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Just when it seemed like a trade deal was close at hand, the Canada-U.S. trade relationship has taken a sharp turn for the worse. The new, higher U.S. tariffs on Canadian goods have come into effect, and Canada has officially confirmed the retaliatory tariffs that will come into effect on Sept. 8. So what will all of this mean for the Canadian economy? And is our retaliation worth the cost that it will impose on our economy? The National Post’s Rob Breakenridge speaks with Trevor Tombe, professor of economics at the University of Calgary and director of fiscal and economic policy at the School of Public Policy, about the economic consequences of this escalating trade war. As Tombe outlines, tariffs are essentially a tax, meaning Canadian consumers and businesses will bear much of the cost of Ottawa’s retaliation. The same, though, is true of the aggressive American tariffs. We’ll take a closer look at what the fallout from this trade war could look like, as well as the sort of tax reform the Carney government could deploy to mitigate the damage, while still boosting Canada’s competitiveness and productivity.


Even with the new tariffs, a U.S. wine drinker can get a bottle of wine from a B.C. winery for less than the same bottle sells in Ontario and Quebec.

With news that Canadian wine producers are being hit with 50 per cent U.S. tariffs, the immediate reaction of B.C.’s Lightning Rock Winery was to note that the tariffs are still not as high as the markup they face when selling within Canada.

As detailed on the winery’s website, Lightning Rock is hit with a 75 per cent markup in sales to the Liquor Control Board of Ontario (LCBO).

In a Monday Substack post by National Post columnist John Ivison, Lightning Rock owner Ron Kubek said that while the new tariffs have devastated his U.S. sales, it’s ironically still cheaper for an American to buy his rosés than a customer in central Canada.

Even with the new tariffs, a U.S. wine drinker can obtain Lightning Rock wines for $30 a bottle, while interprovincial markups mean that the same bottle sells for $38.17 in Ontario’s LCBO and $43.66 at La Société des alcools du Québec (SAQ).

It’s been more than a year of official pledges to slash Canada’s interprovincial trade barriers as a response to the U.S. trade war. As Prime Minister Mark Carney pledged after the official breakdown of U.S. trade negotiations on Sunday, his government will “tear down the barriers that have divided our economy for generations.”

And yet, liquor continues to be the most conspicuous symbol of how many of those barriers remain in place.

According to official Government of Canada estimates, the Canadian economy loses up to $200 billion each year due to a latticework of interprovincial barriers that make it difficult to “buy, sell, and transport goods and services across the country.”

According to a recent report by the Toronto Board of Trade , alcohol is “one of the most well-known and visible examples” of these barriers.

In fact, provincially controlled liquor stores often have wider selections of foreign liquors than out-of-province liquors.

“It’s easier to get a bottle of wine from Chile than it is (to get one) from British Columbia,” Matthew Holmes, a representative with the Canadian Chamber of Commerce, told Global News in January 2025 , right at the beginning of the current trade war.

Nevertheless, official attempts to reduce internal trade barriers have repeatedly failed to liberalize alcohol sales.

In November, a meeting of Canada’s first ministers in Yellowknife struck the Canadian Mutual Recognition Agreement on the Sale of Goods, a concord billed as an “unparalleled agreement” to increase interprovincial trade.

However, the agreement explicitly excluded “alcoholic beverages” from consideration.

Then, just last month, another meeting of Canadian premiers — this time in Charlottetown — actually did come to an agreement on interprovincial liquor sales.

“In the face of President Trump’s latest tariffs, it’s more important than ever that Team Canada work together to build a more united, resilient and self-reliant Canadian economy,” said Ontario Premier Doug Ford in a statement.

But the agreement the premiers presented contained no timeline for implementation and covered only the relatively boutique sector of “direct to consumer” alcohol sales. It had no effect on retail sales; the means by which most Canadians buy beer, wine and spirits.

The agreement also specified that none of it was “legally binding.”

“This Agreement sets out the understanding of the Parties with respect to their cooperation and does not create any legal obligations or enforceable rights,” reads a clause.

“All the agreement says is that we say we’re going to do it at some point,” wine lawyer Mark Hicken said in comments published by Business in Vancouver. “There’s no timeframe at all for when they’re actually going to do it.”

What’s more, the agreement gave provinces a wide berth to levy new taxes and fees on direct-to-consumer alcohol sales — all of which would technically qualify as new interprovincial trade barriers.

As Kubek, of Lightning Rock Winery, wrote in a critique of the agreement published in the Edmonton Journal, it left the door open to new layers of “liquor board markups, fees, registrations, reporting requirements and administrative barriers on Canadian products sold to Canadian consumers.”

“The premiers removed the roadblock. Then they protected the toll booths,” he wrote.

And even this limited agreement on liberalized alcohol sales couldn’t garner unanimous support. The government of Quebec refused to sign it, as did the territories.


An oil well in a field seen along Highway 22, known as the Cowboy Trail, between Cochrane and Cremona, in Alberta, Canada on May 22, 2025.

