Canadian businesses are hoping for clarity on trade as the Aug. 1 deadline for a deal with the United States bears down, but the stakes vary widely depending on how directly the American levies — some as high as 50 per cent — are hitting individual sectors.

“Business sentiment is blowing hot and cold, depending on which sectors you’re talking to,” said Avery Shenfeld, chief economist at CIBC Capital Markets. “There are industries that are still

facing high tariffs and for whom exports to the U.S. are a major slice of their business, while others still shipping tariff-free and in some cases gaining an edge versus overseas producers who are facing U.S. tariffs.”

Canadian Prime Minister Mark Carney and U.S. President Donald Trump both said they were working towards a Friday deadline for a new trade agreement, with Carney hoping to remove the steep tariffs on autos and commodities but acknowledging it would be difficult to do a deal with the United States administration without some tariffs. On Wednesday, Carney said at a news conference that it was possible negotiations would not conclude by that date and, late Thursday, Trump announced a tariff hike to 35 per cent on some goods.

Any delay would add to the pain facing Canadian auto, steel , aluminum , and lumber sectors, which are facing double-digit tariffs, with a more recent 50 per cent levy imposed on steel and aluminum in June and new tariffs announced this week on some copper products.

Other sectors have so far escaped tariffs because they are compliant with an existing trade pact between the United States, Canada and Mexico. (It was intended to be binding for another decade but will be reviewed next year and possibly renegotiated.)

As a result of the trade pact, the Bank of Canada estimates that all of Canada’s energy imports and as much as 95 per cent of other exports are protected from the tariffs under the existing trade pact between Canada, the United States and Mexico.

Shenfeld said that so long as CUSMA stays intact through the  negotiations with Donald Trump’s administration, it’s likely that around 90 per cent of exports will remain exempt until next year, when CUSMA is scheduled to be reviewed by all three countries.

Measuring the impact of tariffs is a tougher task than many believe, he said, adding that estimates based on the share of total exports from Canada to the U.S. that paid a tariff could be misleading. For one thing, U.S. border points may not have been in a position to collect tariffs but affected importers will nevertheless face a bill later. In other cases, some goods that would have faced high tariffs may not have been shipped, further skewing the numbers, he said.

Given that Trump telegraphed some tariffs ahead of the actual implementation date, there was some stockpiling to front-run the levies.

These factors appear to be at play in the aluminum sector, where U.S. tariffs were ratcheted up to 50 per cent from 25 per cent in June.

Canada produces about 3.3 million tonnes of aluminum every year, and exports nearly 85 per cent of it to the U.S., according to industry estimates.

Jean Simard, president of the Aluminum Association of Canada, an industry group, said his data shows that exports of commodity aluminum products

dropped by 55 per cent in July, while value added aluminum product exports also fell, by 25 per cent.

He predicted that the impacts of tariffs would become more apparent in the coming months as inventories decline and new shipments slow.

“It’s like little animals bringing in food before the winter, and now we’re getting close to spring and there’s nothing left,” Simard said. “Pretty soon, they’re going to have to move out and start foraging, and the food you’re expecting to see is not going to be there, which means you’re going to have spend more.”

Indeed, U.S. Treasury Secretary Scott Bessent said in CNBC interview this week that the U.S. may negotiate to lower aluminum tariffs for Canada because of the potential impact on U.S. companies such as automakers.

The steel industry has been particularly hard, with tariffs hiked to 50 per cent from 25 per cent in June. Even before that, in May, steel production in Canada had declined 30 per cent, leading to 1,000 job losses, according to an industry group.

“The upshot is 50 per cent tariffs essentially close the U.S. market to us,” said Catherine Cobden, president of the Canadian Steel Producers Association.

She has said restrictions on foreign steel imports and other relief measures unveiled by the federal government on June 19 don’t go far enough.

Measuring the impact of tariffs isn’t always straightforward. For instance, finished vehicles produced in Canada face a 25 per cent U.S. tariff, but it can be reduced based on the percentage of U.S.-made auto parts they contain. The net result is that Canadian-made vehicles face a tariff, but oftentimes it is in the 10 to 15 per cent range, according to industry estimates.

