Analysis July 31, 2026

The Trade Brief: No days off

Sarah Alrifai – Digital Communications Strategist, Business Council of Canada

Canada’s Place in the World Global Affairs International Trade North America

Author’s note: I want to point out that the Trade Brief has officially hit its one-year anniversary!🎉🥳

One year that, with the highs and lows experienced in the trade file, may have felt like ten at times.

We’ve got something cool on the horizon to mark the milestone so, keep an eye out.

Thank you to everyone who reads, shares and forwards this newsletter. If you’ve enjoyed it, tell a friend. Trade can be confusing, but working through it together builds character.

FIFA is over. Love Island is over. The group chats have gone quiet.

As the world collectively entered the dog-days of Summer and its entertainment withdrawal, trade decided to compensate by becoming even more dramatic.

July gave us:

A return of tariff diplomacy
USMCA still working on its relationship issues
Canada’s global side quests
Around the world in agreements

tariff trifecta

Bad things often come in threes, so do tariffs.

On July 19th, President Trump threatened new tariffs on Canada citing the wildfire smoke and Canada for “not properly maintaining their Forests”.

July 20th: 50% tariffs were announced and could be coming into effect on August 19th. Washington claims Ottawa is using “discriminatory” trade practices by putting Canadian tariffs on American goods like alcohol, autos and dairy imports.

The bigger surprise? Some products covered under CUSMA may not be spared.

Gasp.😲

And thus, Section 338 of the Tariff Act of 1930 was invoked.

Section 338 ostensibly allows the President to impose tariffs of up to 50% by the U.S. if other countries are deemed to be treating the U.S. unfairly.

July 23rd: The U.S. decided to sprinkle a fresh set of 10% to 12.5% tariffs on 60 more countries, arguing they have not done enough to prevent goods made with forced labour from entering supply chains.

The twist: The administration is pursuing a new route after the Supreme Court blocked its previous tariff strategy earlier this year. Critics argue labour enforcement is being used as a backdoor to achieve broader protectionist goals.

Not very demure. Not very mindful.

Other tariff news:

What we’re watching? Potential tariffs for the 🇪🇺European Union. Especially after the EU slapped Google with $1 billion in fines, adding another round of friction to an already strained relationship.

🇧🇷Brazil gets hit with 25% tariffs on their exports that took effect on July 22nd.
- Brazil is disputing and taking these tariffs to the World Trade Organization calling the measures unjust and inconsistent with global trade rules.
  - One thing they can celebrate is that they’re heading towards their largest trade surplus ever.🎉

USMCA UPDATE: YEAH,…ABOUT THAT

So, in the previous Trade Brief, we gave a Tl; DR of USMCA but plot twist: it’s far from over.

Drama renewed itself for another season, unlike the agreement. 👀

The U.S. decided not to renew USMCA for another 16 years until the issues and shortcomings (we mentioned in the last Trade Brief) are addressed.

But now Canada and Mexico are having separate conversations with the U.S. hoping no one leaves the chat just yet.

CANADA + ?

Canada’s not doing too bad recently. Dare I say things are looking up..ish

“Talk to me, Goose”🇬🇧🇮🇹🇯🇵:

Canada officially joins the U.K., Italy and Japan’s Global Combat Air Programme (GCAP) as an observer to the development of the 6th-generation stealth fighter jets expected in 2035.✈️

Observer status gives Canada access to classified conversations and lets it explore how Canada can help build the aircraft.

Why does his matter? Beyond the jets themselves, the move signals Canada’s growing interest in diversifying defence partnerships beyond Washington.

Aye, Aye, Captain 🇩🇪:

Canada has picked Germany’s ThyssenKrupp Marine Systems (TKMS) as its choice for a new fleet of submarines making it the largest defence procurement in Canadian history.🚢

This helps cover the three oceans surrounding Canada and deepens the defence partnership with Europe.

Beyond the barrels 🇸🇦:

After a 26-year gap, a Canadian Prime Minister is back in Riyadh.

Prime Minister Carney’s trip to Saudi Arabia focused less on geopolitics and more on business, investment and economic cooperation.

Here’s what came out of it:

📜13 agreements worth more than $1 billion
🪙Possible pension fund investments into the Kingdom’s growing economy
⚡And more chats about critical minerals, mining and energy

Canada has certainly caught the attention of foreign investors.

The challenge now? Giving them something to invest in.

Exhibit A: Remember when the UAE pledged $70 billion to invest in Canada?

The💵 is there, waiting on the sidelines. The projects? Are still stuck between announcement and approval.

⌛Tick, Tock. ⌛

Ecuador unlocked 🇪🇨:

Canada and Ecuador are going to be signing a Free Trade Agreement aimed at reducing tariffs, trade barriers and creating more business opportunities.

⭐Fun fact: this relationship is bigger than many people realize.

Canada and Ecuador exchanged roughly $2 billion in goods in 2025
Ecuador is Canada’s 6th-largest trading partner in South America

Pacific pivot 🇵🇭:

Canada and the Philippines are deepening their relationship and aim to finalize an FTA by the end of the year after PM Carney welcomed President of the Philippines Ferdinand Marcos Jr. to Vancouver earlier in the month.

The relationship is expanding beyond trade too.

🤝Cooperation on energy and critical minerals
💪Stronger defence ties
🪖Expanded military cooperation and joint training

Call it diversification, call it friend-shoring. Can’t deny Canada is on a roll.

ALL AROUND THE WORLD

U.K- India: the free trade agreement is now official.
- 99% of Indian exports entering U.K. and 90% of U.K exports entering India will now be duty-free and face lower tariffs.
Türkiye-Ukraine: July 14th marked the ratification of a free trade agreement between 🇹🇷 & 🇺🇦 after 2 decades of negotiations.
- Turkey is set to eliminate tariffs on 93% of Ukrainian industrial goods and Ukraine will open up their markets to more Turkish products.
Brazil-Mercosur- Singapore: Brazil and the Mercosur bloc are making their first ever trade deal with a Southeast Asian country.
- The agreement gives 100% tariff-free access to Mercosur exports entering Singapore.
  - Brazil sees big potential in sectors like oil, refined fuels, agriculture and logistics, with Singapore acting as a major gateway into Asian markets.

The sweet spot:

In a weird turn of events, America will get the good coke. Clarifying, it’s coke as in Coca-Cola.

Coke in many other parts of the world hits different because it’s sweetened by cane sugar and not corn syrup.

Why is this a trade issue?

President Trump’s health secretary Robert F. Kennedy Jr. has repeatedly cited his health concerns about corn syrup, and the push from President Trump to curb its use gave Mexico a big win.

After years of restrictions, the U.S. is opening a bigger door for more Mexican sugar imports.

The U.S. is expected to import up to 1.15 million tonnes of Mexican sugar in 2026-27, a 512% jump from the 2026 season.
This move could boost Mexico’s sugar industry by up to 4.76 billion pesos ($272 million), benefiting around 170,000 sugarcane producers.

Trade just got a little sweeter.