I love Canadian oil and gas. And potash and canola, copper and nickel, and pretty much all of our resources. I love them because I see them as tools to achieve the things that matter to Canada and Canadians: jobs, revenues, foreign investment and infrastructure, of course. But also influence and soft power. Means by which we can make new trading partners, be useful to our allies, and mitigate the ability of our adversaries to weaponize energy, minerals and food.

President Trump has done the service of making other Canadians see our energy and resources in the same light. We now collectively recognize it as a source of power and leverage, our front foot in an increasingly turbulent and fraught world. This comes just in time for a commodity cycle upswing, the generational ebb and flow of commodity prices, when we will be able to realize great value from our resource endowment.

It is therefore a cruel twist of fate that my fellow Canadians’ inclination for belatedly exercising this power is by taxing and restricting the sales of these resources to our biggest customer. I think this fundamentally misunderstands the value of our resources for Canadians, and it is past time to think about it in a more sophisticated way.

Commodities are raw materials, generally energy, mineral or agricultural products. They are basic, interchangeable items that global buyers choose based on the lowest price. Because transportation comprises a big portion of the cost, proximity to buyers is useful.

Canada has been fortunate to be very close to the large American market, and the U.S. has been fortunate to be close to a significant resource producer. This mutually beneficial trade has underpinned North America’s competitiveness and stability for two centuries.

Trump has come along and disrupted this, to the detriment of both countries. But while many sectors are feeling economic pain, Trump’s actions at home and abroad have also been beneficial for Canada. Over half of our exports are commodities, and just about everything has seen a meaningful price increase since Trump came into office.

Oil is up because the Strait of Hormuz has been disrupted; gold is up due to geopolitical fears and loss of confidence in the American dollar. Those are Canada’s top two exports, and without producing another barrel or ounce, their price increases would have led Canada’s trade balance into surplus.

But because of those high prices, we will be producing many more barrels and ounces. We’ve attracted more investment to build mines and pipelines and grow production, and have diversified the customers wanting to buy those goods.

While gold and oil are our biggest commodities by revenue, this same story is playing out in copper, potash, nickel, uranium, aluminum and more. The Toronto Stock Exchange has seen world leading gains because it is heavily weighted towards mining and energy stocks. Canada has seen a significant uptick in major projects proposed and financed. We are building more ports, LNG terminals, dams, gas plants, and transmission lines because there is growing demand for these things.

Trump has given Canada one more gift: while commodities are generally interchangeable in the global marketplace, the new chaotic and turbulent geopolitical era is conferring a security premium to reliable and trustworthy suppliers. Many nations no longer want to depend on fertilizer, uranium and grain from Russia; oil and natural gas from the Middle East; or critical minerals from China. Everyone is in a trade war of one kind or another with the United States.

As a major resource exporter, every commodity cycle upswing is a generational opportunity for Canada. But this one is a once-in-a-century opportunity because most nations want to buy less from our main competitors, and more from us. This chaotic cycle will act as a ladder for Canada to not only build infrastructure and increase revenues, but also alliances and capabilities.

Some people want to take this moment to fantasize about potash or energy export taxes and oil production curtailment. They are willing to inflict pain on Canada’s producers, reduce our exports revenues, and jeopardize our reputation as a reliable trading partner to experience some short-lived schadenfreude.

The stakes and the prize are so much bigger. Canada has an opportunity to shine if we choose ambition over pettiness. Let’s focus on the good we can do for ourselves. Debating the harm we can inflict on others is a tendency about as alien to the Canadian character as you can get.

Heather Exner-Pirot is the Director of Energy, Natural Resources and Environment at the Macdonald-Laurier Institute.


Following the breakdown in U.S.-Canada trade negotiations over the weekend, Prime Minister Mark Carney is now saying that Canada has no plans to reopen talks with Washington, and is prepared to continue the trade war right up until the end of U.S. President Donald Trump’s term in 2029. But there is a chance that the current trade conflict could outlast even Trump.

Watch the video or read the transcript below to learn more.

Despite the U.S. and Canada coming very, very close to a concord on trade, it fell apart at the 11th hour.

The result? 50 per cent tariffs on more than $28 billion worth of Canadian exports. And Canada pledging dollar-for-dollar retaliation.

Now, there is still reason to believe this might be temporary. Both sides get hurt in a trade war. Canada more so, obviously, just given our relative size as compared to the U.S. market.

But the American public has never really been on board with the Trump administration’s trade war on Canada. And this means that in an America that is already pretty incensed about affordability, a whole bunch of random things are set to become unreasonably expensive.

As just one example: Canada is famously a major supplier of left-handed golfing gear. Well, all that stuff’s getting hit with the 50 per cent tariff.

But, the White House has a lot on its plate. So what if they just … don’t return Canada’s calls about trade ever again?

That’s what Prime Minister Mark Carney seems to be banking on.

In his public comments after the talks fell apart, he said his plan now is to subsidize affected industries … possibly until Trump is no longer president.

Said Carney, “we will support these businesses for as long as it takes, in other words, beyond the life of this U.S. administration.”

