U.S.-Canada breakdown shows limits of Trump’s aggressive trade strategy
https://www.washingtonpost.com/business/2026/08/23/us-canada-breakdown-shows-limits-trumps-aggressive-trade-strategy/
U.S.-Canada breakdown shows limits of Trump’s aggressive trade strategy
https://www.washingtonpost.com/business/2026/08/23/us-canada-breakdown-shows-limits-trumps-aggressive-trade-strategy/
6 Comments
What is Canada’s figurative Strait of Hormuz in the trade war? We know from Iran and elsewhere that Trump has no plan b when opponents don’t surrender as he assumes they will. So very broadly speaking – what can we do to inflict the most pain and embarrassment, in a simple, targeted way? Obviously the booze bans worked, and the tourism boycott is being felt but what measures could we take that would get attention and win international support?
From the article:
> *At a White House meeting, White House trade adviser Peter Navarro and Commerce Secretary Howard Lutnick, whose department administers the national security tariffs, clashed with Greer, representing industry views that the higher aluminum tariffs were needed to encourage domestic manufacturing.*
> *“Navarro and Lutnick were both yelling at Greer saying: ‘What are you doing? This is stupid. You know, we’re not giving these things away,’” said one industry representative, who spoke on the condition of anonymity to describe the confidential talks.*
This confirms Carney’s comment yesterday about the US admin not being unified in their negotiation objectives.
This generously assumes that trump has a strategy or even knows the word strategy. He only knows lying and bullying. Beyond that, he has nothing.
Trump is following his own playbook to a tee:
1. Think Big – Aim for ambitious, high-stakes outcomes. Trump emphasizes setting bold goals and not limiting your vision.
2. Use Leverage – Negotiate from a position of strength. Leverage means having something the other party wants, needs, or can’t do
3. Protect the Downside – Always assess and minimize potential risks. Prepare for the worst-case scenario and ensure losses are
4. Maximize the Upside – Push for the best possible outcome, even if it means taking calculated risks.
5. Know Your Market – Understand the landscape, opportunities, and competition. Trump often relied on intuition and direct experience over traditional market
6. Use “Truthful Hyperbole” – Exaggerate (but not lie) to create excitement and interest. Trump calls this “harmless exaggeration” to make a deal more
7. Be Flexible – Maintain “flexible positioning.” Work on multiple deals simultaneously to avoid over-attachment to any single outcome, giving you more negotiating
8. Fight Back – If attacked or challenged, respond aggressively. Trump often counters criticism or obstacles with bold, sometimes confrontational, tactics.
9. Deliver the Goods – Follow through on promises. Once a deal is made, focus on making it work, even if it requires creative problem-solving
10. Contain the Costs – Keep expenses under control, especially in the early stages of a deal.
11. Have Fun – Enjoy the process. Trump frames deal-making as an art form and a source of personal satisfaction
Looks like we’re at Step 8 currently. Step 9 is laughable, coming from Trump.
The really difficult thing here is that the products the US does rely on Canada for are largely protected from tariffs under CUSMA (energy and agricultural goods). That takes a lot of our potentially effective retaliatory tools off the table.
If we were to withdraw from CUSMA, the US would be able to levy tariffs on our energy exports, which would be a complete disaster.
A lot of talk assumes Trump will be very weakened after the midterms. That will likely be true politically, but a Democratic Congress won’t be able to do much on trade because Trump will simply ignore them and continue to unilaterally set trade policy using whatever mechanism they claim allows him to do it. That won’t change unless the Courts stop him and the Supreme Court will not reliably challenge Trump. So despite a seemingly likely scenario of the GOP losing Congress, I’m not sure that on trade much will change during the remainder of Trump’s term. Our strategy for the next two years will need to remain the same: focus on long term trade diversification, grow other markets, build big projects in Canada, support tariff impacted industry, retaliate with targeted measures that harm US trade while minimizing domestic damage. Rag the puck on CUSMA as long as possible. None of that is easy, but we cannot expect our trade relationship with the US to improve until there’s at least a more rational, if not less protectionist, US administration. Even if subsequent admins remain more protectionist, if they at least pursue a rationale consistent strategy on trade they can be negotiated with. Under Trump that is impossible, and I think the last month has proven it to be futile. I don’t expect Canada to pursue any further deals with this administration.