U.S. Trade Representative Jamieson Greer may prefer not to label it as a trade “war,” yet regardless of the terminology used — a disagreement? a disparity? a discord? — the ongoing situation has persisted for over 19 months.
Back in February 2025, Donald Trump, going against a free trade agreement he had previously endorsed in 2018, initially imposed tariffs on various Canadian goods.
It appears that it could be several months more before tensions de-escalate, let alone come to a halt.
Wolfgang Alschner, a business and trade law professor at the University of Ottawa, expressed, “I believe it is more probable than not that the current state of affairs will remain unchanged until the year’s end.”
From recent discussions, it is evident that there is a potential compromise, but the existing stances are currently too far apart to easily reach an agreement. The status quo is challenging, yet not to the extent of compelling either side to alter their positions forcefully.
Mark Carney, speaking to the press recently, characterized the latest American tariffs announced earlier in the week as “relatively modest,” especially when compared to other actions taken by the U.S. administration.
This assessment might indicate that there may not be a necessity to retaliate with additional measures against American imports. The recent pattern of escalation might have reached a state of equilibrium.
Carney emphasized that Canada is always prepared to strike a fair deal. However, if one were to entertain war comparisons, it appears that both sides are currently entrenched in their positions.
The primary negotiators, including Greer and Canadian officials Dominic LeBlanc and Janice Charette, have largely refrained from political disputes and maintained a professional demeanor, potentially leaving room for negotiation, according to Meredith Lilly, an international economic policy professor at Carleton University.
Lilly also pointed out a few potential “trigger moments” in the upcoming months that could reignite discussions. For example, if the United States and Mexico were to reach a resolution on their issues, it could exert pressure on Canada. The midterm elections in the U.S. could also alter the political dynamics on the American side. Additionally, there looms an American threat to impose new tariffs on automobiles and trucks starting January 1, 2027.
Trump might consider employing a new tariff threat, akin to what occurred this past summer, to push the issue further.
Less optimistically, Manitoba Premier Wab Kinew mentioned that provinces have been advised to brace for “two-plus years” of uncertainty.
In terms of who is gaining ground in this conflict, American officials may believe that the U.S.’s economic supremacy ultimately gives them the upper hand. U.S. Treasury Secretary Scott Bessent likened Canada to a “yippy” dachshund challenging a German shepherd.
However, both American economist Paul Krugman and Canadian foreign policy scholar Roland Paris argued that Canada might hold the motivational or political advantage, with Canadians predominantly unified against a clear and potentially existential threat.
Recent polls have shown strong support among Canadians for taking a firm stance against the United States. There has been a noticeable surge in support for Carney’s Liberals following the breakdown of trade negotiations.
This bolstered backing could enhance Carney’s position at the negotiating table, but it raises the question of whether the Canadian public’s reaction could complicate efforts to strike a deal with the United States.
Before formal suspension of negotiations, Charette reportedly cautioned American counterparts that a breakdown in talks and the imposition of new American tariffs could push discussions over the edge, limiting Canada’s negotiation flexibility.
David Coletto of Abacus Data made a similar argument, suggesting that public sentiment could pose a significant barrier to a new agreement.
“My sincere hope is that the temperature is turned down in both countries,” Lilly remarked. “In particular, the president really needs to reduce this very aggressive social media campaign that he’s pursuing. It makes it politically very difficult, if not impossible, for the Canadian side to engage.”
Lilly also pondered whether it would now be more challenging to revert to any previous agreements that both sides were broadly aligned on when Trump initially hinted at a deal in August.
Some Canadians may trust Carney’s judgment on what constitutes a favorable deal, especially under the prevailing circumstances. Public opinion polling indicates that he currently commands significant political support.
Nonetheless, no level of support equates to unconditional approval. The Carney government’s recent decision to halt certain controversial proposals amending environmental assessment laws may signify an acknowledgment of this.
To maintain a strong position, Carney may need to consider additional strategies in the upcoming days and weeks.
The collapse of trade negotiations and subsequent events over the past two weeks might reinforce Carney’s assertion that there has been a “rupture” and that Canada’s “old relationship” with the United States has evolved.
The responsibility for addressing this falls largely on the prime minister, and it is still premature to determine the exact path Canada will embark upon.