That might be bluster, but it’s not like Carney is feeling any political consequences from this tack. And even if all the current tariffs remain, the macroeconomic effect is probably going to be minimal. Only about five per cent of our exports are getting hit with that big 50 per cent tariff.

It’s r uinous for some of those five per cent. As one example, sculptures and paintings are getting hit with the 50 per cent tariff. So if you’re a sculptor with a lot of American clients, this is devastating.

But the pain is still slight enough, on an economy-wide basis, that most Canadians won’t notice.

So the worst -case scenario is that the status quo keeps going for another three years. And the really, really worst-case scenario is that this doesn’t become an issue that magically dissipates at the end of the Trump Administration.

The history of Canada-U.S. trade going all the way back to the 19th century has been a roller coaster of protectionism, free trade and then protectionism again.

The situation that Canada has known for the last 30 years — free trade with the United States — is the exception, rather than the norm.

And how soon we forget that when the North American Free Trade Agreement first became law in 1994, its chief opponents were not right-wingers like Trump, it was protectionist left-wingers. The same kind of protectionist left wing that’s having a bit of a moment in the U.S.

So maybe this is a temporary trade war with the Americans until we can get back to broad, tariff-free trade again.

Or, maybe, after a couple years of this, we’ll find that U.S. governments — no matter what their political orientation — are actually kind of fine with a reality in which Canadian fishing rods, diamonds, paintings and sculptures, among other things, are mostly not seen in U.S. stores anymore.


Canada on August 25, 2026, announced counter-tariffs on US goods ranging between 15 percent and 50 per cent, intensifying the trade war between the historically close allies.

Welcome to Trade Wars, the reality show that pits the mighty United States of America against the mouse that roared, aka Canada. How’s everyone feeling today? “Kiss my ass!” yells Ontario Premier Doug Ford. “Flunky! I will rename Lake Ontario Lake America, ” claps back U.S. President Donald Trump. Insert laugh track, cut to a commercial for a Ford F-150 pickup, and check out the ratings — 76 per cent of Canadians agree with Prime Minister Mark Carney’s decision to quit the talks. Everyone’s watching — what a hit.

But this isn’t a triumph. And it isn’t fiction. It’s a real dispute, with real life consequences for millions of people. It represents the sad demise of over 50 years of economic integration, starting with the Canada–United States Automotive Products Agreement of 1965, through free trade deals signed in 1988, 1992 and 2018, which have seen both countries prosper through increased trade and economic activity. All of which Trump calls a “rip-off,” even though he was at the table doing the last deal.

So now, it’s elbows up — and out. Canada is seeking new trading partners, inking 20 agreements in the last year alone. Our trade with the U.S. has dropped from 76 to 68 per cent of total trade since 2024, and will no doubt decline further with the imposition of matching tariffs on $26 billion of U.S. imports, including steel, agricultural equipment, appliances.

We’ve come full circle, back to the 1960s, when philosopher George Grant lamented that Canada had become a “branch plant economy,” of the United States. He blamed the Liberal party for surrendering to “continentalism,” whereby American companies were buying out Canadian businesses or opening their own here, effectively making us a U.S. subsidiary.

Grant had witnessed the failure of populist Progressive Conservative Prime Minister John Diefenbaker to diversify 15 per cent of Canada’s trade to Great Britain in 1957, followed by the subsequent Liberal government of Lester B. Pearson signing the Auto Pact and embracing closer economic ties with the United States. The pendulum then swung back in the 1970s, when Liberal Prime Minister Pierre Elliott Trudeau tried to trade more with Europe and created the Foreign Investment Review Agency, designed to prevent takeovers but criticized for stifling investment.

Diefenbaker and Trudeau failed to drag Canada out of America’s orbit, in part because during the Cold War with the Soviet Union, Washington was our friend, not foe. Today, things are different, but Trump is, increasingly, an Emperor who has no clothes

For the American president has a major weakness: underestimating his adversaries’ resilience. This is on full display in that murderous regime of Iran, where his war has now dragged into its seventh month. And it is on display in erstwhile best buddy Canada, where rather than roll over and accept unacceptable trade terms, we walked away and basically gave America the finger.

Some analysts say those terms — attacks on the French language, curbing our ability to trade with other nations, and continuing to tariff pickup trucks at a higher rate — may have been a deliberate poison pill, inserted at the 11th hour by Commerce Secretary Howard Lutnick to scupper the deal and make political trouble for Carney. Whether true or not, the reality is that we were treated badly, and the prime minister was right to say enough is enough. You don’t turn on an ally whose people have fought and died alongside you, whose cheap oil has powered your industry for 100 years, and whose people have cultivated ties of friendship with you for generations.

As the insults fly and the temperature mounts, Carney has emerged as the only reasonable actor in this drama. It’s one that all the world is now watching — and could script their own sequels dealing with America.

Tasha Kheiriddin is Postmedia’s national politics columnist.


