Prime Minister Mark Carney Explains “Why I Rejected Trump’s Trade Deal”

I want to encourage you all to read an article in The Walrus with the following preface:

What follows are the remarks Prime Minister Mark Carney delivered in Ottawa after the suspension of Canada–United States trade talks on August 22, 2026.

In other words, we get to hear justifications for breaking off negotiations with Trump from the horse’s mouth, so to speak. I am very happy with Carney’s remarks, and what follows is some of my own commentary on them.

First, he explains (correctly) that we tried to negotiate in good faith:

For over a year, Canada has worked intensively and in good faith with the United States to negotiate a new comprehensive trade deal. We’ve been pragmatic, patient, and persistent. We pursued every opportunity to reach an agreement that protects Canadian workers and their families, that strengthens our economy, and that respects Canadian sovereignty.

…

While the United States has imposed a seemingly endless stream of tariffs and threatened more, Canada has, by contrast, taken several steps in good faith to try to find compromise and secure a comprehensive deal in the best interests of both Canadians and Americans. Our negotiators sought not only to reduce tariffs but also to restore a degree of certainty and stability through a new comprehensive agreement that Canadian businesses and workers could rely on.

I still believe even trying was a waste of time based on Trump’s entire history of breaking even his own deals, but no one who is both in their right mind and being honest can claim we did not give him a chance to change his ways after 80 years of consistently bad behaviour. Once again, we tried rationalizing with an especially dumb brick wall and we failed.

PM Carney actually makes a similar — although more measured — point when he writes “We recognize that sometimes its signature was written in pencil.” The word “sometimes” is being nice, but I accept it in the name of diplomacy. While I feel no obligation to be diplomatic — why should I be held to a higher standard than Pete Hoekstra who is an actual diplomat? — I admit Carney needs to watch his “tone”.

I am also pleased he explicitly called out the U.S. government for repeatedly violating its own trade agreement with Canada with lame excuses:

Over the past year, the US has imposed a series of tariffs that violate its commitment under our agreement with them in Mexico, so-called CUSMA. The United States has continually changed the rationale for these actions, from fentanyl to taxes on US tech giants, to certification of US aircraft, to the sharing of tolls of a bridge that Canada built and paid for, to our dairy policy, to provincial decisions not to sell American alcohol during the trade war, to a television advertisement that quoted Ronald Reagan, to smoke from wildfires while they threatened our communities.

He then counters Trump’s “trade deficit” obsession:

Another prominent justification for US tariffs has been their claim that since the United States runs a “trade deficit” with Canada, we were “ripping them off.” But the US narrow merchandise trade deficit only exists because the US buys so much of its energy from Canada. Canada fuels American growth, supplying 99 percent of their natural gas imports, 85 percent of their electricity imports, 60 percent of their crude oil imports. I don’t think they want us to stop sending any of that energy.

And if you look more broadly at the comprehensive US–Canada trade balance, which includes the many services from financed entertainment that we buy from the United States, that shows a persistent American trade surplus. Most fundamentally, trade is about building mutual strength, creating a relationship that benefits both countries. For example, Canada is the largest customer for US cars. In fact, we buy more American-built cars and trucks than the United Kingdom, Japan, and China combined. It’s the same for American steel products. Canada is also the largest customer for twenty-six US states and a top-three customer for forty-five US states.

Last year, Americans sold almost $600 billion in goods and services to Canadians. That’s more than $1.6 billion every single day. On the other hand, Canadian exports to the United States lower costs for American families. In contrast, tariffs are taxes, taxes which are ultimately paid by US consumers.

Furthermore, while I still contend any concession is a bad concession when it comes to the U.S., Carney explains where Trump’s demands went over the line for him:

There were some things we wouldn’t do. We were not prepared to compromise Canada’s sovereignty or to undermine our key industries. We were not prepared to compromise on our sovereignty, the protection of the French language, or our culture. To be clear with our American colleagues, for my government and for Canada, these issues were never on the table, even though the United States pushed for them until the very last minute.

In these remarks, the Prime Minister does not go into more detail on exactly what demands the U.S. government was making, but other sources have revealed they included having an actual veto over Canada’s trade deals which have nothing to do with the U.S.! As former national security analyst and Carleton University Associate Professor of International Relations Stephanie Carvin wrote on Bluesky:

Oh hell no. U.S. vetos on Canadian trade deals is actually insane. Absolutely justified in walking away.

I like her “tone”!

Similarly, as written by Carson Jerema for the National Post:

Leaked details of the tentative agreement that was reached earlier this week were bad enough. Apparently, according to media reports, Canada was conceding to permanent unilateral tariffs from the Americans on steel and autos, albeit at lower rates, while this country was expected to lift all tariffs, and make several non-trade concessions. These included scuppering digital legislation, a promise to complete the F-35 purchase and altering Canada’s supply management regime. Whatever one thinks of those policies, whether they are good or bad, they should be the purview of Ottawa, not Washington.

The fact that Canada was expected to make all these concessions while American tariffs remained in place is ludicrous. Not to mention that this little side deal already contravenes the existing Canada U.S. Mexico Agreement, which is somehow supposed to be renegotiated at some point.

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Most galling of all, again, assuming the prime minister’s characterization of events is accurate, is that the U.S. wanted to restrict Canada’s ability to sign trade deals with other countries.

In other words, the plan was to turn Canada into a Western version of Belarus, where it is nominally independent but controlled from a foreign capital.

…

So walking away from negotiations, even if it leads to a protracted trade war, was the right thing to do. It may have been the most important moment for Canadian sovereignty in generations, and much credit to the prime minister for having the nerve to stand up.

As for how Canada will respond to Trump, I am completely on-side with Carney:

Now, Canada will match Washington’s new tariffs, dollar for dollar, in order to protect Canadian workers, farmers, families, and businesses. Our response will be concentrated in sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, electronics—also include products that are currently subject to unjustified Section 232 and 338 tariffs. This is a focused response to protect and defend our industries and allow them to compete with US products in the Canadian market. In the coming days, we’ll release details of these new tariff measures—measures which will come into force the Tuesday after Labour Day.

Most other Premiers are also on-side with the Prime Minister, with the obvious exception being Alberta Premier Danielle Smith. But she exhausts me, so I will not comment much more on her at this time. I believe in always showing respect when arguing people — and I admit I have fallen down occasionally in that respect — but Danielle Smith is one exception to that rule. I feel no obligation to “build bridges” with someone who is actively trying to destroy the lives of Albertans by taking away their citizenships, all for her own selfish political gain.

Believe me, all of the colourful language I have used when writing about her really has been restrained.

Getting back to the Prime Minister, he then explains how we will be “focusing on what we can control”, and I encourage you to read it all from the source. I like it.

Next, there is the question of how the government will help Canadians who will be negatively affected by Trump’s tariffs. It will certainly formulate policies to achieve this goal, but I particularly like one recommended on Bluesky by University of Calgary Economics Professor Dr. Lindsay Tedds:

In Canada, we can further enrich the Canada Groceries and Essential Benefit and we could also make it monthly.

Do it!

In closing, I want to give major credit to Prime Minister Carney for how he answered a certain question from a reporter yesterday, which I first read from University of Calgary School of Public Policy economist Kent Fellows:

Final english language question at this morning's press conference, Carney's response to a question on why it feels like his statements sound like Canada is going to war:

"Because we were attacked."

Damn right! I want more of this attitude from him.