Ten points off lumber, with the Section 232 tariff gone entirely. As low as 7 percent on autos. Steel and aluminum halved to 25 percent. Those are the numbers U.S. trade representative Jamieson Greer put on the record in The New York Times this weekend, describing what Washington had on the table when Canada-U.S. trade talks collapsed Friday night.
A plea before going further, because I know how any suggestion that the American offer had merit will land with many readers: don’t shoot the messenger.
The deal points Washington put on the table were not nothing. The fuller inventory, by Greer’s account: outright elimination of the 10 percent Section 232 tariff on Canadian softwood lumber, though the antidumping and countervailing duties (a dispute that has run continuously since 1982) would still apply at roughly 25 percent under the pending revision. The 25 percent automotive tariff cut to as low as 7 percent for vehicles containing U.S. content. On steel, one of our most important priorities, a reduction from 50 percent to 25 percent for the majority of our exports under a tariff-rate quota, and on aluminum, 50 down to 25 with no quota at all. On downstream steel and aluminum products, cuts of 10 to 25 percentage points, with a floor of 15 percent.
The 50 percent tariffs that took effect Saturday morning on dairy, wine, hockey sticks (yes, hockey sticks), and other goods would have been suspended, alongside cooperation on critical minerals and transshipment.
Graphic credit: Janice Nelson
Prime Minister Carney called it a “bad deal”: “We cannot accept what they offered, and we will not give what they asked.” Washington, he said, “asked too much and offered too little.” On the asking side, his case is strong. American demands supposedly included syncing Canadian tariffs on key goods with U.S. rates for all non-North American trading partners, including free-trade partners. For any Canadian government, this is a red line.
But absent a handful of demonstrably unreasonable demands, that might or might not have been resolved had Carney not recalled his negotiators, it is hard to argue that the overall “deal” wasn’t favourable to Canada. Measured against what Washington extracted from Japan and the European Union, the package amounted to a form of “harmonization with benefits” for America’s second-largest trading partner, and Greer’s claim that it would “continue their best access and improve it” holds up on the numbers he describes. Bottom line: Canada would have emerged with the most favourable total access of any U.S. trading partner.
As Canadians’ latest paroxysms of anger at Trump rise over the country like a thundercloud, darkening our perceptions of what to do next in the budding trade war, it is worth keeping front of mind the not insubstantial concessions the Americans were seemingly willing to make. The reality is the president really wants a deal and for reasons that largely have nothing to do with the intricacies of the bilateral trade relationship with Canada.
Canada-U.S. Trade Minister Dominic LeBlanc, left, and United States Trade Representative Jamieson Greer, speak to reporters in Washington, D.C., on Wednesday, Aug. 19, 2026. Kelly Geraldine Malone/The Canadian Press.
As Sean Speer and I have argued in these pages before, the primary function of tariffs is to generate revenue for a cash-starved U.S. government. Consider the current fiscal backdrop in America. The U.S. national debt just passed $40 trillion, and Washington is running annual deficits of roughly 6 percent of GDP, wartime-scale borrowing sustained indefinitely in peacetime, while adding roughly $1 trillion of new debt every hundred days. Absent large tax increases, Social Security will be unable to pay full benefits as soon as 2032, implying cuts of up to a quarter of current benefits for American retirees, a date that falls squarely within the planning horizon of every politician now serving in Washington.
Last summer, when the Japan and EU deals telegraphed the Trump administration’s push for a universal tariff of around 15 percent, we ran some back-of-the-envelope arithmetic: a levy at that level applied to America’s roughly $3.3 trillion in annual goods imports generates something like half a trillion in new federal revenue every year. Exempting Canada’s $400-billion-plus in exports would blow a $60 billion or more yearly hole in that plan.
Americans, like all of us, want more from government while paying less in taxes, and neither party, especially the GOP, will campaign on income tax hikes or entitlement cuts. Tariffs turn out to be one of the few politically viable ways to get Americans to pay revenue-generating taxes—in effect a hidden national sales tax—collected at the border and blamed on foreigners. It seems to even work at the ballot box with the president’s hardcore, anti-tax MAGA base.
Carney has built his premiership on a maxim he repeats often: accept the world as it is, not as we wish it to be. It is time we applied this dictum to the United States itself, because in these negotiations we are dealing with a drowning man—drowning in debt. America is in a serious fiscal jam, and none of it is fair to Canada. A world in which Washington had raised revenues, reformed entitlements, and made hard choices decades ago would be an easier one to negotiate with. We are not living in that alternative universe. Quite the opposite.
This analysis suggests that for realists, our PM included, the shape of any eventual settlement is already there in Friday’s aborted deal: 7 to 15 percent autos, 25 percent metals and lumber, something like 10 percent levies on the remaining balance of trade. That sketches a blended rate that lands us roughly in line with other advanced economies, paying something approaching 15 percent in total on our exports to the United States.
This insight is both constraining and liberating.
Constraining, because there is no return to the U.S.-led era of trade liberalization. That era is over, and we will pay, one way or another, for access to the U.S. market, just as the rest of our G7 peers. It is a reality that Canadians, and our political class in particular, cannot seem to bring themselves to acknowledge. The result is an unrealistic sense of what these negotiations can and should accomplish, and no small frustration in Washington.
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Liberating, because we have far more leverage over this president than simply refusing to stock Kentucky bourbon in our liquor stores. Trump’s America is in a dangerous debt spiral, and that Achilles’ heel is a vulnerability we can use. Washington’s appetite for tariff revenue is voracious because tariffs are the only politically painless way it has found to fund spending it will not cut. That appetite is our leverage: it creates the space in negotiations for us to hold our red lines and land an agreement that meets both countries’ core needs—a fiscal lifeline for the Trump administration, and a deal that leaves the building blocks of Canadian sovereignty intact.
Prime Minister Carney, send your negotiators back to Washington. You may be closer to a deal that spares both countries a disastrous trade war than you think.
The article discusses the recent collapse of Canada-U.S. trade talks, highlighting the concessions offered by the U.S. that could have benefited Canada. U.S. trade representative Jamieson Greer outlined significant tariff reductions on various goods, yet Prime Minister Carney deemed the deal unacceptable due to excessive American demands. Rudyard Griffiths argues that despite the frustrations, Canada may have leverage in negotiations due to America’s fiscal challenges. He calls for a pragmatic approach, suggesting that returning to negotiations could lead to a mutually beneficial agreement and avert a trade war.
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Comments (1)
I have a hard time believing this myself, but Canadians need to envision a trade world that excludes the United States.
This means we have to get a lot better at creating and providing what the world wants, whether it’s raw materials or finished goods.
Canada has a lot of international good will, but it falls down badly on delivery. That hurts others, but also itself, and its future.
If the failed CUSMA rewrite is the price we pay for an “aha” moment that makes us realize that government is about creating a future for all Canadians, rather than sucking the present dry, it is a price worth paying.