MONTREAL - Pro-Palestinian protesters harass people leaving Montreal's city hall after the vote against a motion for the city to declare Israel a genocidal apartheid state and cut ties with the city passed only after having these elements removed from it on Monday evening. Terry Newman. National Post

MONTREAL — In early June, Projet Montréal filed a motion calling on the city to suspend institutional ties with Israel and refer to it as an “apartheid state” and a committer of “genocide.” On Monday night, sanity prevailed. The motion passed, but as a watered-down version with those features removed. Pro-Palestinian protesters outside were less than pleased and directed their aggression at those leaving the building, myself included.

Before the vote, the pro-Palestinian protesters gathered outside Montreal city hall chanting phrases such as, “ Viva, viva, intifada. Long live the intifada ,” Israel are terrorists, Soroya (the mayor) is complicit ” and “ Israel are terrorists, Montreal is complicit .”

Also present outside city hall before the council meeting began at 1 p.m. were members of Independent Jewish Voices , a small group that only concerns itself with the Palestinian cause, along with some communists waving flags that read , “From the river to the sea,” and “We are all Palestinians.”

Members of the public flooded into the chamber outside the council meeting. Among them were friends of Alex Look, a 33-year-old Montrealer who was murdered by Hamas on October 7. They wore stickers with Look’s face as a reminder of the brutal, Hamas-apologist ideology masquerading as a human rights movement at the city’s gates.

At 7 p.m., members of the public were invited to ask questions. Adrian Leroux, a pro-Palestinian activist, called for the city to “immediately suspend ties with the rogue state of Israel,” which he referred to as an “apartheid regime.” At one point, he said that Israel “endangers Jewish communities in Canada by live-streaming a genocide in their name.” He then asked Mayor Soraya Martinez Ferrada if she saw that it had become “politically impossible” for her to not pass the motion .

Montreal city council has a rule allowing the chair to limit the number of questions that can be asked about the same issue to three, and at times on Monday evening, the chair of the council meeting, Ensemble Montréal’s Chantal Rossi, interpreted broad issues relating to the protesters outside as being part of the motion, so the speakers were cut off and unable to ask their questions.

For example, Alyssa Yuffe wanted to bring up that the group Montreal Apartheid was using the Montreal logo, which is the city’s intellectual property.

At one point, Ayrik Armani, an Iranian, told the council that he had been a political prisoner in Iran, and had witnessed firsthand how “extremism, intolerance and division can gradually undermine the society,” and that he now sees “troubling patterns emerging here in Montreal.” Armani told the council that he repeatedly sees individuals at demonstrations who support the Islamic Revolutionary Guard Corps, which he pointed out is a listed terrorist entity in Canada.

Armani told the council that some of these same groups are now advocating for Montreal to cut ties with Israel, and that Iranians are “deeply concerned that this rhetoric and political pressure could further undermine Montreal’s security, social cohesion and the sense of safety for its residents.” Armani asked why the city isn’t doing more about individuals who are demonstrating in support of the regime. At this point, Armani was cut off and told that this question was about the motion.

Arlene Yuffe wanted to discuss what she referred to as “Quebec historical and cultural patrimony.” She told the council that, “Individuals from Montreal4Palestine climbed scaffolding and took a photo in front of Mary Queen of the World Cathedral, a major church, and they threw smoke bombs.” She was told that her question would not be answered.

Yet Yuffe was absolutely correct. Montreal4Palestine did this, and proudly posted evidence of it on its Instagram page. But she was cut off, as if her concerns about this group were part of the motion being debated that evening. Montreal 4Palestine is the same group that has held mass Muslim prayers in front of Montreal’s Notre-Dame Basilica, which many felt were acts of intimidation.

Shortly before 10 p.m., the council voted on the amended version of the motion, which passed 54-6. The pro-Palestinian protesters outside were not pleased. Upon exiting the building, myself and others, including council members, were subjected to harassment, despite the large police presence.

The first thing I heard upon exiting city hall was the chant, “End the Zionist occupation.” Then, a stream of protesters, some wearing keffiyehs — the same garment Michael Zehaf-Bibeau, the terrorist murderer of Cpl. Nathan Cirillo, wore , a fact most Canadians appear to have memory-holed — started screaming the phrase, “Shame on you!”

One pushed my camera, which I was holding up in front of me for my protection, with her hand. Another, holding a flag, yelled at me several times, “Did you get your paycheque?” Walking away, we heard them shouting, “You can’t hide, we charge you with genocide.” They were still there, yelling , 20 minutes later when I was being driven home.

It has become fashionable for activist groups and political parties to try to pressure local municipal councils to pass motions and create policies on matters outside of their jurisdiction, like international affairs. Montreal is no stranger to this.

In 1987, then-mayor Jean Doré declared Montreal “apartheid-free,” and was able to get legislative powers allowing the city to discriminate against companies that had investments in South Africa when it practised apartheid.

Apartheid South Africa and Israel are clearly different, but beyond that, the issues of foreign countries should not be the business of far-off city councils, precisely because they do not generally understand the details and nuances.

If the original motion had passed, pressuring the city to cut ties with Israel despite the fact that Israel is not an apartheid state and has not been found guilty of genocide, who knows how this would have manifested in terms of policies and harassment towards Jewish businesses connected to Israel.

