This marks the first time Carney has acknowledged that a pact to end the Canada-U.S. trade war would leave some of Mr. Trump’s tariffs in place

“Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” Canadian Finance Minister François-Philippe Champagne said in a statement Sunday night.

Mahon also pointed out that Canada's strategic space is constrained by its economic ties to the United States. "The most important constraint is Canada's ongoing economic and security negotiations with the United States," he said.

President Donald Trump has announced a substantial increase in tariffs on Canadian imports, escalating ongoing trade tensions. The decision to raise tariffs to 35% comes as Trump pressures Canada on issues like fentanyl trafficking and trade deficits.

Fourth of July party hosted by the U.S. ambassador to Canada occurred this year amid strained relations and resurgent Canadian patriotism.

Canada is seeking to finalize a free trade deal with Southeast Asian nations as part of a push to expand into new markets, its top diplomat said, responding to the hefty tariffs imposed on it by the United States,