{"id":826274,"date":"2026-08-26T09:20:16","date_gmt":"2026-08-26T09:20:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/826274\/"},"modified":"2026-08-26T09:20:16","modified_gmt":"2026-08-26T09:20:16","slug":"analysts-predict-an-eventual-us-canada-trade-war-compromise-despite-new-tariffs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/826274\/","title":{"rendered":"Analysts predict an eventual US-Canada trade war compromise despite new tariffs"},"content":{"rendered":"

WASHINGTON (AP) \u2014 The U.S. and Canada have ramped up their trade war<\/a>, hitting each other with steep new tit-for-tat tariffs. Despite the bravado coming from both sides of the border, though, analysts suspect the longtime allies<\/a> will eventually strike a deal to end a conflict neither really wants.<\/p>\n

The prospects for compromise looked bleak Tuesday, with Canadian Prime Minister Mark Carney reacting to new 50% U.S. tariffs on certain Canadian goods by responding in kind on about $20 billion worth of American imports, including steel, dairy products, appliances and farm equipment.<\/p>\n

\u201cYou\u2019re at war when you get attacked. We got attacked,\u2019’ Carney, who came to power last year<\/a> on the promise that he\u2019d stand up to U.S. President Donald Trump<\/a>, said over the weekend. <\/p>\n

Doug Ford, Ontario\u2019s populist premier<\/a>, told The Associated Press on Monday that he was ready to escalate even further by cutting off his province\u2019s shipments of electricity and critical minerals to the United States.<\/p>\n

Soon after, Trump declared his intention to hammer the Canadian auto industry with another set of import taxes if the Canadians don\u2019t \u201cfall in line.\u2019\u2019<\/p>\n

With the breakdown threatening to harm one of the world\u2019s largest trading relationships and clouding efforts to renew the United States-Mexico-Canada Agreement<\/a> that Trump negotiated during his first term, experts cautioned that there\u2019s still time to pull back from the brink of an even bigger trade war. <\/p>\n

They\u2019ve done it before. \u201cIf there is political will, there is an off ramp,\u2019\u2019 said former U.S. trade negotiator Wendy Cutler.<\/p>\n

\u2018It\u2019s not real until somebody walks away\u2019<\/p>\n

U.S.-Canada trade talks typically get testy, said Christopher Sands, who heads the Center for U.S.-Canada Studies at Johns Hopkins University.<\/p>\n

The two neighbors have a long history of sparring over things like Canada\u2019s protected dairy market and subsidized softwood lumber exports.<\/p>\n

\u201cWe\u2019ve gone through this with Canadians before,\u2019\u2019 Sands said. \u201cIt\u2019s almost like it\u2019s not real until somebody walks away from the table. … I\u2019m not panicked.\u2019\u2019<\/p>\n

There are reasons to think something can be salvaged from the rubble of bilateral trade talks that collapsed Friday<\/a>.<\/p>\n

First, the U.S. tariffs that Trump imposed Saturday cover just $20 billion worth \u2014 around 5% \u2014 of Canada\u2019s exports to the United States and are unlikely to do much lasting economic damage. Oxford Economics reckons the trade conflict would reduce Canadian economic growth only slightly next year \u2014 from a previously forecast 1.6% to 1.4%. On Monday, U.S. Trade Representative Jamieson Greer even tried to downplay the trade rift as a \u201ctempest in a teapot.\u2019\u2019<\/p>\n

Moreover, Carney\u2019s retaliatory tariffs wouldn\u2019t take effect until Sept. 8. \u201cThat gives us this week. It gives us next week,\u2019\u2019 Sands said. \u201cTime to take a breather and talk about how to avert\u2019\u2019 an all-out trade war.<\/p>\n

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Despite Trump\u2019s tough talk on Truth Social, his punitive auto tariffs wouldn\u2019t kick in until Jan. 1 \u2014 well after the Nov. 3 midterm elections<\/a> in which the president\u2019s Republican Party is hoping to keep full control of Congress despite voter frustration<\/a> with the high cost of living.<\/p>\n

So there\u2019s at least enough time for the countries to find a stopgap solution.<\/p>\n

Cutler, now senior vice president at the Asia Society Policy Institute, suggested that the U.S. could tap an emissary that both countries trust to get talks back on track; she recalled that Trump\u2019s son-in-law Jared Kushner helped negotiate the USMCA eight years ago.<\/p>\n