Thankfully, the city council of Montreal overwhelmingly chose to vote for the peace and cohesion of its communities instead of a motion designed to misinform and drive a wedge between the city’s Jewish community and everyone else, which would, no doubt, be used to intimidate and harass them.

National Post

X: @terrynewman


Canadian Prime Minister Mark Carney, left, speaks about the trade dispute with the United States at the Davie Shipyard in Levis, Que., on Monday.

A week after Prime Minister Mark Carney announced a new deal to expand the Churchill Falls hydroelectric project, he held a press conference in Lévis, Que., on Monday to announce a contract to build six icebreakers for the Coast Guard at the Chantier Davie shipyards.

While Canada desperately needs electricity to power its economy and icebreakers to protect its shores, Carney has yet to demonstrate that his government is capable of enacting economic policies beyond spending massive amounts of borrowed money.

Although Monday’s announcement was years in the making — Ottawa announced plans to purchase the new icebreakers in 2019 — the prime minister did his best to tie it to the trade negotiations with the United States that broke down on Friday.

“We’re here today as part of Canada’s change in tack,” Carney said, flanked by Quebec Premier Christine Fréchette and key federal and provincial ministers, with a view of the St. Lawrence in the background.

After explaining that Canada “worked relentlessly and in good faith with the United States to negotiate a new comprehensive trade agreement” but was not prepared to “accept what the U.S. had offered,” Carney claimed that, “Building at home and diversifying our trade abroad” has been “Plan A from the start.”

Part of this strategy, according to the prime minister, includes expanding ports and having the icebreakers necessary to keep vital waterways open year-round. Thus Ottawa is spending $11 billion to build six icebreakers to replace the Coast Guard’s aging fleet, the first of which is expected to go into service in 2032, with the remaining vessels delivered by 2038.

“That is what being masters of our destiny means,” Carney said.

There’s no question that these ships are necessary, especially for a northern country that has seen its relationship with the U.S. reach historic lows and is aiming to protect its sovereignty in the North against an increasingly militaristic Russia, whose icebreaker fleet is more than twice as large as our own.

The announcement was also well-timed, as it allowed Carney to sell a defence procurement as part of his overarching economic strategy, noting that the new boats will be made with Canadian steel and that the construction phase is expected to create 5,000 jobs and contribute $650 million a year to Canada’s GDP.

It also gave the prime minister another opportunity to tout last week’s Churchill Falls announcement , which will be supported with $10 billion in federal financing and other financial supports.

Noticeably absent from his remarks was any hint that Ottawa has a strategy to attract private investment. The Liberals have always been good at writing large cheques, even when the coffers are dry and programs are being financed on the backs of future generations. But ports and icebreakers are of little use if Canadian industry isn’t producing the products that the rest of the world wants to buy.

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

If that comes to fruition it will be a major milestone, but this country still needs a massive influx of private capital to build the mines and pipelines necessary to extract our natural resources and carry them to market, along with a business environment that gives companies an incentive to produce in Canada at a time when U.S. President Donald Trump is doing his utmost to drive them away.

As Adam Pankratz writes elsewhere in these pages, the future of a mine looking to tap one of the world’s largest undeveloped gold reserves in British Columbia has been called into question after First Nations leaders withdrew their support . That mine has been in limbo since it received environmental approvals more than a decade ago and its private-sector proponent says it has already sunk $1.2 billion into the project.

Meanwhile, Carney’s Major Projects Office is currently reviewing 18 infrastructure projects to see if the government deems them worthy of being fast-tracked through this country’s Byzantine approvals process. But after nearly a year in operation, none have so far been green-lit.

None of this signals to investors that Canada is a safe place to park their money, or that the government is serious about cutting through the masses of red tape or dealing with the myriad of ethnic, regional and political divisions that work to ensure Canada can’t build nice things.

On Monday morning, hours before Carney’s shipbuilding announcement, Trump took to Truth Social to announce that as of Jan. 1, “Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%.” His message to industry was clear: “Build in the U.S. and there are ZERO TARIFFS.”

Asked about this at his press conference, Carney said that Trump’s response was “not a surprise,” and argued the new tariffs would hurt workers in Michigan, Ohio, Kentucky and Alabama who “rely on Canadian demand,” while saying that his government remains focused on “co-operation, putting workers, families first, investing in technology.”

Which is all fine and dandy, but will do nothing to keep auto manufacturers in Canada if Trump follows through on his latest tariff threat.

Given that the prime minister has already said that supports will be made available for companies affected by the latest round of tariffs, we can expect that even more taxpayer money will be used to prop up the economy. But it doesn’t take a central banker to realize that the economy cannot be indefinitely kept afloat with public debt.

At some point, the government needs to focus on creating a business environment that’s conducive to attracting private capital, which largely means getting out of the way and allowing the private sector to do what it does best.

The big question is: when Carney says we need to be “masters of our destiny,” are the “masters” he’s referring to Canadian entrepreneurs and captains of industry, or Mark Carney and his Liberal politburo?

National Post
jkline@postmedia.com
Twitter.com/accessd


Prime Minister of Canada Mark Carney (L) speaks with U.S. President Donald Trump during a family photo at the G7 Summit on June 16, 2026 in Evian-les-Bains, France.

