Mark Carney, “We are going to stand up to a bully, we're not going to back down."

Monday’s Edition: The U.S. Canada trade war. Series 39 #1

America had free trade with Canada. F - R - E - E. Free, nothing is better than free.

For thirty-seven years, a truck left Canada, crossed into America, and nobody charged a cent on goods made in Canada; and a truck left America, crossed into Canada, and nobody charged a cent on goods made in America. No import tax. No customs bill. At 12:01 on the morning of 22 August 2026, Trump killed that. The United States now charges a 50 percent import tax on Canadian goods.

The irony, of course, is that America was built on free trade after World War II. Republicans built free trade with Canada; Ronald Reagan signed the Canada-US Free Trade Agreement in 1988. NAFTA superseded it in 1994. Trump replaced NAFTA in 2020 with the USMCA, which he called “The best trade deal ever made.” He signed his name to it (which we now know was meaningless).

In 2025, more than $380 billion in Canadian goods crossed into the United States. Almost all of it entered free.

Then Trump backed out of his own agreement.

On 20 July 2026, he signed three proclamations under Section 338 of the Tariff Act of 1930, a law no president has ever used to impose a tariff in almost 100 years since Congress passed it. Fifty percent import tax on 554 categories of goods: wine, furniture, cement, clothing, fishing rods, hockey equipment. Trump’s new tariffs violated Trump’s USMCA deal. A Canadian exporter that followed every rule in Trump's own agreement still pays the 50 percent. Earlier, Trump tariffs exempted his USMCA-compliant goods. These do not.

Then in the final hours his negotiators changed the terms. They added wording restricting Canada’s right to sign trade agreements with other countries. In other words, Trump and the Republicans wanted to dictate Canada’s foreign trade policy, demanding Canada sign away the right to sell to anyone else but the U.S. They wanted to do that because Mark Carney’s government has negotiated twenty agreements in just a year, reaching 1.5 billion consumers tariff-free. Canada does not need the U.S. nearly as much as it did, and even Republicans know this gives Canada the advantage. Trump wrote it out on 24 August: “WE DON’T NEED CANADA, THEY NEED US!”

Not anymore.

At the last minute, the Republicans also changed the negotiation to force Quebec’s French-language rules, down to user manuals and the French printed on household appliances. Trump and the Republicans wanted to dictate Canada's domestic law, because language is an issue that pits Canadians against each other. Quebec has the most to lose and Alberta the least, and a country arguing with itself over language stops working as one. Carney named it on 22 August: the tariffs are "designed to hurt and divide us."

Trump and the Republicans tried to bully Canada, and Canada would have none of it.

On 21 August, Mark Carney ended negotiations and sent his negotiators home. “We cannot accept what they have offered, and we will not give what they have asked.” On 8 September, Canada will match the American tariffs dollar for dollar on US steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

Carney could say no to Trump and the Republicans because he spent eighteen months making sure Canada would not need the deal. Carney said, “Building at home and diversifying trade abroad is not our Plan B. It has been our Plan A from the start.”

Canadian firms now sell tariff-free to 1.5 billion consumers, a number set to double within six months once the ASEAN and India agreements take effect. Carney invested domestically at the same time. $25 billion paid to Canadian workers and businesses hit by the tariffs. Carney's Major Projects Office has taken on twenty-seven major infrastructure and resource projects for fast-tracked review, representing $500 billion in new private investment.

Carney read the American administration correctly and prepared his country for the moment he knew was coming.

76 percent of Canadians called ending the negotiation the right call.

Trump will threaten, demand, throw a tantrum.

Mark Carney will plan, build, and succeed.

Canada Strong.

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