U.S. President Donald Trump makes a trade announcement as Secretary of Commerce Howard Lutnick, left, Vice President JD Vance , second from left, and British ambassador to the United States Peter Mandelson, right, look on in the Oval Office of the White House in Washington, on May 8.JIM WATSON/AFP/Getty Images
Now we wait.
There is a sweat-it-out period on Canada-U.S. trade now. There aren’t real negotiations going on, not in the nitty-gritty sense, not yet. There’s a kind of pause to regroup.
On Tuesday, President Donald Trump sat next to Prime Minister Mark Carney in the Oval Office and said there’s nothing the United States wants from Canada. He told reporters there’s nothing Mr. Carney can say or do to get him to lift tariffs on Canadian goods.
“It’s the way it is,” he said. And we can take Mr. Trump at his word. For now.
He made tariffs a big part of his first 100 days. His political play now is to tell Americans that countries around the world are lining up to beg him for a deal. Why would he drop his tariffs wholesale now?
But in a few months, things might change. The U.S. economy contracted a little in the first quarter of 2025. U.S. Federal Reserve Chair Jerome Powell said Wednesday that there’s greater uncertainty, and a greater risk of higher inflation and unemployment. Mr. Trump’s approval ratings are down.
At some point, he might want to beat some form of partial retreat on his tariff threats. If he wants to fight on fewer fronts, he would pay no political price by making a deal with Canada.
Foreign Affairs Minister Mélanie Joly made that point repeatedly on Wednesday as she made the round of TV news networks: Polls show Mr. Trump’s popularity is declining. He faces political and economic pressure. We’ll see.
The wait won’t be easy. Business leaders are already warning the Prime Minister that time is not on Canada’s side. Uncertainty is scaring off investors. The Canadian auto sector is scrambling to mitigate its big losses, but rolling shutdowns at assembly plants could become permanent.
But now we’ll start to see agreements that first-movers are making with Mr. Trump. And the handshake deal that Britain signed isn’t a good advertisement for a quick agreement.
The Brits made concessions to get the U.S. to lift steel tariffs, but they still face 10-per-cent tariffs on most goods. Prime Minister Keir Starmer sued for trade peace and paid a steep price to settle quickly.
Maybe time will help. That’s bad for Canadian autoworkers in Canada and for U.S. automakers, too. Mr. Trump will hear more grumbling.
Canada’s ambassador to the U.S., Kirsten Hillman, told The Globe and Mail on Thursday that the immediate focus is getting tariffs lifted, but a good deal cannot be sacrificed just to do it quickly.
There are things happening: “We’re discussing next steps, that will include exactly who talks to who,” Ms. Hillman said.
Yet real horse-trading hasn’t begun. Issues such as military spending and critical minerals haven’t been linked to tariffs or other trade issues yet. Mr. Trump, in his meetings with Mr. Carney, didn’t suggest anything he might want from Canada in return for lowering tariffs.
Ms. Hillman said pressure on Mr. Trump matters and might help convince him to ease tariffs. She noted there’s increasing attention to rising prices of everyday items in the U.S – but that closing a deal isn’t as simple as waiting for time to soften the other side.
“What will actually be definitive, in terms of getting us over the line for a deal, is unknowable at this point,” she said.
“It will be a combination of political pressure, economic pressure, consumer and voter pressure on both sides of the border. In the abstract, I don’t think we can define it. Americans wanting resolution to some of these trade challenges and prices rising is very important for us.”
In the short term, Mr. Carney has political room to pivot to domestic economic issues.
His election campaign was premised not just on dealing with Mr. Trump, but on a promise that if the President doesn’t budge, he’d mitigate the effects by building the domestic economy. Mr. Carney promised to bring down internal trade barriers, and more importantly, to expedite and streamline approvals for resource projects.
“If that happens, capital will be deployed, and we can build things,” said Goldy Hyder, the president of the Business Council of Canada.
But business leaders still want stability soon. Mr. Carney was elected to wrestle with Mr. Trump. It won’t be an easy wait.