Canada Gears Up to Ride Out Trump’s Term

A wry smile escaped when I came across a Bloomberg report saying that Canada sees little chance of resuming trade negotiations with the United States before the midterm elections and is preparing to ride out the remainder of Donald Trump’s term.

The Art of No Deals.

Good.

Immediately after Canada walked away from the negotiations and rejected the annexation offer, we made a recommendation to the wider democratic world—to Britain, Europe, Japan and others. Do not overthink the response. Two workable models were already sitting on the table.

The first came from India. The second came from Canada.

Canada has now decided to close some distance between them.

“We are prepared to ride out Donald Trump’s term” was essentially the message India’s National Security Adviser, Ajit Doval, delivered to Marco Rubio in Washington after the MAGA administration unleashed its 50% tariff theatre against India last August.

India did not retaliate with tariffs. But neither did it negotiate under pressure, ask for relief or offer Washington concessions in return for removing them. It simply told the administration that it was prepared to sit this one out. To this day, India has refused to sign a trade agreement with the Trump administration.

Canada chose a different route. It retaliated dollar for dollar, and we expected Ottawa to continue negotiating with Washington even while applying pressure. Some discussions will undoubtedly still take place. Governments must keep channels open, particularly when their economies are so deeply connected.

But entering those conversations from the position that Canada is prepared to ride out the administration is fundamentally different from continuing to talk because Canada believes it must secure a deal.

Very different.

One position says: let us keep talking until we find an agreement. The other says: we can talk, but we no longer require an agreement from you. That is an excellent starting poistion to hold.

After the dollar for dollar announcement, Carney added something very important in his speech:

“Canadian businesses now enjoy tariff-free access to 1.5 billion consumers. Over the next six months, we will double that number through new trade deals, from ASEAN to India.”