Prime Minister Mark Carney insists Canada is “at war” with the U.S. after trade talks between the two countries fell apart over the weekend. Fortunately, the war is a rhetorical one over commerce rather than a military conflict, for which Canadians are woefully unprepared. But the exchange of talking points instead of bullets is foolish and destructive enough, and evidence of the futility of managing trade rather than simply getting governments out of the way of people freely exchanging goods and services.

“You’re at war when you get attacked. We got attacked,” Carney insisted towards the end of his Saturday press conference after the failure of the trade talks.

For his part, U.S. President Donald Trump responded that “Canada wants the benefits of being a State, without being one.” He complained that Canadians have “charged our great farmers, for many years, massive amounts of Tariffs. No more!”

Amidst recriminations as to who caused the breakdown — Politico reports the talks “ultimately buckled under a combination of last-minute demands and political constraints on both sides” — the two national leaders are threatening new trade barriers in addition to preexisting tariffs. Pundits and policy experts are digging through such details as have leaked to figure out just where the deal went off the rails.

Strictly speaking, Carney is the more credible figure in the dispute since he’s right that “America has changed” and the U.S. government is trying to “put a series of tariffs on its closest allies and use economic integration as a weapon.” Trump has been notably belligerent in the process of reshaping trade — as he is in all things — making Carney’s “war” talk somewhat believable.

But the parsing of trade demands and personalities misses a larger point. While Donald Trump can be a bully and Carney retains his calm while sniffily complaining about insults to the sovereignty of his country, both of them, and their flunkies, have engaged in the presumptuous business of trying to negotiate the rules of exchange between millions of buyers and sellers in two countries.

We’d all be far better off if even just one of them stepped aside and let matters work themselves out.

Decades ago, economist Milton Friedman noted that protectionists constantly hand-wave away arguments in favour of free trade as “fine in theory” while insisting that trade must be “reciprocal” — precisely the argument the Trump administration makes as it reworks already rule-burdened trade deals.

At a time when Japan was the feared economic behemoth that was supposedly going to eat the world, Friedman warned that tariffs “raise prices to customers and waste our resources.” He argued that when the governments of other countries shield their markets from competition, instead of benefiting their economies they hurt their people and businesses.

“The wise course for us is precisely the opposite — to move unilaterally toward free trade. If they still choose to impose restrictions, that is too bad but at least we have not added insult to injury.”

Evidence for Friedman’s position is found in a recent New York Times article about the vulnerability of electricity grids, largely because of their dependence on expensive, hand-crafted power transformers that are difficult to replace. While U.S. companies are building manufacturing facilities and developing alternative transformer technologies, they’re hampered by tariffs on copper and aluminum. “Costs are up almost 20 percent,” an industry executive told the Times. “We need relief on all of the metals.”

The next massive blackout may happen because trade barriers raised the cost of preventing it beyond the industry’s ability to afford resilience.

Just because Trump is an economic ignoramus who thinks economic activity can be successfully managed by government, despite a long history of evidence to the contrary, doesn’t mean that Carney should follow his example and contribute to the conflict.

Quebec-born Vincent Geloso, an economics professor at Virginia’s George Mason University, argues that “Canada’s response to American tariffs should be incredibly simple: slash our own tariffs and trade barriers. And do not impose counter-tariffs.”

He makes the same argument offered by Friedman, that tariffs hurt consumers and businesses in the countries that impose them. “How exactly does making Canadians poorer punish Donald Trump? If the Trump admin wants to shoot itself in the foot, the Carney government is under no obligation to shoot Canadians in the face with a twelve gauge shotgun for the sake of ‘reciprocity.’”

Or, as the late British economist Joan Robinson wrote , “The popular view that free trade is all very well so long as all nations are free-traders, but that when other nations erect tariffs we must erect tariffs too, is countered by the argument that it would be just as sensible to drop rocks into our harbours because other nations have rocky coasts.”

In a 2025 paper , Geloso pointed out that Britain benefited from repealing “Corn Law” tariffs on imported grain. “The Corn Laws had the effect of keeping food prices in the UK 9% higher relative to world markets. Since food items were a major component of the budgets of the poor, the repeal of the tariffs was largely a ‘pro-poor’ policy.” He added that most 19th century trade liberalization was unilateral, with no expectation that other nations would necessarily reciprocate. Liberalizing nations quickly prospered.

Yes, it’s better when all governments get out of the way and let people and businesses exercise their right to engage in voluntary exchange without regard to borders. But holding trade hostage to the intelligence, decency, and economic wisdom of political leaders in multiple countries is a sucker’s bet. Inevitably, populists with neo-mercantilist ideas arise and burden their own people with tariffs while claiming to help them.

In the days to come, people will spend much time digging for and through the details of the failed U.S.-Canada trade talks. There will be much debate over what was fair and what was not.

But that’s a waste of time. The only definition of “fair” that matters is what people voluntarily agree to in their own dealings. If, under current management, the U.S. won’t embrace free trade policies that make everybody wealthier, Canada should do so on its own. Canadians would be freer and more prosperous by avoiding the American mistake of burdening commerce with tariffs and conditions.

