Trade talks are off. S. 338 tariffs are in place. S.232 tariffs are as before.
There are competing narratives from our side and theirs on what went wrong. The USTR says Canada walked back commitments and issued new demands. PM Carney says the US introduced “last-minute changes” which “were unfair, uneconomic, and called into question the reliability of any deal.” The Trump administration has, of course, a habit of making last minute or even post-deal amendments. Reports that Howard Lutnick, U.S. Secretary of Commerce, played a role in scuttling talks have highlighted autos, but he and his family firm have elsewhere been active in a series of critical minerals deals. The USTR statement listed critical minerals cooperation among the terms of the deal. And there was a lot more in the USTR list of terms:
As I’ve said before and will say until I’m blue in the face, that list is really about China and making Canada adopt certain policies to align with the U.S..
When the PM says last minute changes were uneconomical, unfair and unreliable, he may want to tell Canadians more specifically what the problems were. Otherwise, the USTR is shaping that narrative unchallenged.
The PM also assured Canadians that additional support is on the way. On this, specifics are no doubt coming soon. Here’s what I hope will be in the next wave of supports:
A broader effort to temporarily reduce entry barriers to regular EI. S.338 tariffs will be more diffuse in their effects than 232, and purely sectoral or regional relief won’t work. We also still only have the tools we have (gaaaaaaahhhh!!!) so something like a manual adjustment to the local unemployment rate used in EI will be needed to let the system respond fast enough.
Coordination with provinces delivering LMDA & WDA programs to pivot services towards trade adjustment.
Proactive outreach so more employers know about Work Sharing Agreements to reduce layoffs, rather than just focusing on helping repeat users regain access.
Crosswalking programs/services between ESDC(Service Canada) and ISED (including all the agencies). Ideally this means concierge service to navigate programs, but I’d settle for better sign-posting and simplified navigation tools. You shouldn’t need a degree in public admin to find your way around government programs in a time of crisis.
Don’t launch more coordination tables. Repurpose the Workforce Alliances to focus on trade adjustment but get them actually moving.
Any work on a pilot to deliver a $15K benefit for mid-career workers (well, up to 100,000 of them), as per the LPC platform, should be repurposed to look for a more flexible approach for re-skilling tariff-affected workers (who will be a diffuse group). Also, look at ways to make the Canada Training Credit payable outside of tax time.
Finally, if there are more big defense procurement projects with domestic production, now would be a great time to get those out the door. Skilled manufacturing for autos can maybe pivot to skilled manufacturing for drones, for example.
The U.S. is about to head into a very ugly midterm season. I’m not confident that talks with the Trump administration can or should resume between now and November, and then there’s going to be the immediate aftermath of that vote. So, this could be the new normal for a bit. In any case, this is just one round in a chronic condition we have to manage.
In an asymmetric conflict, the smaller party doesn’t have to inflict major wounds on the larger opponent. It just has to show it can withstand pain long enough for the larger party to tire and have incentive to settle. We can do this Canada, if we act collectively. That’s what governments are for.
Canadians are ready and willing but Americans are angry too for all the problems their White House has created.
Big difference tolerating pain caused by a foreign source as opposed to getting it from your own government.
That’s what governments are for!