The Current - What now for Canada-U.S. trade?

Episode Date: August 24, 2026

50 per cent U.S. tariffs are on for all kinds of Canadian products - despite all signs pointing to a deal last week. So what happened? Guest host Susan Ormiston speaks to our national affairs panel to make sense of it all.

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I'm Susan Ormiston, and this is the current podcast. You're at war when you get attacked. We got attacked. The U.S. put 50%. We waited until the United States decided to actually implement the so-called 338 tariffs. That's fine. We've got the reserves. We've got the resilience. We've got the plan. We've got the focus. We respond. We're going to focus on what we can control.

We're going to build. On Saturday morning, Prime Minister Mark Carney said we were being attacked. In response, he pulled out of trade talks with the U.S. And now we're looking at ongoing and potentially escalating tariffs. But it's a move the federal government says is best for Canada. To help us parse through all of this, we've brought together our National Affairs panel. Catherine Cullen is the host of CBC Radio's weekly show, The House. And Ryan Tummelty is a political reporter with the Toronto Star.

They're both joining me from Ottawa. Catherine Ryan, good morning. Good morning, Susan. Well, what a weekend, really. You know, 11.30 on Friday night, Catherine, it seemed like there was going to be a deal. And then the U.S. trade negotiator called a press briefing from the White House and we learned that Canada had walked. What happened? It's one of those moments in politics, Susan, that does.

It makes you gasp. I mean, I woke up Saturday morning early and I was like furiously rubbing the sleep out of my eyes, trying to figure out what the heck I was seeing on my phone, what had happened overnight. We have had an accounting from both sides of this conversation now. You know, there was a sense that things were really barreling towards the conclusion all week. It seemed to only be a matter of time. But Prime Minister Carney says that last minute changes to the terms that the U.S. proposed were, in his words, unfair, un-economic. And I think this is important, called into question the reliability of any deal. Now, not surprisingly, the Americans take a different view.

They're not saying, hey, we pulled the rug out from under the Canadians. they're suggesting it's the Canadians who are at fault here. U.S. Trade Representative Jameson Greer said that Canada declined to finalize an agreement, but that Canada made new demands and walk back. So they're essentially both accusing one another of negotiating in poor faith, but it's clear that what was left on the table was not working. And Mark Carney, I think, really tried to make the argument the other day that ultimately this was his decision, that there was some agency on the part of Canada.

They looked at what was in front of them and they said, This will not stand. We don't have to agree to this, and we will not agree to it. Ryan, I was working throughout the night on Friday night, as there was a lot of finger pointing between midnight and 2 a.m. What were the breaking points that let Carney say it was uneconomical? Yeah, there were a couple of things. We've gotten some specifics from the prime minister. I think generally this was a case of the U.S. asking for more than we could provide. That's what the prime minister says.

But some of the examples he gave, you know, there was going to be this continuing tariff, albeit at a lower rate on vehicles from Canada going into the U.S. But the U.S. wanted the higher tariffs that they've been imposing to continue to be imposed on bigger trucks. The prime minister giving the example of sort of the Ford 250s and 350s, those much bigger commercial pickup trucks. they still would have been subject to these high tariffs. You know, he talked about the U.S. really putting in language that would have limited our ability to make new trade deals. And, you know, the whole sort of Kearney approach to this problem is, yes, to get a good deal or as good a deal as we can get out of the Americans, but to also start shipping goods to other places around the world, to stop being so reliant on.

