. I'm going to go through why we're walking away from a bad deal and what comes next.
We can't control the storm that blows in from Washington. We can, however, chart a new course by building Canada strong at home and diversifying our trading relationships abroad.
For over a year, Canada has worked intensively and in good faith with the United States to negotiate a new comprehensive trade deal. We've been pragmatic, patient, and persistent. We pursued every opportunity to reach an agreement that protects Canadian workers and their families, that strengthens our economy, and that respects Canadian sovereignty.
We've been under no illusions. We recognized from the start that America has changed. Early last year in this room, I observed that the decades-long process of steadily increasing integration between our economies was over. Our government understood before many that America would transform all of its commercial relationships, that it would put a series of tariffs on its closest allies and use economic integration as a weapon.
We recognized that sometimes its signature was written in pencil. We worked in that context to try to strike a fair deal on which Canadian businesses and workers could rely. Our goal has always been to get the best deal for Canadians, never a deal at any price or on any time frame.
Last month, when the United States announced another round of unjustified tariffs, I gave our negotiating team a new mandate to seek a fair deal negotiated in good faith, because I believe that people on the ground on both sides of our border want this relationship to work. The bonds between Canadians and Americans are long and they remain strong.
A mutually beneficial trade agreement is possible. One that respects our sovereignty. One that builds on our complementary strengths. One that lowers costs for families on both sides of the border. One that creates good jobs for our workers.
Canada has always worked towards these goals, even while America's attention and dedication to them have wavered. We've consistently proposed long-term partnerships while America has often pursued short-term transactions.
The gap between partnership and competitor unfortunately has remained too wide in recent days. So last evening, I instructed our negotiators to return to Ottawa. We cannot accept what they've offered and we will not give what they've asked.
Over the past year, the US has imposed a series of tariffs that violate its commitment under our agreement with them and Mexico, so-called KUSMA. The United States has continually changed the rationale for these actions. From fentanyl to taxes on US tech giants to certification of US aircraft to the sharing of tolls of a bridge that Canada built and paid for to our dairy policy to provincial decisions not to sell American alcohol during a trade war to a television advertisement that quoted Ronald Reagan to smoke from wildfires, while they threatened our communities.
Another prominent justification for US tariffs has been their claim that since the United States runs, quote, a trade deficit with Canada, we were ripping them off. Also a quote. But the US's narrow merchandise trade deficit only exists because the US buys so much of its energy from Canada.
Canada fuels American growth, supplying 99% of their natural gas imports, 85% of their electricity imports, 60% of their crude oil imports. I don't think they want us to stop sending any of that energy.
And if you look more broadly at the comprehensive US-Canada trade balance, which includes the many services from finance to entertainment that we buy from the United States, that shows a persistent American trade surplus.
Most fundamentally, trade is about building mutual strength, creating a relationship that benefits both countries. For example, Canada is the largest customer for US cars. In fact, we buy more American-built cars and trucks than the United Kingdom, Japan, and China combined. It's the same for American steel products. Canada is also the largest customer for 26 US states and a top three customer for 45 US states. Last year, Americans sold almost $600 billion in goods and services to Canadians. That's more than $1.6 billion every single day.
On the other hand, Canadian exports to the United States lower costs for American families. In contrast, tariffs are taxes, taxes which are ultimately paid by US consumers.
While the United States has imposed a seemingly endless stream of tariffs and threatened war, Canada has, by contrast, taken several steps in good faith to try to find compromise and secure a comprehensive deal in the best interests of both Canadians and Americans.
Last month, the US announced that effective August 19th, it would impose 50% tariffs on a series of industries ranging from hockey equipment to clothing, cement, and beer. The only advantage of this latest threat was that it was a catalyst for more intensive negotiations.
Our objectives in these latest talks have been to preserve tariff-free access to the US for the vast majority of Canadian businesses. Secondly, to provide greater stability to our trade relationship. Thirdly, to significantly reduce US tariffs on our key strategic industries so that Canadian businesses in these sectors would have the best access of any in the world. Fourth, protect our small and medium-sized businesses, including by removing the imminent threat of those new tariffs. And fifth, fundamentally, maintain Canada's flexibility, independence, and sovereignty so we can keep building the country Canadians want.
Canada has made offers to secure a fair, comprehensive deal that would be in the best interests of Canadians. We were willing to drop our remaining retaliatory tariffs on strategic sectors, particularly steel, aluminum, and autos, if the United States substantially lowered theirs to levels that made it economic for Canadian companies to export to the United States.
In exchange for a fair deal, we would encourage our provinces to return US alcohol to the shelves. And we would take administrative measures to protect supply management without changing the system itself, the US quotas, or the tariffs that would apply.
There were some things we wouldn't do. We were not prepared to compromise Canada's sovereignty or to undermine our key industries.
Now, in recent weeks, there had been important progress made towards a possible agreement, an agreement that would have reinforced Canada's position as having the best deal in the world with the United States, including by securing the best terms for each of our most important strategic sectors and by providing greater certainty about our future trading relationship.
And while we believed earlier this week that we were moving towards a mutually beneficial agreement, in recent days, the United States proposed new terms that were uneconomic, unfair, and undermined the net benefits for Canada and called into question the reliability of any deal.
