What Washington is missing about Trump’s Canada tariffs - National Post

Copy URL Facebook Linked In X (Twitter) Loading account options Sign In Manage Account Close account menu Sign Out By Tracy Moran November 5, 2026 at 4:00 a.m. The Council on Foreign Relations recently led a member delegation to Detroit and Toronto to examine the U.S.-Canada economic relationship.

The group examined how trade, investment, and advanced manufacturing continue to connect the two economies despite the trade tensions.

Edward Alden, a CFR senior fellow and visiting professor of U.S.-Canada economic relations at Western Washington University, accompanied the group. National Post spoke with him about what the delegation learned and what Washington is missing.

This interview has been edited for clarity and length.

I think several different things. I think one that they may be aware of but aren’t hearing enough is how damaging the tariff policies have been to that region.

I mean, these are industrial economies, most obvious in the auto industry, but it’s true in other sectors as well, that are so integrally tied to each other that trying to pull it apart inevitably causes a lot of damage to both countries. So I think message number one is just the very significant regional impacts that the tariffs are having.

Message number two, which surprised me a little bit, is how much goodwill remains. I mean, there’s obviously a lot of Canadian anger at the actions of the administration.

We’ve seen big declines in Canadian travel to the U.S., which has hurt Detroit, but has also hurt my community out here in Bellingham, Washington. But I really came away from the conversations in Windsor and in Toronto with a sense that there’s still a lot of will and desire on the Canadian side to try to fix this. Not to go back to the way things were — that won’t happen — but to try to build a more productive path going forward.

And I think the third thing, which if they’re not aware of it in D.C. they should be, is just that Canadians are prepared to be in this for the long haul. I didn’t hear a shred of willingness to accept a deal that’s going to permanently disadvantage the Canadian economy. I think if there’s a deal to be reached, it has to be a more balanced agreement of the sort that have been reached in the past. Obviously, there will be differences — this is a new administration, it’s a new world. But I think the extremely one-sided demands that we’ve seen out of Washington just aren’t going to fly in Canada. Those would be my big takeaways.

I think the argument doesn’t work very well in North America because as a result of free trade agreements going back three decades plus, we’ve created these regional production economies. Let’s look at this from an American perspective.

Goods manufactured in Mexico or in Canada have very high percentages of U.S. content. There are direct benefits to the American economy when we are importing products that have a “Made in Canada” label or a “Made in Mexico” label. It’s quite different when you’re looking at trade with China.

China is building supply chains … that are quite separate from the United States. China is increasingly making most of the inputs for its manufactured products in China. It’s internalized a lot of the supply chain. But where it’s not (internalized), it’s an Asian supply chain. So the products coming from China to the United States have very little U.S. content in them.

There is not very much in the way of industrial or manufacturing work that is created in the United States when we’re importing products from China. In fact, quite the opposite, because these products are often competing directly with North American-made products. So the problem with the approach this administration has taken is not tariffs per se, but not picking the targets intelligently.

Even if you want to reshore manufacturing, the U.S. is not about to become a self-sufficient economy. We are going to rely on manufacturing inputs for the final products that we produce, and a lot of those are gonna come from Canada or Mexico.

If you’re putting tariffs on those intermediate goods, then you’re just costing your own manufacturers a great deal of money. So there’s nothing wrong in theory with wanting to reshore some manufacturing, and I certainly think there are strong arguments for working with allies to develop capacities in critical inputs, be they minerals or lithium batteries.

We could come up with a long list of things where North America doesn’t want to be wholly dependent on China. But fighting a trade war with Canada and Mexico undercuts that goal. I think the trade war is completely misguided, even if you accept that the goal is to try to encourage reshoring of manufacturing in the United States. This is not the way to go about it.

If you look at the election debates, I think the greatest costs are actually being felt in the U.S. border states. So we’ve got an economy out here in Washington State, and the same is true in places in Michigan and New York and others. You’ve got border towns that were heavily dependent on Canadian business that is way down.