on the U.S. So, you know, the U.S. was starting to structure a deal, it sounds like, that would have made it impossible for Canada to prosper in a different way. Catherine, where does this leave Canada? I mean, it's clear there are no new negotiations scheduled at this point. I mean, first and foremost, we have to say, the severity of this news from an economic standpoint, right? The tariffs that the U.S. had threatened are now in place. 50% on a whole swath of Canadian goods, about $27, $28 billion worth. So there are immediate economic impacts. We've all been talking to various businesses who were fearing this moment, very hopeful for

a deal. People are making very difficult choices right now, potentially business owners, about what to do because they simply cannot afford to keep selling their goods if they are facing this kind of 50% tariff. Canada is now preparing retaliatory tariffs that are scheduled to come, into effect September 8th. Prime Minister Carney has said dollar for dollar and it's worth noting not just on this new 50% tariff. We're going back to what are now broadly known as the 232 tariffs as we all become more and more familiar with the specifics of Canada-U.S. Trade

talk, but those are the sectoral tariffs, right? Aluminum, autos, forestry products, steel. So Canada is preparing a pretty big punch back. But part of what is going to happen with that, Susan is not only are those retaliatory tariffs also going to create economic pain for Canadians, the Americans were pretty quick to say that they will then present a new set of options to Donald Trump to further escalate. So there is the possibility of a sort of downward economic tip-for-tat spiral here that would be quite bad for Canadians. I don't want to get, you know, the card ahead of the horse. I think we're still waiting to see what kind of economic supports the government is going to put forward for businesses, precisely how much Donald Trump is really engaged in all of this and

what he intends to do. But it is a very serious moment and the space between the two sides does seem to be growing. Catherine, just following up on that for a moment, September 8th is some days away. Is there any chance that was strategic to allow some cooling off time and maybe have talks in the interim? I think there's absolutely a chance. This is the thing I've been thinking a lot about Susan and I would say there's sort of two parallel arguments that you're hearing out there. One is, yes, exactly that, that there's a bit of time here. It gives a possibility for things to get restarted. But I think you also have to look pretty clearly at what was said on Saturday.

Prime Minister Mark Carney has suggested that the things that the Americans were asking for. Some of them were an affront to Canada's sovereignty. Ryan talked about the limitations on our ability to do trade with other nations. Well, that is part of our sovereignty, right? our decisions about to what extent we, how we want to engage with the world. And if those decisions are being made by another country, I mean, some of this is part of what happens in trade. But the Prime Minister really has framed it as some red lines in effect here, some of the things around the protection of the French language, which may not seem of great interest to non-Frankophones

or people outside of Quebec. But that is a particularly, it's always been a touchy issue. but this is also coming on the cusp of a Quebec election where there is a very realistic chance that a sovereignist party is going to come to power, which would, in theory, eventually lead to a referendum in that province. So there are questions about national unity. So the prime minister, I would argue from his perspective, has to show a pretty muscular defense of the French language in order to think about the federalist dynamics, right? the idea of managing the politics in that province. And Mark Carney basically said, listen, we can't count on these guys. Signature in pencil sometimes, he said the other day of the Americans.

We just don't know if we could count on any deal. So it's tough to see with all of those pieces how they could get back to the table. But at the same time, the economic wall up here is going to be significant. And there is going to be pressure to work this out. Ryan, Catherine, is the line laid out what Mr. Carney told us about what happened in that room. he's selling this to Canadians. How is it going over? I mean, Canadians were not in a conciliatory mood.

So I think that in the short term, at least, the Prime Minister, you know, is getting a lot of support for this. I mean, we were talking about this just last week that there was this petition going around, you know, calling on Parliament or calling on the government to expel the Canadian, the U.S. ambassador to Canada. We don't expel ambassadors to hostile countries to us, but 200,000 people had put their signature forward to kick out the U.S. ambassador. That's the kind of mood Canadians are in. You know, Canadians are not only not traveling to the U.S., but I know lots of Canadians who avoid U.S. products at the grocery store, which is pretty hard in a country like Canada in January. So, you know, Canadians have really dug in on this, and I think they were looking for the same from their government. I think there probably would have been some acceptance of taking a bad deal or a less than ideal deal that was being put forward.

But, you know, politically, I think the prime minister is reading the room pretty well. I'll say this, though, that can be short term, right? that can change in an incident. That'll change when plants get canceled, when jobs start getting cut, when small businesses have to close because of these tariffs, there will be people wondering why we didn't make a deal. Canada's indigenous stories aren't just being told.

