alt Hacker NewsCanada suspends trade negotiations with USA and match tariffs dollar for dollar
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Huh 30% of our lumber just got 50% more expensive. Good thing we don't have shortages of affordable housing that need new construction to solve. Brilliant stuff Donald. Truly some 4D chess moves.
This was totally the right move, if for no other reason than it's the only thing that this US admin will respect in the long run.
Being in Canada though this does look v. short sighted of the US. All this is going to achieve is pushing Canada much closer to other countries, particularly China, which at least superficially these negotiations were meant to prevent.
This is the way. If the US imposes tariffs, impose tariffs on US goods.
The US administration twists facts to suit their agenda. For example, they often complain about the trade deficit the US has with other countries. However, that deficit often (depends on the country) only exists if you exclude digital goods (Microsoft, Google, Apple, etc.).
If the rest of the world were to restrict the import of those digital goods, in the interest of fairness, the tech lobbyists would swarm D.C. in panic.
Good for Canada, quite a shame the EU folded so easily
I’m interested to see if this spurs other countries to push back on this administration. Once you get a couple of countries to collectively stand firm is when things take a turn. Bullies can only push for so long
It has been shown time and time again that the only thing the US administration respects is brutish headbutting, so I cannot blame the Canadian government for responding with such a stance. It is unfortunate for everyone though that it is happening. Ultimately, these tariffs just tax the consumer for no real gain on either side. I think I speak for many when I say 2028 cannot come soon enough.
Nice to see them putting up a fight. Though I assume this will cause pain for everyone.
One note: aren't these sentences strange - like a series of half-thoughts? Especially the 2nd paragraph.
> Our government understood, before many, that America is altering all its trade relationships. Putting tariffs on its closest allies and charging for access to its vast market. > > We have worked in that context. To strike a fair deal that would provide the best access to the U.S. market and greater certainty to Canadian businesses and workers.
I wonder what would happen if Canada taxed electricity exports to the US, and used the money to directly subsidize other exported goods the US applies tariffs to?
Reciprocity, if well designed, automatic and generalized, is a great diplomacy tool.
Politicians tend to not want to do things that display them as directly responsible for eroding their support base’s quality of life.
This is on targeted industries, not on 50% of all trade. In particular, the largest industries are
Motor Vehicles, Alcohol, and Dairy per
https://www.newsweek.com/full-list-of-us-trade-tariffs-hitti...
Won’t work out well for either side, namely citizens and leadership aside.
Wearing my forecasting hat…
Canada holding $200 billion in USA treasuries, one of the largest exporters of oil into the USA, and integrated supply chains for everyday goods. A fast and painful price shock is coming for every average American.
Canada has and will continue to be very dependent on the USA. No amount of new trade partners can change the fact that the largest economy in the world is a 2-hour trip down the road while everyone else is an ocean apart. This has a risk for long-term price pain for decades.
Its nice to see some backbone, but the challenge for Canada is that it’s broadly in a weak negotiating position here. Generally speaking Canadian companies need access to the US market a lot more than US companies need access to the Canadian market.
The average American suffers being hated for this government and I say this currently sitting in a town filled with fly in rich American tourists to keep it alive. IMO the only retaliatory pain point for Americans to start to care will be taxing discounted oil, electricity, fertilizer, and transits of everything to Alaska. But they’ll just blame rather than support Canada. I don’t like Doug Ford or his policies but hopefully he brings up the electricity thing again as leverage because it won’t happen in the other sectors given AB separatism and SK being, well, SK.
Canada needs to create an "Economic Reparations Fund" to help those workers and companies harmed by trump's tariffs. Its initial funding should come from selling $10B of US bonds (Canada is ~5th largest holder) and a 5% surcharge on oil exported to the US. US already extracts a 12-22% discount off world oil prices from Canada (who's taking advantage of who?) so 5% shouldn't be an issue. As needed to cover damages, more bonds could be sold and the oil surcharge could be raised.
Negotiating with the Trump administration is completely pointless, and can even result in your own government buildings being bombed while negotiations are still going on.
The only argument bullies understand is being punched in the face.
I wish more countries wiuld have the courage of cutting off ties with the US.
