In a post on his X (formerly Twitter) account, Carney stated that his government would "steadfastly" defend workers and companies in response to Trump's recent trade threats against Canada. He added that Canada would continue working to secure a trade deal with the U.S. by an adjusted deadline of August 1.

The announcement came after President Trump threatened on Thursday to impose 35% tariffs on Canadian imports starting next month, causing Toronto's stock market to decline on Friday—even as investors assessed positive Canadian employment data for June.

The S&P/TSX Composite Index fell 0.3% at closing to 26,999.13 points, ending a two-week winning streak.

In a message sent to Prime Minister Carney on Thursday, Trump warned: "If you decide for any reason to raise your tariffs, any amount you choose will be added to the 35% we are imposing."

Trump justified the tariffs by citing the fentanyl crisis in the U.S., claiming the problem is "partly due to Canada’s failure to stop the flow of drugs into our country." He argued that "Canada has not done enough" to curb fentanyl trafficking, adding: "If Canada cooperates with me to stop the fentanyl flow, we may reconsider this message. These tariffs could be adjusted—up or down—depending on our relationship with your country."