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and we find out that three and four Canadians endorsed the Carney's decision, Karni government's decision to walk away from the table. but two and five are worried about their jobs. I mean, that's natural. What are we going to see in the short term, Ryan, about job loss? I think that's hard to know without knowing what the retaliatory tariffs are going to look like and without knowing what kind of compensation package the government might be bringing forward to businesses. You know, the prime minister has talked about the coming budget, the fall budget,

the fall budget being something that has a lot of support for business. He sort of hinted that and in his address Saturday that they would be going beyond what they did last year in terms of helping businesses get through this. So it's hard to know. But what I would say is different about what we're about to experience compared to what we have experienced is over the last year, we have seen these sectoral tariffs on steel, on aluminum, on autos, on lumber. by and large, that is a tariff on big industries and big companies.

There's really no such thing as a mom and pop aluminum smelter or a local neighborhood steel melt. These are big businesses, and in some ways that makes it easier for the Canadian government to support them, to get under them a little bit and help them transition. These new round of tariffs are hitting, you know, people who make honey and beer and wine, wig makers. Yes, they're also hitting the lumbar sector and the dairy sector again. But these are small businesses and they may not have the same room to adapt to these new tariffs that some of these bigger firms did over the last year. I want to bring in a few comments, including from the Ontario Premier over the weekend because Doug Ford had been a bit silent in the days leading

up to the final breakdown. But here's what he said on the weekend. Let me tell you about President Trump. President Trump is a type of person that would steal your lunch money the first day. He'd steal the took off your head the second day. And the third day, he'd steal your running shoes. So every province has a different view on these tariffs because of their position industrially. But Catherine, walk us through. What are we hearing from premiers?

Well, I think there were a lot of striking things about what we heard from the premiers once this. news came down from the federal government. One I would say is relative unanimity at this point, right? Everybody is saying Canada should not have signed a deal that would sign away pieces of its sovereignty. You know, Team Canada right now, this isn't the situation we wanted to be in, but we are going to try to meet the moment, support businesses. I was struck, for instance, by Manitoba Premier Wob Canoe, who was one of a limited number of premiers who had weighed in as the deal was still in negotiations. and he was probably the one who went the furthest in suggesting that he didn't think that this was necessarily going to be a good deal for Canada saying, you know, Trump, in his view, is weak. Canada should keep fighting. But he was very clear when he came out on Saturday, 100% support for the prime minister on this move. The premiers are 100% united.

Again, I do think that even though everybody seems to essentially be on the same page at this moment, that does not mean that there is. we are free from pressure or debate going forward. I note, for instance, Quebec Premier Kristen Fershett, when she made her comments about her reaction to the deal. And again, she is essentially in campaign mode. The Quebec election has not officially started. She is, in fact, doing an event with Mr. Carney later today. But essentially, the campaign has already begun.

And she was very clear that she was going to put a lot of pressure on the federal government to step up. I mean, it's hard not to see that in a political lens, that this is going to be a key piece of the Quebec election. And Madame Foreschette is going to try to show herself as a muscular candidate who is willing to put pressure on the federal government. Because goodness knows that the Pelti-Khebecois has never shied away from doing that. So it's going to be a bit of an election, you know, football, I think, in Quebec. Ryan, I also want to bring in Pierre Pahliav's position and just remind us what he said last week before the deal was called off. we might see a large sucking sound of Canadian jobs moving south of the border.

We cannot accept the deindustrialization of our economy. So what have we heard from Pollyev since the breakdown of talks, Ryan? Well, I know he's making a call just this morning to have Parliament recalled to get into all of the details of this deal that we didn't take and wanting to know what the course forward is. I think what he was saying last week is potentially accurate. A bad deal, a deal that doesn't allow Canada to profitably sell automobiles, for example, would have been really bad for this country.

