It’s another curveball in the Canada-US trade war – a new missive by US Donald Trump threatening an unexpected 35% tariff on Canadian goods starting next month.
It came as the two countries engage in intense trade talks meant to produce a new deal in the coming days, and what the latest tariff threat means for these negotiations is unclear.
But Canada’s new prime minister, Mark Carney, is beginning to face questions over whether he is able to stand up to Trump and secure the fair deal for Canada he promised.
Carney won April’s general election vowing to keep his “elbows up” in the face of US threats, leaning on a popular ice hockey metaphor used to describe an assertive and confrontational style of play.
But Canada’s recent concessions to Trump appear to have yielded, to date, little result.
The latest came in late June, when Canada scrapped a Digital Services Tax (DST) it had planned to impose on big tech companies after Trump threatened to end negotiations over the policy.
The White House said that Canada “caved” to its demands, and the move prompted debate in Canada.
Canadian commentator Robyn Urback wrote: “Maybe Prime Minister Mark Carney’s elbows were getting tired.”
She said government’s elbows up and down approach to negotiations so far could be characterised as a “chicken dance”.
Meanwhile, Blayne Haggart, a professor of political science at Brock University, argued in a recent opinion piece in The Globe and Mail newspaper that: “Nothing about Carney’s US strategy, particularly his pursuit of a ‘comprehensive’ trade and security agreement, makes a lick of sense.”
Walking back on the DST has achieved “less than nothing”, he said.
Still many are willing to give Carney more time, and polls suggest his government maintains strong support.
Roland Paris, a former adviser to Ottawa on Canada-US relations, told the BBC that it is too early to say whether Canada has conceded things prematurely.
“Much will depend on the final agreement,” he said.
But Mr Paris said it’s clear Trump drives a hard bargain.
“If, in the end, Carney appears to have capitulated to Trump and we’re left with a bad deal, he will pay a political price at home,” he said.
Before the walk back on the DST, Canada sought to appease the president by pledging early this year C$1.3bn to enhance security at the shared border and appointing a “fentanyl czar” over Trump’s claims the drug was flooding over the boundary.
Still, in his Thursday letter announcing the latest tariff, Trump again warned Canada over the drug.
Carney also didn’t respond with further counter measures when the president doubled tariffs on steel and aluminium last month.
The prime minister responded to the new threat of a 35% tariffs by 1 August saying: “Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses.”
He said Canada will continue negotiating, with next month as the now-revised deadline for an agreement. (The two countries had previously set a 21 July time limit)
The good news for Canada is that the new tariff rate will not apply – at least for now – to goods under the US-Mexico-Canada free trade agreement, which covers a vast majority of the cross-border trade.
President Trump has also sent similar notes to more than 20 countries as part of his plan to carve out new agreements with America’s trade partners.
Domestically, Canadians across political stripes remain united against Trump’s tariffs.
Conservative leader Pierre Poilievre said on Thursday his party is ready to do everything it can “to secure the best deal for Canada”, while British Columbia Premier David Eby said Trump’s letter is “one more reminder of why Canadians need to come together”.
And experts note there may be more to the ongoing negotiations than meets the eye.
Despite having a smaller economy than the US, it still has some leverage, argued Fen Hampson, a professor of international affairs at Carleton University and expert on international negotiations.
“It’s important to remember that it is American consumers who are going to pay the tariffs, not us,” he said.
Many US-based manufacturers also rely on Canadian products like steel and aluminium, which are currently subject to a steep 50% tariff.
“You can’t judge the outcome of negotiations by the last move or the concession that’s made,” Prof Hampson noted. “You can only judge it by its outcome.”
Experts also point to Carney’s efforts to reduce reliance on the US – including by signing an arms deal with the European Union – and to fast-track major projects and remove domestic trade barriers.
Pressed Friday on Trump’s latest threat, Canada’s industry minister Melanie Joly said the government “does not negotiate in public”.
And she denied that Canada isn’t standing up to Trump.
“We’re dealing with a very unpredictable US administration,” she said, and “we’re not the only ones”.