Even at that level, tariffs have had an impact in manufacturing plants and corporate offices. In Oshawa, where General Motors produces light and heavy pick up trucks, the company announced it is cutting a third shift in the fall, which is expected to result in around 700 layoffs. Automakers such as Ford Motor Co. are reporting tariff-related losses, but so far the impact has been muted for consumers.

Another complicating factor in measuring the impact is that many firms never bothered to file paperwork to prove their eligibility for CUSMA protections because the tariff they faced before this year was trivial.

“They (are) in process of doing that paperwork now,” Shenfeld said. “There are various estimates floating around about where the final number will land, but its likely that 100 per cent of energy exports, and perhaps 90 per cent of other exports will qualify.”

Meanwhile, he said, some sectors focused on the domestic market are getting a boost.

“(They’re) benefiting from Canadians opting to buy our own products or travel within the country over the summer,” said Shenfeld.

The current muted impact on broader segments of Canada’s economy could change quickly if CUSMA is reopened.

“There are worries about Trump’s trade policy being a moving target,” Shenfeld said.

Gaphel Kongsta, director of international policy at the Canadian Chamber of Commerce, said Canadian businesses are hopeful a new Canada-U.S. trade deal can be struck that will provide relief from existing U.S. tariffs as well as greater predictability for the bilateral trading relationship.

“While missing the Aug. 1 deadline would not preclude further negotiations, it would increase the risk of further entrenching the emerging status quo — a North American trade environment that features significant U.S. tariffs on major Canadian industries and the persistent threat of new unilateral U.S. trade actions,” Kongsta said.

Late Thursday, Canadian Chamber CEO Candace Laing said the Carney government was right to prioritize a “strong, future-focused deal’ over a rushed one.

“A little more time now can deliver lasting benefits for an integrated North American economy and that’s well worth the wait,” Laing said.

Douglas Porter, chief economist at Bank of Montreal, said estimates of the current impact of tariffs are all over the map.

“This is the $64,000 question, which no one can properly answer,” he said. “Besides the sectoral tariffs, we are assuming that nearly 90 per cent of other exports are or will be USMCA compliant. But I understand that the estimates by others run all the way from 90 per cent down to 50 per cent.”

He said the overall mood among businesses is best described as “cautious but not particularly downbeat” with the exception of sectors directly impacted sectors including metals, lumber and autos.

“The general view seems to be that we are already in the early stages of renegotiating CUSMA, with the very real possibility that it will not be renewed,” Porter said.

He said if that happened and Canada was forced to accept a baseline tariff of 15 per cent — as the EU did after going into negotiations with the U.S. without the protections of something akin to the CUSMA pact — it would be likely to weaken the Canadian dollar, which would offset some of the impact on exporters.

It would, however, also lead to a reduction in GDP. “I have to wonder if Ottawa would accept a 15 per cent baseline,” he said. “(It) would make us all a little worse off. Ultimately, it would likely cut the level of GDP by, roughly, two per cent from where it would have otherwise been.”

William Pellerin, a partner in the international trade practice at law firm McMillan LLP, said the fact that a majority of Canadian businesses are able to claim preference on their goods under the existing Canada-U.S.-Mexico trade pact — for now — is cold comfort for some.

“The mood is dour for those Canadian companies currently faced with sectoral tariffs when shipping to the United States,” he said. “It is also dour for U.S. businesses that need to purchase Canadian steel and aluminum for their manufacturing inputs, since they generally have to absorb that tariff, rendering them less competitive.”

As for the future of the CUSMA pact, Pellerin said the deep integration and interdependence of supply chains is something of a double-edged sword for Canada.

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“This unique relationship should, in principle, give Canada greater leverage in negotiations with the U.S. administration than other trading partners such as the EU or Japan,” he said. “However … while the reliance of U.S. firms on Canadian inputs can strengthen Canada’s negotiating position, it also means that Canadian industries, particularly in the steel and automotive sectors, are more highly exposed to adverse outcomes. From our clients on both sides of the border, we know that the stakes in these negotiations are exceptionally high.”