You know, high tariff, a high permanent tariff on autos, that would have led to what the U.S. administration says it wants, which is the end of sort of auto production in Canada, all auto production brought back to the U.S. So there's definitely a lot at stake here. I think it is interesting to see Mr. Polyev's tone and stance change over time. Certainly, I think he has become much more anti-Trump in the last year. And part of that is just watching the U.S. President do what he's doing. But there's also a lot of polling data out there that says that conservative supporters,

who used to be fairly supportive of Trump are becoming less and less so all the time. So I think he has a bit more political room than he might have had a year ago. And speaking of Trump, he was a little late to respond to all this. Normally we might expect him to post something on his true social quite quickly, but it took till Sunday for him to come out. But here's what he posted on Sunday saying, quote, Canada wants the benefits of being a state without being one. They have also charged our great farmers for many years,

massive amounts of tariffs, no more triple exclamation mark, in quote. Catherine, in just a line, are we going to hear more from Trump on this? I'm sure that we will, although I will say, Susan, no all caps anywhere in that statement, which I think on the Trumpometer counts as restrained. But I don't think that that should give Canada, you know, a great sense of comfort. Who knows is really always the answer when it comes to Donald Trump. Before all this, we're going to talk to you all about the important by-elections coming up in a week. And in just the, sorry, two and a half minutes we have left.

There's three by-elections, one in Quebec, one in Toronto, and one in B.C. So, Ryan, this is going to be a fight. The Prime Minister has to keep his eye on those. What do you think the political calculus is here? Well, listen, I think the Toronto and Vancouver by-elections, just because we're short on time, I will say, are pretty safe liberal seats, and I pretty much expect them to stay there. Obviously, the numbers might go up and down a little bit,

and we'll get a sense of the party's strength in those two communities, but I think they're holding those seats. The one I am watching, the one I think the country is going to be watching next week, is in Chakutumil-La Fort, in Quebec, where some of these trade issues really play hard. You know, to give you an example, the U.S., one of the demands the U.S. has long had is a change to how we deal with dairy in this country, our supply management system and the high tariffs we have that keep out,

American milk. You know, the liberals are running a dairy farmer. They are running someone who's not only a dairy farmer himself, but he's on the industry association or has been in the past. So, you know, those trade ties are important. And I actually think, you know, had the government signed a deal that opened up dairy access, that might have cost the liberals that seat right there. You know, it's a tight three-way race. So it's going to be a really interesting one to see where it lands next Monday. Very important context here. This trade is swirling around with politics all around the Prime Minister. Catherine, a last word to you.

I'd say there are three other votes that are more significant to watch. The Alberta referendum, the Quebec election and the U.S. midterms, and the extent to which on the Canadian side, certainly all of this is going to play into both of those votes. The U.S. midterms, I think there's a lot of hope amongst Canadians that this is finally going to get the Americans' attention, that could have an impact on the midterms. I think that remains to be seen, Susan. So there's a lot to watch here. And as you say, the politics are thick and heavy, but the consequences are very real.

This is visceral. This is going to affect the lives of average Canadians. And just a reminder, Catherine, help me with this, that the House doesn't sit till the end of September. So we're going to have a lot of talk without the parliamentarians weighing in on this. Well, this is Pierre Pollyev is calling for the House to be recalled so that there can be more scrutiny of this. I'm not sure. That's on the top of the government's priority list. But yes, I think, again, everyone seems to be coming together at this moment.

But there are going to be a lot of questions about the deal that Carney was prepared to sign. I think the conservatives are trying to put pressure there. Some of the premiers are now making it clear that in hindsight, Doug Ford, it was a bad deal, he says. So some pressure there. And then also the supports, the push or not to get back to the negotiating table. There is unity here, but the path forward, no question is a difficult one. And there is going to be a lot of debate about it. Catherine and Ryan, thank you very much for this morning.

Thank you. Catherine Cullen is the host of the CBC Radio's The House, and Ryan Tammeltie is a political reporter with the Toronto Star. They were both in Ottawa this morning. You've been listening to the current podcast. I'm Susan Ormiston. For more CBC podcasts, go to cBC.ca slash podcasts.