Canada would likely balk at a one-sided deal <\/p>\n

Cutler also noted that Trump suspended his global tariffs for months last year to allow U.S. trading partners to negotiate with him. Many did, including the European Union and Japan, and ended up agreeing to lopsided trade agreements to dodge the worst of Trump\u2019s tariffs.<\/p>\n

Canadians, though, are in no mood for a Trump-friendly trade deal.<\/p>\n

The American president has enraged the Canadian public with inflammatory talk of making their country the 51st U.S. state<\/a>. And on Tuesday, instead of trying to lower the temperature, he declared that he was considering changing the name of Lake Ontario<\/a> to Lake America. He has also repeatedly hit Canada with tariffs and threats of them, including when he suggested he might punish Canada for wildfires<\/a> that were blackening U.S. skies.<\/p>\n

\u201cFighting with Washington is hugely popular in Canada right now,\u201d said Scott Lincicome of the Cato Institute, a Washington-based free-trade think tank. \u201cGuys like Doug Ford \u2014 like him, love him or hate him \u2014 understand this is a political winner for them.\u2019\u2019<\/p>\n

The latest U.S.-Canada conflagration flared up last month when Trump said he planned to hit Canada with 50% tariffs. He complained that Canada had been unfairly restricting U.S. exports of dairy, alcoholic beverages and autos. Trump set a deadline of Aug. 19 \u2014 last Wednesday \u2014 for the two countries to reach a deal and head off the tariffs.<\/p>\n

Because the Supreme Court struck down his biggest tariffs<\/a> in February, the president turned this time to an obscure provision of a Depression-era trade law that gives him the power to impose tariffs of up to 50% on imports from countries that have discriminated against U.S. businesses. No investigation is required, nor is there any limit on how long the tariffs can last. But no president has ever imposed such tariffs before, so they are untested in court.<\/p>\n

\u2018No choice\u2019 but to walk away<\/p>\n

Last week, negotiators appeared to be close to resolving their differences. Less than two hours before levies were set to take effect, Trump announced a three-day reprieve, posting on social media that \u201cCanada and the U.S.A., subject to the finalization of documents, have a DEAL!\u201d Greer, the U.S. trade representative, later told CNBC that the United States had offered to cut in half existing 50% tariffs on Canadian steel and aluminum, and to sharply reduce levies on Canadian auto and softwood lumber imports.<\/p>\n

But it all fell apart Friday and the Canadians walked away, with Carney saying the Americans had sought \u201cto destroy our major industries, including autos, steel and aluminum. … That was one of the main reasons we said no. It was a bad deal.\u2019\u2019 Carney also said that Washington viewed protections for French and Canadian culture \u2014 considered fundamental rights in Canada \u2014 as irritants to trade.<\/p>\n

Ford said he understood that late in the talks, Washington demanded veto power over trade deals Canada pursued with other countries, which would have violated Canadian sovereignty.<\/p>\n

Despite the differences, Cato\u2019s Lincicome said, \u201cboth sides understand the economic consequences of some sort of a full-blown trade war.\u2019\u2019<\/p>\n

The two countries last year did $880 billion worth of trade, according to the U.S Commerce Department. Canada sends 72% of its exports to the United States. And U.S. communities along the border depend on Canadian electricity. American farmers need Canadian potash fertilizer. And U.S. refineries in the Midwest rely on imports from Alberta\u2019s oil sands deposits.<\/p>\n

Then there\u2019s U.S. politics. \u201cVoters hate tariffs,\u201d Lincicome said. \u201cThey associate them with higher cost of living, and (Trump has) got to be hearing from political folks that if he wants any chance of salvaging the midterms he can\u2019t start a trade war with Canada.<\/p>\n

\u201cMy guess \u2014 and it\u2019s only a guess \u2014 is that cooler heads do prevail somewhere in the next few weeks.\u2019\u2019<\/p>\n

____<\/p>\n

Gillies reported from Toronto. Associated Press reporter Seung Min Kim contributed.<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 The U.S. and Canada have ramped up their trade war, hitting each other with steep…\n","protected":false},"author":2,"featured_media":826275,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[1927,28,103,8834,12,48041,101,793,3139,48658,9580,111,74177,8879,795,305287,965],"class_list":["post-826274","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-ap-top-news","tag-business","tag-canada","tag-canada-government","tag-donald-trump","tag-doug-ford","tag-economy","tag-general-news","tag-international-trade","tag-jared-kushner","tag-mark-carney","tag-politics","tag-scott-lincicome","tag-tariffs-and-global-trade","tag-u-s-news","tag-wendy-cutler","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/826274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=826274"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/826274\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/826275"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=826274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=826274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=826274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}