You’ve got the industries in Michigan and the other border states that are hurting, a lot of it from the cost of the tariffs that those companies are being forced to pay. The competitive position of Ford and General Motors vis-à-vis international competitors is weakening as a result.

I mean, it’s a very cynical kind of strategy, and I don’t think one that behooves any U.S. president who’s behaving in a way that befits American interests. But the strategy was to harm the Canadians more and hope they will buckle, and I think, in fact, you’re seeing the opposite.

You’re seeing a lot of the harm being concentrated in the northern U.S. states and voters in those states complaining about it. And the administration is responding. You’ve seen some tariff modifications. I think that’s why there seems to be a prospect for the U.S.-Canada negotiations to be revived.

It is not at all clear that the tariffs have inflicted a level of pain on Canada that is making Canadians want to rush back to the negotiating table. In fact, it seems to have done the opposite.

It’s too soon to tell. I’ve followed trade negotiations closely for about three decades now, and the devil is always in the details. The U.S. and Canada were quite close to a deal back in August until things happened at the last minute. It seems to be mostly U.S.-led — that they just put unacceptable issues on the table. It’s certainly possible that that could happen again. But I think the Trump folks are aware that they are reaching the political limits of the tariff policy.

They’ve managed to do something rather extraordinary in the last two years, which is to take an American populace that was quite skeptical of trade. You look at polls on NAFTA, USMCA, or polls on trade with China, and across the board, (there were) high levels of skepticism among the American public about the trade arrangements.

And, in the course of a year and a half as a result of tariff policy, they’ve turned Americans strongly against tariffs. Americans have come to equate tariffs with rising prices, with hits to their own pocketbook. And I think the administration is recognizing this.

Trump is always willing to do deals. He wants them to be as one-sided as possible. But I think he’d be more than happy to put this to rest. I don’t think he wants to get hammered for the next two years over the tariff policy with Canada …

We don’t like a lot of things about the tariffs, but the Canada tariffs — you’ve got to be kidding me, right? This is one of our closest allies, a trading partner that we’ve been able to work out disputes with for decades, that has largely the same labour rights we have here in the United States, that doesn’t have the challenges of trading with Mexico and some other countries. What the heck are we doing putting tariffs on Canada?

Trump’s tariffs are unpopular, but the Canada tariffs are uniquely unpopular. And you’ve really seen that come together in the midterm campaign. So I think we’re in a different political moment. That doesn’t mean that a deal is imminent.

For Canada, this is a hard team to negotiate with. They’re not well-organized. They change their mind frequently. So I’m not going to go out on a limb and predict that a deal is imminent. But I do think the political environment for a deal is considerably better than it was even two, three months ago.

I think at the national level, the signs of recovery would be efforts to modify the tariffs when and where it’s evident that harm is being caused to both countries.

I’m not naive enough to think we’re going to go back to the USMCA tariff environment, but I think you could end up in a situation where both countries are actually trying to make the trade relationship work, even if the rules are different than they were under USMCA. So that would be one.

I think number two would actually be serious engagement on the USMCA review, which has not happened yet between the United States and Canada. But a clear commitment from the U.S. side that, yes indeed, we want to extend the USMCA, and to do that, we have to reach agreements that are acceptable to both Mexico and Canada.

The U.S. talks with Mexico have broken down as well — not as publicly as they have with Canada because the Mexicans have taken a much quieter approach. But they’ve broken down over largely the same issue, which is the national security (Section 232) tariffs, particularly on autos in both Mexico and Canada’s case, not exclusively.

Steel is another big one and steel derivative products. But those negotiations are going nowhere. So I think a second sign would be that the review process that was set up in USMCA is actually being engaged with in a faithful fashion by all three countries. So those would be the two big things I would look for. Also, some effort to gain common benefit out of whatever the new set of rules are and a recommitment to the USMCA process. Possibly a third one would be even inklings of some common approaches vis-à-vis China. At the moment, I think Canadians aren’t the least bit interested in that, but I think if the situation with the U.S. stabilizes, then those discussions could begin again.

And I think there are interests in both countries in having somewhat more unified approaches towards China.

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