Michael Higgins: Canada to America — Make a deal or watch how angry we get

Prime Minister Mark Carney has the luxury of vacationing in Tuscany as our U.S. relationship crumbles to dust but Canadians should buckle up for a rough ride.

Trade negotiators on both sides are reported to be working feverishly on a Canada-U.S. interim trade deal before Donald Trump’s new tariffs come into effect next Wednesday.

But what will Canada concede in any deal and how long will it last before the U.S. president decides to impose other tariffs based on a new excuse such as Carney not sending him a postcard from his Italian hideaway?

Amid all this bewildering uncertainty and intense negotiations comes a new warning tactic from the Canadian government to the U.S.: If these tariffs go ahead then hell hath no fury like a nation scorned.

Two sources told National Post that Canada “made it clear to the U.S. last week that if the tariffs were to go forward on Aug. 19, it will be difficult for Canada to make a deal.”

According to a report in the Globe and Mail, Janice Charette, Canada’s chief trade negotiator, told her American counterparts that if Trump imposed new tariffs then the federal government would not be able to control the premiers or the public.

What an astonishing threat to make. The federal government is absolving itself of any responsibility should a deal fail while also hoping that the likes of Doug Ford, David Eby and the guy on the Toronto subway do its job.

Presumably, Charette was indicating that a lack of a new deal would mean the U.S. booze ban — a major irritant in America — would stay in place while maybe a revitalized Elbows Up campaign would convince Canadians to once again forego trips to Florida and all parts south.

A U.S. factsheet issued in July about Trump’s proposed new 50 per cent tariffs on certain goods, noted that “Canadian imports of U.S. alcoholic beverages decreased by about 81%, or $582 million, compared to the same period in 2024-2025.”

That’s U.S. millions so $812 million Canadian. We are talking big bucks and American breweries and wineries are hurting.

Meanwhile, Canadians are still foregoing trips south of the border. In July, Canadians made 2.3 million trips to the U.S., an increase of 10 per cent over last year. But trips by cars, the main method of travel, were still almost 30 per cent lower than in 2024.

The boycott of American goods and travel won’t end overnight.

But it seems a bit rich to put Canadians so squarely in the negotiating firing line while the prime minister is sipping Chianti in Tuscany. It is ordinary Canadians who have the most to lose and the federal government should be making more of an effort to resolve this dispute at the bargaining table rather than making threats that rely on the premiers and the public.

Just how much is at risk for Canadians was documented this week in a report by the Canadian American Business Council (CABC).

The report envisaged three scenarios and their possible consequences. A “status quo” scenario reflected the current tariffs war but of most importance were the scenarios under which the Canada-U.S.-Mexico free trade agreement (CUSMA) was either renegotiated or broke down.

A breakdown of the CUSMA agreement would see the loss of 102,000 jobs, an average household losing almost $6,000 in income and a loss of $271 billion in GDP over 10 years.

Conversely, renegotiating CUSMA would result in the creation of 98,000 jobs, an increase in average household income of $4,166 and a rise in GDP of $253 billion in 10 years.

When affordability, food and house prices are on the minds of many Canadians, these are not trifling numbers.

But Carney seems in no mood to make a quick deal. In July, he told provincial and territorial premiers at an Ontario retreat that his team was “only going to accept the best deal for Canada.”

And to diversify the Canadian economy away from the U.S., the prime minister has reached out to the likes of China and Qatar.

Whether Canada should be getting into “strategic partnerships” with these countries is one issue, but a bigger one is that there has been no new trade agreements (although tariffs were lowered under a deal with China.)

But as the CABC report noted, Canada and the U.S. are economically tied at the hip. If CUSMA (also known as USMCA) breaks down, or the status quo continues, even trade agreements with other countries is not going to rescue Canada.

“Because the two countries are each other’s most natural trading partners — integrated over four decades through CUSFTA, NAFTA and USMCA — trade diversion to third countries is costly and, at best, partial,” notes the report.

And Canada has the most to lose.

“Given the highly dominant position of the US as Canada’s largest trade partner to begin with, the US still accounts for 67% of Canadian exports and 42% of Canada’s imports even under USMCA Breakdown.”

In combatting Trump, Carney’s defining mantra is to build big, fast and bold. But he has done none of these things. Now, in trade negotiations, the Liberal government appears to have abdicated its responsibility to secure a deal and instead threatened the U.S. with the fury of Canadians.

Canadians are mad, they have a right to be. But pointing this out to the U.S. seems like an act of desperation from a government devoid of leadership, negotiating talent or ideas.

“Make a deal or we won’t buy Napa Valley wine or visit Florida.” Well, maybe it’ll work.

National Post