National Post


A woman stands next to Iranian-made Zolfaghar missiles displayed in Azadi Square in Tehran on July 24.

For decades, Western governments feared the consequences of confronting Iran, the world’s foremost state sponsor of terrorism. Today, they should be equally concerned about the consequences of failing to capitalize on the significant damage inflicted on the Islamic Republic.

Honest Reporting Canada has spent years documenting how Iran’s malign influence is too often ignored, not only through its terrorist proxies and human rights abuses, but through their insidious efforts at spreading propaganda in the West.

Our work monitoring Canadian media has given us a front-row view of how easily the Islamic Republic’s activities can disappear from Western public discourse, even as their consequences reach directly into our own communities.

The United States and Israel have severely degraded Iran’s military capabilities in recent months. Its nuclear infrastructure has been decimated , its ballistic missile arsenal degraded , its strategic air defence systems destroyed and 52 senior regime figures have been eliminated . Hezbollah and other members of Tehran’s terrorist network, including Hamas and the Houthis, have been weakened .

More important, the premise underlying Iran’s strategy for three decades has been shattered. Tehran believed it could attack Israel through proxies and would therefore be immune from attack while simultaneously advancing its atomic program as a nuclear threshold state and threatening Western interests, all while serving to insulate Iran from the consequences of its nefarious actions.

That calculation no longer holds.

But military setbacks do not necessarily translate into lasting strategic defeat. Iran’s immediate objective is no longer victory, but outlasting the United States.

If the regime can withstand the current pressure and eventually persuade Western governments to exchange sanctions relief for another diplomatic agreement, it may acquire the two things it needs most: money and time, both of which serve as patient pathways to acquiring atomic weapons and mitigating the regime’s existential concerns.

That would be a serious mistake.

Iran built its power painstakingly over decades: nuclear facilities, ballistic missiles and drones, Hezbollah in Lebanon, Hamas and Palestinian Islamic Jihad in Gaza, militias in Iraq and the Houthis in Yemen. Together, they gave Tehran strategic depth and geographic spread.

Much of that architecture has now been damaged, degraded or destroyed. The challenge is ensuring it stays that way.

Iran will almost certainly try to reconstruct nuclear facilities in harder-to-reach locations. For example, Pickaxe mountain , a site widely believed to possess Iran’s stockpile of highly enriched uranium. Iran will also likely endeavour to disperse missile production sites and rebuild its regional terrorist networks.

With its conventional capabilities diminished, it has every incentive to rely more heavily on terrorism, cyberattacks, transnational repression and using the Strait of Hormuz as a tool of economic coercion by leveraging its geographic control over the vital energy chokepoint.

And the Islamic Republic’s reach extends far beyond the Middle East.

Canada has already seen what happens when Tehran’s intelligence apparatus reaches into Western societies. United States intelligence has warned that Iranian intelligence services have worked with criminal networks to threaten, intimidate and target dissidents and other perceived enemies abroad. The Canadian government has also warned Canadians about a growing number of “state threats” from Iran and their activities in North America, including attacks targeting Iranian dissidents, journalists and Jewish and Israeli communities.

Iran’s tentacles extend into Western streets, financial institutions and communities. When Tehran cannot reach its enemies with missiles, it has demonstrated a willingness to use proxies, organized crime syndicates and covert operations instead. The Iranian regime and its proxies are linked to a highly coordinated “ criminals for hire ” network in Canada that has weaponized local street gangs and vulnerable youth to execute shootings, arson attacks, and intimidation campaigns against Jewish and American targets.

This is precisely the dimension of the Iranian threat that Western media and policymakers too often treat as a series of disconnected stories. Our experience monitoring Canadian news coverage has shown how easily Iran’s sponsorship of terrorism, regional proxies, nuclear ambitions and activities against dissidents in the West are reported separately, obscuring the strategic architecture connecting them.

We have repeatedly urged Canadian journalists and decision-makers to connect those dots rather than presenting the Islamic Republic as merely another Middle Eastern government with which the West has a disagreement.

Iran does not necessarily have to defeat its enemies. It has to outlast their political attention spans, and Canada has a role to play in preventing that dangerous outcome.

Ottawa’s 2024 designation of the Islamic Revolutionary Guard Corps (IRGC) as a terrorist entity was important, but designation cannot substitute for muscular policy. Canada should work with allies to enforce sanctions aggressively, deport regime-linked officials, disrupt IRGC financing and ensure Canadian financial institutions and property markets do not become refuges for regime-connected wealth.

Canadian policy should distinguish clearly between the Islamic Republic and the Iranian people. Tens of millions of Iranians have lived under a regime that restricts political freedom, represses dissent and devotes enormous resources to military adventurism abroad. Many have risked imprisonment and death demanding freedoms Canadians regard as fundamental. Western governments should be extremely careful about rescuing their oppressors in the name of regional “stability.”

None of this requires an American invasion of Iran. Sending Western armies into a country of over 93 million people could turn an unpopular dictatorship into the defender of Iranian nationalism and produce consequences nobody can confidently predict.

