Ilya Gridneff: Prime Minister Mark Carney has repeated that Canada’s old relationship with the US was “over” and vowed that there would be a “broad renegotiation” of the trade agreement that has defined North America for decades.

Canada’s prime minister sought to cool expectations about reaching a trade agreement with the US in the next 10 days, saying the talks are difficult because the Trump administration keeps changing its goals.

Trump wrote to Carney to inform him that, from August 1, Canada will face a 35 percent import tariff after the two sides failed to reach a deal during the recent pause. The American leader said he would consider revising the 35 percent tariff "if Canada works with me to stop the flow of Fentanyl".

Under normal circumstances, the governor of the Bank of Canada and the prime minister meet formally on occasion, a careful arrangement that allows them to touch base on the state of the economy while preserving their respective jurisdictions over monetary and fiscal policy.

President Sheinbaum and Canada PM Carney have agreed to strengthen Mexico-Canada trade relations in light of US tariff threats.

The letter reiterated Trump’s complaints about dairy quotas, fentanyl and the U.S. trade deficit, which is mostly fueled by American refineries’ thirst for Canadian oil. His social media post caused the Canadian dollar to immediately tumble, indicating the market wasn’t expecting this escalation.