In President Trump’s unpredictable handling of sweeping tariffs on friendly nations, Canada stands out.
Despite the seemingly positive atmosphere in talks and the unusually warm relationship between Mr. Trump and Prime Minister Mark Carney of Canada, the country has experienced significant fluctuations in its trade discussions.
Within three weeks, Canada transitioned from a friendly meeting between the two leaders with the aim of reaching a trade deal by July 21, to a brief suspension of talks, culminating in a late Thursday evening threat from Mr. Trump of increased tariffs and further delays in negotiations.
As Mr. Trump alters the global trade landscape, positive sentiments appear necessary but insufficient to finalize a deal.
Canada, America’s neighboring country, top trading partner, and close defense ally, was the initial target of Mr. Trump’s sweeping tariffs alongside Mexico, immediately following his election. He justified these tariffs with debunked claims regarding Canada’s role in the flow of fentanyl and illegal immigrants into the United States, as well as expressing a desire to annex Canada as the 51st state.
Mr. Trump’s contentious relationship with former Prime Minister Justin Trudeau seemed to exacerbate the negative atmosphere. However, the dynamic shifted in the spring with the arrival of Mr. Carney, who took office in March after Mr. Trudeau stepped down and won the election in April on an anti-Trump platform. Mr. Carney visited the White House in May and hosted Mr. Trump in Canada during the Group of 7 summit the following month.
Both meetings were unexpectedly positive, attributed in part to Mr. Carney’s adept management of high-stakes interactions, marked by minimal conflict and maximum friendliness. The rapport between the two leaders has been so favorable that Mr. Carney was referred to as the “Trump whisperer” in a recent interview.
Mr. Trump has openly expressed his admiration for Mr. Carney, calling him a “terrific guy.” This collegial atmosphere has extended to the officials involved in the trade discussions, including U.S. Trade Representative Jamieson Greer and Canada’s Ambassador to the United States, Kirsten Hillman, who have maintained a professional tone throughout negotiations.
This contrasts sharply with the public discord experienced during the negotiation of the free trade agreement, which included Mexico, in the earlier Trump presidency.
Last week, Ms. Hillman indicated in an interview that officials were communicating almost daily to finalize a deal by the July 21 deadline. She noted that Canada’s objective was to revert to the stipulations of the free trade agreement and eliminate all tariffs.
Earlier this year, Mr. Trump imposed a 25 percent tariff on imports from Canada but exempted most products qualifying as North American under the U.S.-Mexico-Canada Agreement. Exceptions included steel and aluminum, which now face a 50 percent tariff, and vehicles that account for American components.
Ms. Hillman described the dramatic events of late June as typical in trade negotiations. Following Canada’s introduction of a digital services tax applicable to large U.S. tech companies, Mr. Trump suspended talks, which resumed after Canada scrapped the tax.
However, in a late-night letter to Mr. Carney, Mr. Trump threatened to raise tariffs from 25 percent to 35 percent, with no indications that Canada would be exempt from proposed new tariffs on copper imports. He clarified to Canadian officials that their discussions were not unique, using standard language similar to that in letters sent to other nations.
“These Tariffs may be modified, upward or downward, depending on our relationship with your Country,” he stated.