The alternative is sustained pressure: keep sanctions tight, target the IRGC and its financial networks, help Iranians circumvent censorship, expose corruption and prevent Tehran from rebuilding the strategic capabilities that created this crisis.

There are several possible outcomes.

The worst would be a superficially attractive agreement that restores Iranian oil revenues and releases substantial frozen funds while leaving the regime free to reconstruct its military power. Five or ten years from now, the West could find itself confronting the same threat under considerably worse circumstances.

Another possibility is prolonged containment, with a weakened Islamic Republic surviving while its attempts to regenerate strategic capabilities are repeatedly frustrated.

And there remains the possibility that military humiliation, economic pressure, internal divisions and popular opposition eventually produce political change from within Iran itself. Nobody should assume this will happen. The Islamic Republic has spent nearly five decades building an extraordinarily effective apparatus of repression.

But Western governments are under no obligation to guarantee the Islamic regime’s survival.

The United States and Israel have changed the strategic balance. The question now is whether their allies have the patience to preserve it. Canada has a moral responsibility to help denying the Islamic Republic the resources it needs to rebuild its machinery of aggression and repression while leaving Iran’s future to Iranians themselves.

To reiterate, Iran does not need to win this war. It needs the West to lose interest in finishing what it started. Let’s not make that mistake.

National Post

Mike Fegelman is the executive director of HonestReporting Canada, a non-profit organization ensuring fair and accurate Canadian media coverage of Israel.


Canada has benefited greatly from our relationship with the United States and while we should be negotiating hard with regards to trade, it shouldn't be done in anger, writes Robin Skies.

Adam Beattie, most commonly known online as iamRobinSkies, is a political strategist, columnist, content creator and campaigner from Vancouver, B.C. You can follow him @iamrobinskies on all social platforms.

It is normal to get angry and respond negatively to a perceived injustice, especially when that injustice is perpetrated by someone you would have regarded as a friend. However, anger blinds your ability to be practical and often leads to unnecessary, unforeseen consequences — consequences that could be difficult to undo and could harm you and the people you love for a very long time.

We as a country have benefited greatly from our relationship with the world’s largest consumer economy. Being able to trade with a stable, friendly and hard-working neighbour has been the greatest gift God has ever given Canada, other than our bounty of natural resources and immense coastlines.

Which is why I think the general attitude that many Canadians have towards the United States, either because of this trade dispute, or exacerbated by it, is unbelievably counterproductive, and how we respond next will dictate Canada’s future for generations to come.

Every time we boo Americans’ national anthem , argue that they’re evil, thump our chests because we think they’ve declared war on us and tell our allies that the old world order is coming to end , while building inroads with America’s adversaries , we set ourselves back from actually making progress.

To be clear, I understand that Canada didn’t start this trade dispute and that as a country we need to use every tool at our disposal to negotiate a fair resolution, but just like being cut off in traffic isn’t your fault, what you do next can dictate whether or not you end up getting home alive.

These prolonged trade negotiations are going to be hard on Canadians. Last year around 72 per cent of our exports went south and a 50 per cent tariff on even five per cent of our exports could be catastrophic for many people. Responding with anger feels good in the moment but only serves to escalate the dispute, and what comes as a result could mean devastation for many people who are currently struggling to hold on.

There are many people in Canada, including Ontario Premier Doug Ford, who seem giddy at the idea of this trade dispute harming Donald Trump during the 2026 midterms. Ford said in February that “ the walls are closing in ” on the president due to this “economic war,” specifically in reference to the upcoming elections.

If you’re also excited about the idea of Trump suffering during the midterms, then I’m sorry to break it to you but your priorities are in the wrong place.

Now don’t get me wrong; I think Canada should use whatever leverage it has to get the best deal imaginable and I think we should have been using that leverage to close a deal months before it got to this point.

I know a lot of Canadians think that patriotism means hating the United States, hating Donald Trump, hating our neighbours to the south and hoping that the worst happens to them because they are so terrible and mean, but the reality is that that isn’t patriotism, it’s spite. Spite, animated by resentment, that has unfortunately captured much of the Canadian spirit as of late.

Which is entirely unfair considering that over the past 159 years of our existence we have had the pleasure of living next to a relatively friendly neighbour who has always looked out for us. A neighbour that we have benefited greatly from simply by existing next to them. We are rich because we trade with the United States and if that ends we won’t be as rich anymore and the things that make us Canadian, like our health-care system, will be harder to pay for.

We should be negotiating hard. We should walk away from deals that don’t serve our interests and we should work for the best possible outcome for both parties. But what we shouldn’t do in the midst of that is embrace an attitude of disrespect driven by entitlement towards a country that we depend on for so much.

Donald Trump has only two years left in his second term as president. These tariffs might not exist after 2028 but what will exist and will be remembered by future U.S. administrations is how we responded to this dispute.

If we continue to tell the world that we’re done with America, that it cannot be trusted and that we want to go our own way, it might actually respect that declaration, which would ultimately harm us more than anything we’re facing right now.

National Post