Extended trade talks between Canada and the United States seemed to make progress on Wednesday, with President Trump heralding a “deal” and Prime Minister Mark Carney of Canada saying the two sides were “moving towards an agreement.”
Some 12 hours earlier, Canadians were bracing for a midnight deadline that, if missed, would see 50 percent tariffs introduced against more goods, another potential hit to the Canadian economy at the hands of the Trump administration.
With a new deadline for those tariffs set for midnight Friday, the emotional roller coaster that is the United States-Canada relationship seemed to be hitting a gentler slope.
“We’re very happy with where we ended up,” Jamieson Greer, the United States Trade Representative, told reporters outside his office on Wednesday.
“We feel confident that we’ve reached an agreement that will not only continue to protect American workers, American jobs, American supply chains, but really strengthen the North American economy and create a situation where North America will continue to be an energy powerhouse, a manufacturing powerhouse, and align on important things like economic security and digital security,” he said.
If you’re feeling a sense of déjà vu from the on-again-off-again tariffs Mr. Trump wants to level against Canada, you’re right. We’ve been here before.
In January 2025, he threatened a 25 percent flat tariff on all Canadian exports claiming — without evidence — a massive influx of fentanyl and irregular migrants from Canada into the United States.
Mr. Trump ultimately backed down, but only after telling Canada’s then prime minister Justin Trudeau that he did not respect the border treaty between the two nations, and that Canada made no sense as a country and should be a part of the United States.
In October he threatened more tariffs over a television ad taken out by the province of Ontario that highlighted President Reagan’s dislike of tariffs. He backed down when Ontario pulled the ad off the air.
Last month, he again threatened new tariffs over wildfire smoke pouring into the United States from blazes consuming swaths of Canada’s forests and upending communities. He did not act on the threat.
But Mr. Trump’s serial threats and deadlines against Canada, the United States’ closest ally, cannot be ignored.
The Trump administration’s tariffs has targeted tariffs, key Canadian industries, including aluminum, steel, autos and lumber. And it has thrown North American trade into constant renegotiation. The White House has refused to renew the United States-Mexico-Canada agreement for the long term, and instead demanding annual reviews.
In July, Mr. Trump doubled down on the pattern of economic threats by announcing he would apply a 50 percent tariff on more than 500 goods from Canada, representing about 2 percent of the total trade between the two countries, bringing us to the current talks.
In a presidential proclamation Tuesday night, the White House said that Canada had “expressed a commitment” to address several trade issues that were the nominal basis for the U.S. tariff threat: unfair practices in Canada’s dairy sector, a tariff on U.S. auto exports, and boycotts of American wine and spirits in some provincial alcohol distribution systems, which followed on earlier U.S. tariffs.
And in a social media post, the U.S. trade representative claimed the deal would include broader benefits for Americans, including “comprehensive market access for all American goods, economic security commitments,” and “digital trade alignment.”
But the question remains: What will the United States give Canada in return, beyond postponing the 50 percent tariffs on some products. Executives in the auto and metal industries were watching closely Wednesday to see if the concessions included a reduction in the sectoral tariffs that the U.S. had put on Canadian steel, aluminum and autos, which have been a major sticking point for Canada — and if those concessions would, in turn, need to be extended to Mexico.
Mr. Carney, who was elected in the spring of 2025 to shield his country from a volatile Mr. Trump while also doing a deal with him, has said repeatedly that he wants a comprehensive agreement with the United States, one that resets the two nations’ relationship and lays out cooperation in trade, the economy, defense and natural resources.
He has also spent most of his tenure cultivating Canada’s trade, defense and investment relationships with Asia and Europe, setting in motion a generational shift away from the United States.
In that time, Mr. Carney has made concessions to Mr. Trump, only to have to start again at the next round of threats.
The Canadian government has, in response to Mr. Trump’s demands, rolled back most of its retaliatory tariffs against the United States; handed the United States some of the future revenues of a bridge connecting Windsor and Detroit after Mr. Trump threatened to block it, even though Canada paid for it; and scrapped a digital tax that had not yet come into effect.
Now, with the clock running down to midnight Friday, he is preparing to do it again.
Speaking to the press on Wednesday in Washington, Mr. Trump said the deal was done “subject to finalization of documents” and called it “very fair.”
“They called yesterday and they gave us the points that we had to have,” he added. And he said: “We are doing certain things, gotta give something, we’re reducing a little bit, it’s good for everybody.”
Wendy Cutler, a former U.S. trade negotiator, said that Canada had “dodged a U.S. tariff bullet, at least for the next several days,” and that the deal under negotiation should help pave the way for formal negotiations about the U.S.M.C.A., which had been on hold.
But the delay in the tariff deadline “by no means signals that all is fixed in the U.S.-Canadian relationship,” she said. “The past year and a half has taken a serious toll on bilateral relations.”
For Mr. Carney, the threat-concession loop he is locked in with Mr. Trump presents a problem. While still widely popular at home, Mr. Carney’s base wants him to stand up to Mr. Trump. He will also need to convince provincial governments, which have competing interests in these talks, that they need to take some pain for the general good.
Major examples of this will include having Ontario and British Columbia agree to restore U.S. liquor sales -one small but crucial piece of leverage they have — even if tariffs on lumber — a big British Columbia export- are not reduced, and even if tariffs on autos — Ontario’s major industry — are not lessened as much as hoped. Mr. Carney will brief Canadian premiers on the talks on Wednesday afternoon, after a meeting with his cabinet, his office said.
“I don’t think most Canadians will judge a deal simply by whether tariffs come off,” David Coletto, who leads opinion survey company Abacus in Canada, said in an email on Wednesday. “They will judge what Canada gave up, whether the agreement produces stability (which most know with President Trump that’s almost impossible), and whether the government used this crisis to reduce our vulnerability to the United States. That is the real political test,” he added.
This is unlikely to be the last time Mr. Carney asks Canadians to make sacrifices for Mr. Trump’s shifting demands.
With the U.S.M.C.A. still up in the air, and sectoral tariffs set to stay in place, even if they are reduced, Canada will almost certainly have to negotiate again with the Trump administration.
And so it goes.