All negotiations on trade with Canada Donald Trump has peremptorily ended – tell Canadian leaders that you find his behavior egregious and that this is why he ended these negotiations. Picture this… Earlier this month, Trump convened a private meeting with Mark Carney, the Governor of the Bank of England and former head of the Bank of Canada. This meeting was supposed to help defuse months of escalating trade strife. The fallout appears to stem from a pro-LNG advertisement that ran in the U.S. It was included in Ontario’s brand new re-election campaign, and Trump claims it illegally uses audio clips from former President Ronald Reagan.
During a meeting at the White House in early October, Trump and Carney discussed the future of U.S.-Canada trade relations. Just like Trump tried to cut a victorious deal with the US-Mexico-Canada Agreement (USMCA) in his first term. Lately, he’s taken a more inflammatory stance on our neighbors to the north. Carney’s initiative to double Canada’s exports to countries outside the U.S. is now under threat due to Trump’s tariffs, which have significantly impacted Canada’s economy, particularly its auto sector.
The Impact of Tariffs
Meanwhile, Canada-adjustment from Trump’s tariffs have hit various Canadian sectors hard, particularly negative impacts on automotive manufacturing in Ontario. Stellantis followed suit last week with the decision to shift a production line out of Ontario to Illinois. Almost everyone views this decision as a direct outcome of the tariffs. This shift underscores the strain that Trump’s trade policies have placed on Canadian businesses, as over three-quarters of Canada’s exports are directed toward the U.S., with nearly $3.6 billion Canadian worth of goods and services crossing the border daily.
In response to the tariffs, the Canadian government retaliated by slapping countervailing duties on specific U.S. products starting in early April. For specific automakers, Canada has established remission quotas. These quotas allow a limited number of foreign vehicles to be imported into the country tariff-free. These measures will likely not come close to counterbalancing the greater economic damage resulting from today’s toxic trade climate.
Controversial Advertisement Sparks Outrage
The storm that started can be traced back to Trump’s reaction to this ad aired on television in the U.S. This attempt featured spliced together, manipulated audio of Ronald Reagan. Doug Ford, Ontario’s Premier, confirmed that the ad was part of a broader advertising campaign aimed at promoting Canadian exports. Trump falsely alleges that the Ronald Reagan Foundation said that Canada illegally ran the ad. He further claims that Canada inaccurately portrayed some of Reagan’s comments on tariffs.
Trump took to social media, stating, “The Ronald Reagan Foundation has just announced that Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs.” He further charged Ontario officials with using this ad to impact U.S. court rulings. He described it as simply one piece of a larger pattern of “egregious behavior.”
“TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.” – Donald Trump
Future of U.S.-Canada Trade Relations
With Trump’s announcement the fate of U.S.-Canada trade relations hangs in the balance. Carney’s goal of increasing Canadian exports is now jeopardized as Trump’s tough stance on tariffs continues to dominate discussions around trade. Ford expressed his commitment to opposing American tariffs, stating, “Using every tool we have, we’ll never stop making the case against American tariffs on Canada. The way to prosperity is by working together.”
Analysts are hopeful that in spite of these quickly worsening circumstances, both sides will continue to work to find areas of cooperation. They’re committed to making this journey together. In fact, the U.S. economy is more dependent on its northern neighbor than vice versa. It’s incredibly important for both countries to be able to have a constructive dialogue.