In short, they asked too much and they offered too little. More fundamentally, the cumulative effect of US demands revealed the limits of their commitment to a true economic partnership.
As I said earlier, as a result, last evening, I suspended trade negotiations with the United States and directed our negotiators to return to Ottawa. I want to thank Minister LeBlanc and our chief negotiator, Janet Sherret, and their team. They've worked hard in good faith right up to the last minute to defend the interests of Canadians.
Now, Canada will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses. Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. It will also include products that are currently subject to unjustified Section 232 and 338 tariffs.
This is a focused response to protect and defend our industries and allow them to compete with US products in the Canadian market. In the coming days, we'll release details of these new tariff measures, which will come into force the Tuesday after Labour Day.
Let me be clear. We take this step reluctantly. Reluctantly because we recognize that some of these measures will raise costs and reduce choice for Canadians. Reluctantly because we recognize that some US companies and some US states are innocent bystanders in a dispute that they did not want. Reluctantly because this trade dispute is preventing Canada and America from doing so much good that we could do together.
But at the same time, we take this step confident that it is in the best interest of Canada and that by rejecting a bad deal, by standing up for Canada, by focusing on what we can control, we will build Canada strong for all.
Building at home and diversifying trade abroad is not our plan B. It has been our plan A from the start. Canada will continue to pursue this path to build Canada strong because it's right and because it's working. We're moving rapidly to build major infrastructure. We've already referred 27 nation-building initiatives to the new major projects office, new ports, mines, energy corridors from every region of the country that now represent $500 billion in new private investment. Projects that will help Canada build bigger, move faster, and trade more with the world.
Just last Monday in St. John's, the governments of Canada, Quebec, Newfoundland, and Labrador launched the single largest investment in Canada's history to build the largest clean energy project in North America ever, in Gull Island. It will produce enough clean electricity to power every single vehicle in Canada.
We're building our economy while taking charge of our security by investing half a trillion dollars into our defense, expanding our shipyards, growing our aerospace industry, increasing our cyber capabilities. And we're realizing Canada's full potential as an energy superpower in nuclear, LNG, renewables, and low-carbon oil and gas. These are the initiatives that are the future of our country.
Canada is now the best connected economy in the world. Over the last year, we have signed more than 20 trade and security deals across five continents. We completed our most recent deal with the United Arab Emirates in a record 47 days. Canadian businesses now enjoy tariff-free access to 1.5 billion consumers. Over the next 6 months, we'll double that number through new trade deals from ASEAN to India.
Canada is building such unparalleled market access because we're trusted, because we're reliable, and because we have what the world wants. That's why the world is coming to our door. In just three weeks, we'll host the first Canadian investment summit in Toronto. The summit is attracting the world's largest investors who collectively manage over $100 trillion in assets. When they get here, they'll find a Canadian economy that has never been more connected or more ambitious.
This fall in Budget 2026, we will go further to make Canada even more competitive and attractive for businesses and strategic investors to build, invest, and grow.
The new US tariffs are designed to hurt us and divide us. They're a miscalculation. They're a miscalculation because Canadians will always take care of each other. We know we're stronger together.
In the last year and a half, Canadians have met this moment with resolve, with purpose, with strength. In many ways, vacationing in national parks, buying Canadian products, choosing Canadian. Small acts of solidarity repeated millions of times that make a statement: we're masters of our destiny.
This government is matching that spirit with $25 billion to protect Canadian workers and businesses hurt by American tariffs. We're helping small and medium-sized businesses respond by investing in equipment, productivity, and supply chain resilience. And we're financing large companies to keep large employers operating and to retain their workers. We're helping those hardest-hit industries retool and pivot to those new international markets. And we are being our own best customer.
We have the right plan to build Canada strong. We're on track and it's working. At the same time, we recognize that some of the biggest payoffs of this plan, of this transformation, will take time. And that's why we're also focused on giving Canadians a boost today and a bridge to that better tomorrow. So, we've cut taxes on incomes, on housing, and on gas. We've introduced the Canada Groceries and Essential Benefits, up to $1,890 per family, helping 12 million Canadians get ahead.
We're stronger now than when the United States started this trade war. More unified, more determined, more ambitious. With the strongest fiscal position in the G7 and a resilient economy, Canada has all the resources we need to pivot and to prosper.
Growth is accelerating. We're projected to have the second fastest rate in the G7 this year and next. We are creating jobs in this economy at four times the rate of the United States. Our non-US exports are up sharply. They're on track to double over the next decade. Foreign direct investment in Canada is at its highest level in two decades. It's running at twice the rate of our nearest G7 competitor. Canada now ranks as the most attractive country in the world for infrastructure investment.
Last spring, I warned that America is trying to break us so they can own us. And I promise that that will never ever happen. We are keeping that promise. Canada is becoming stronger and less dependent on America. We are already giving ourselves more than they can take away. And we are just getting started.
As we observed earlier this week in St. John's, Canadians don't submit to the weather, we thrive in it. We don't wait to see which way the wind's blowing or surrender ourselves to the waves to be storm-tossed by events. We set our own course. We make our own weather.
Thank you very much and I look forward to your questions.
