At Issue - Carney’s decision to abandon trade talks

Episode Date: August 25, 2026

Canada-U.S. trade talks collapse and Donald Trump threatens even more tariffs. Was it the right decision for Prime Minister Mark Carney’s government to walk away and is a deal still possible? Rosemary Barton hosts Chantal Hébert, Andrew Coyne and Althia Raj.

Between tariffs, trade battles, and an ongoing war in the Middle East, the lazy days of summer seem to have skipped Washington this year. So our podcast, Two Blocks from the White House, is here to keep you caught up, even if you're in vacation mode. Join me, Katie Simpson with correspondence Paul Hunter and Willie Lowry and other journalists from our D.C. Bureau for a front row seat and what this all means for Canadians. Find and follow two blocks from the White House with new episodes every Wednesday

in your favorite podcast app, including YouTube. This is a CBC podcast. Hey there, I'm Rosemary Barton. This week on a special at issue, the podcast edition for Monday, August 24th. We did make some progress in recent weeks. In the end, that momentum reversed. And we could not accept what the U.S. had offered, nor could we give what they asked. I frankly thought we had a deal.

I think that we should have a deal. But I think that we need to send a message loud and clear to the Prime Minister of Canada. I can go back and forth with Trump. You know, I'm not going to, I'm just not going to take the bait. This guy's a loser. He's going to be a loser. And as simple as that, we're going to fight with everything we have. So tonight we're asking what's to be made of the breakdown in trade talks between Canada and the U.S. Can a deal still be reached between the two countries? So let's just start with what you made of, I guess what happened on Saturday. The talks falling apart overnight Friday to Saturday and the Prime Minister's response.

Shantelle, I'll start with you. I think two things happened at the same time. The Americans pushed the envelope, which they'd already pushed a lot. And Mark Kearney, by then, probably had come to the realization that this was a deal that wasn't good, couldn't sell, and found a way to... get out of it before it got any further. And the reaction of Canadians to it is 70% plus approval kind of shows the environment that any deal would have landed in, a lot of skepticism.

Not too sure what the purpose of having these conversations was to avoid something until something else happens. In any event, we are where we are today. I mean, you know, obviously they were trying to avoid getting to this spot, and there did seem to be some optimism, Andrew, that they were making progress. But as Chantel says, whether it was that they pushed the envelope or it really wasn't that good a deal. What did you make of it? Well, progress to what end? You know, it's clearly they had no choice but to walk away.

But the question is why they were there for so long in the first place. What did they think was going to happen? Did they think they were going to get a reasonable deal that would bring? trade piece or at least long enough trade piece to enter into negotiations again on the on the renegotiation of cosma since this was merely a prelude to that if they thought that i think they're foolish that's not what this administration wants they don't really want a deal they're not even really protectionists as such they certainly are that but it's clear that throughout these negotiations that they have larger fish to fry they have larger ambitions in mind than just knocking down this or that

Canadian tariff or getting us to open up supply management. They want to use trade as a weapon. They want to use our dependence on them and the tariffs that they can extract on us as a weapon to force changes in our foreign policy, in our defense policy, in our trade policy, and so on. And if that's the case, and I think there's compelling evidence that it is, then what are you actually doing by negotiating at all? You're simply setting yourself up for round after round after round of concessions. And I'm glad that they finally realized that. I think the public might have been ahead of them in that regard. Except now, even today, Althea, the president threatened new tariffs on autos in January of next year. So, I mean, things were bad. They're about to get

a whole lot worse. So is that not worth having conversations to try to mitigate that? Well, I'm not sure that announcing that you're going to impose tariffs on January 1st of 2027 means that you have any intention of actually imposing them. So setting that aside, I think that it's possible that all the things that my colleagues have mentioned are true. I think if you take the prime minister at his word, what he was looking for is certainty. You know, he has this big investment summit coming up in September and he wanted to have a framework that looks like something that's half decent. That's at least better than what the other countries have. And for a year now, I think the government has made peace with what, you know, cabinet was told back in August of 2025, which is that there are

going to be tariffs. Like, we have to accept that this is the world. If we negotiate with Trump, that that's a thing that happens. What is interesting is how that kind of derailed last week, whereas, like, they had a deal. They briefed the premieres. The feedback was not great, rather very, very negative. And whether the Americans put poison pills on Friday or we kind of sabotage, ourselves in order to get an off ramp. You know, both things can also be true on that front. But now Carney has like the perfect scenario. He is back to the election prime minister where he has the country behind him.

