Canada Loses in Trade War with Trump and Faces Uncertain Future
Canada faces renewed trade pressure from President Trump
Canada’s trade negotiations hounded by Trump tariffs
Overnight Thursday, President Donald Trump threatened to impose a 35% tariff on Canadian imports starting August 1. A Trump administration official confirmed that products covered by the United States‑Mexico‑Canada Agreement (USMCA) would remain exempt.
- Canadian exporters still eligible under USMCA
- Trump’s tariff threat aimed at “unfair trading practices”
- US‑Canada trade talks now stalled
Historical context: Canada and the United States in trade
For decades, Canada has been a key trading partner and ally of the United States. Yet, in Trump’s second term, the two nations find themselves under a “bull’s eye” as the former president seeks to reorganize the global free‑trade system by slapping tariffs on both friends and foes.
Trump’s rhetoric on Canada
- Repeated calls to absorb Canada into the United States as a 51st state
- Statements deemed “repugnant” by the Canadian public
- Trump’s first attacks after taking office sparked immediate backlash
Diplomatic shifts under new Canadian leadership
In late April, Canada elected Mark Carney in place of Prime Minister Justin Trudeau. Carney pledged to stand up to Trump, defend Canadian jobs, and protect borders. The two leaders met twice in a more cordial tone, once at the Oval Office in May and once at a Group of Seven summit held in western Canada last month.
The new trade agreement aspiration
Carney and Trump’s second meeting resulted in an agreement to sign a new trade accord by July 21. However, in late June, Trump abruptly canceled the talks, citing a new Canadian tax on U.S. Big Tech companies. Canada rescinded the tax two days later, allowing the negotiations to resume. Trump’s latest threat — a 35% tariff on Canadian goods — has put the talks on shaky ground once more.
Canadian response to Trump’s threats
Carney, in response to the most recent outburst, simply said, “the Canadian government has steadfastly defended our workers and businesses.” In Canada’s public sphere, Trump’s negotiation style elicits contrasting reactions. Some attribute a firmer response, while others prefer to continue negotiating.
- Some Canadians demand a tougher stance against U.S. pressure
- Others advocate for continued dialogue and compromise
Academic perspectives on Trump’s strategy
Philippe Bourbeau, a professor at HEC Montréal, emphasizes that Trump’s tactics are strategic:
“You can criticize the aggressiveness of the announcements and the fact that it is done out in the open, but it is a negotiation tactic,” Bourbeau said. “The relationship between the two countries is asymmetrical; Canada will have to give more to reach an agreement.”
Genevieve Tellier, a political science professor at the University of Ottawa, echoed that sentiment:
“Donald Trump sees us as vulnerable; he increases the pressure to secure a win on tariffs.”
Export trends amid the turmoil
Before Trump’s arrival, roughly three‑quarters of Canada’s exports flowed to the United States. That share fell to 68% in May, a record low, as shipments to other countries climbed to unprecedented levels.