We are still in by-elections. We have a Quebec election. We have an Alberta referendum. And he is back to being kept in Canada. Like the politics cannot be better for all like the controversies that seem to be losing some progressive support, for example, on the pipeline going to BC's coast, on the Building Canada Act. Now he gets to rally everybody on these programs. And I think to Andrew's point, I think the policy is like good policy, but it's also like fantastic politics. And even within his

own cabinet, there were people who were concerned about what the prime minister was about to do. And now he gets to unify his caucus as well. It's great politics. I totally agree, Chantal, except the economic consequences could be really dire for a lot of Canadians, and the Prime Minister also has to manage that. So what happens now? Like, do we look for a way back to the table? What do we do here? Can we at least agree that the economic consequences of that deal as it was shaping up to be, would have been dire over the long term? Yes. So let's let's get off the, there was a deal to avoid dire consequences. Can we also agree that there was no guarantee that whatever happened then, and I know I have this unpolitically correct way of phrasing it, we are supposed to be negotiating

or talking about Kuzma at some point. This to me, high school talk, feels like being asked to go in a strip poker game in a bathing suit. So you take off all your clothes, sign this deal, which, by the way, would have said we have agreed on these permanent tariffs, quotas, whatever. And then we go and negotiate Kusman. So I am not sure that this was either or choice. Like my colleagues, I believe that the only option was to walk away. Plus, I don't believe that Doug Ford in Ontario, Kristen Frechette, going in an election,

would have necessarily agreed to their terms of this deal, which would have been to restore U.S. alcohol on the shelves. Yeah. So what does happen now then, Andrew? Like, is there a scenario where they come back to the table? Is this just what we live with now till the next presidential election? What's happening now? I think most likely, yes. I mean, there's two ways of interpreting the word accept.

We have to accept that they're going to impose tariffs in our own minds because there's very little we can do about it. We can't appease them, and I don't think we can deter them. So they're going to do what they're going to do, and this is not a normal administration amenable to normal, you know, give and take. So in that sense, we have to accept it. We should not be accepting it at all in terms of our public positioning and signing on the dotted line saying, we agree that the United States can charge 25 or 50 percent tariffs inside a free trade deal. We should never accept that.

Why would we do that? Well, if we could achieve something in return, if we could get that wanted certainty, If the United States was offering any significant benefit to us in return for that, maybe you consider that at that point. But we don't have any of those things. They haven't offered really anything except minor reductions in the amount of the tariff. But they certainly can't offer a certainty because we know that nothing that Donald Trump promises is ever set in stone. We've seen that with other trade deals that countries have rushed to sign with them. So what are you getting in return?

Nothing. So in that case, in my opinion, we should not be conceding essentially anything. this point because there's nothing we're getting in return. Althea? I asked that question to several people earlier today. And I didn't get a clear answer. My sense from their response is that nothing's going to happen until after them in terms. But again, you know, that's a few months away and a lot can change.

So I'm not sure. Would we expect, Chantal, that the counter tariffs, the retaliatory tariffs then are going to be serious and damage? to the United States or they will be measured? Like how far is this going to go in terms of escalation? I expect that as in previous rounds, we will try to go for the counter tariffs that hit imagination more so than pocketbooks. Remember, in the previous round, we put tariffs on orange juice from Florida. that people can really do.

And I will agree with the premiers who believe that taking U.S. alcohol off the shelves, not a big deal for most Canadians, was a very effective way of sending a message. So it's going to have to be measured, and I think it needs to be something visual, like not something complicated that eventually gets back to consumers. But at the end of the day, what I see today is that those polls that show 75%, 85% in my province of people backing Mark Carney are quite extraordinary. But the opposite is not true in the U.S. That is not happening to President Trump and his crew. No one is saying, good for you.

Please stand up to Canada and hit them more. They are losing that public relations battle at home. home. Yeah. 30 seconds to you, Andrew, and Elthia, Andrew. Well, the efficacy of retaliatory tariffs can be doubted. We can maybe target them strategically, but as Chantel said, we're already winning the PR war in the States. Anyway, nobody wants to go to war with Canada. Nobody wants to pay 50% tariffs on goods from Canada. The only argument I can make for retaliatory tariffs is, and it's an important one in this context, is a symbolic thing. It's to show that we cannot be coerced because that's ultimately what this is about. We have to show that we have the

stomach for the fight that we're willing to endure pain in this fight in a way that Americans really aren't. Nobody signed up for this in the United States, whereas everybody is signed up for this in this country. Althea, last word to you. I think what's going to be interesting to watch is if some of the concessions that were made over the last year are rescinded. Does the prime decide, for example, to bring back the digital service tax because there were a lot of things. And even, you know, just earlier the summer, June, I think it was, when the government announced, you know, a billion dollar deals with the U.S. on defense. And people were kind of doubting whether Mark Carney was really kept in Canada.

But we had a whole series of concessions to the United States. And in order to get to, you know, the deal that we didn't find on Friday. So Desky decide to go back to the drawing board and say, yeah, you know, maybe that's $7 billion from the Googles of the world. Maybe we'll take that and we'll use it to help our industries. I think that's going to be interesting to much. Thank you all for being here for a special mini at issue. We will try to leave you alone for a couple more weeks and leave back with all of you regularly in September. Thanks for all of that.

That's our special at issue. What do you think about Canada's decision to walk away from negotiations? was it the right move for right now? You can let us know. Send us an email. We're at Ask at CBC.C.com. We're going to go back briefly, touch wood, on hiatus. Should be back in September with our first official at issue of the season. Thanks for listening to us for today, though.

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