I've always said that the only way Trump would "Make America Great" would be to show the world how completely hollowed out by kleptocrats we've become.
These moves increase other countries independence of us, lessening our power and forcing us into a more post America world.
If Trump isn't a double agent then he missed his calling. It feels like every decision they are making is intentionally the "wrong" one.
Is YC News an American website? It seems like all the comments are advising against American interests with regards to tariffs.
I get it, but tariffs will only make things more expensive for Canadians, too.
I've got a better idea.
1) Repeal all DMCA-like laws. Make it explicitly legal to break a digital lock to repair a device, run custom code, install third-party parts, or just tinker and hack with your own devices and software.
2) Ban parts-pairing. Prohibit manufacturers (looking at you Apple & John Deere,) from using cryptographic serialization to block independent mechanics and technicians from swapping parts.
3) Legalize "Adversarial Interoperability" (https://www.eff.org/deeplinks/2019/10/adversarial-interopera...)
4) Copyright reform.
That's it. This would make things cheaper and better for Canadians. Lutnick and Trump would seethe eternally, but it would be downright excellent for Canada and a shining beacon unto the world.
For some perspective about what’s being negotiated:
“What’s at stake in the Canada-U.S. trade deal? How looming tariffs could cost Canada 90,000 jobs”. Trevor Tombe, professor of economics at the University of Calgary
https://thehub.ca/2026/08/20/whats-at-stake-in-the-canada-u-...
Can the US even afford a trade war, they are beginning to find borrowing more money increasingly difficult… currently the debt is around $130k for every man, woman and child in the US.
Reciprocal tariffs alone don’t make much sense, it’s just making things for Canadians more expensive with an adversary that’s larger and can sustain them longer (although how long remains to be seen with guilt yields rising.)
If they really want to hurt them start making it legal to circumvent DRM on American products and allow build meaningful replacements.
True North, Strong and Free
The Art of the Lose-Lose Deal!
Note that these new tariffs are on goods covered by CUSMA, making that treaty inoperative. Pity it’s one Trump signed…
One must stand up to bullies otherwise they’ll keep at it. Until the US population feels the pain the rest of the world has been dealing with, nothing will change.
I think a retaliation for a tariff should be an export tax. Let's say Canada puts a 50% export tax on maple syrup unless the car tariff is withheld
People who elected this clown are more dangerous
Amazing that in 2026 Canada, Iran, and US Circuit Courts have the same stance: the US federal government cannot be trusted to tell the truth about anything. Fish really rots from the head.
The craziest thing is, that in spite of the obvious, balatant corruption and supreme incompetence of the US govt, Trump still has around 35% approval rating.
That means the hardcore MAGA base is a third of the US population. I genuinely don't know how to reconcile that with the long term future of the United States.
People here in Canada have not been sitting still. It is a truely fantastic oportunity, it's almost like 10% of the US market was suddenly transported to another country for free, and all we have to do is fill it.
Just at the right time when China is looking to expand its exports. People said that Trump was Putin's stooge, but he might have been Xi's.
I'm concerned that governments worldwide are finding tarrifs to be a popular (and exciting!) way to exorbitantly increase the size of governments and goverment coffers which are then used for populist aims. We need to re-educate people that tarrifs are bad.
"However, last-minute changes in the U.S. proposed terms were unfair, uneconomic, and called into question the reliability of any deal."
It seems like if the other side agrees to a deal too easily then Trump doesn't think the deal is good enough. He only likes deals where the other side is getting screwed and has to be coerced into signing.
I have not been following the Canada thing but generally have been learning more about trade and Trump's approach seems less chaotic and random than is talked about.
US's largest trading partner is Mexico. The biggest thing we import from them is automobiles & auto-parts and the second largest is computers and electronics.
We all understand the benefits of trade is meant to bring in - such as goods manufactured by countries whose prowess making those goods better to the benefit of all.
So it's interesting to look at this example. Automobiles - does Mexico have a prowess in that segment? A tell tale sign of "no" is that Mexico has no domestic auto brand. In other words 100% of auto exports from Mexico is actually US automaker production that shifted to Mexico is persuit of cheaper labor, weaker unions, and less environmental and other regulations that gets in the way of manufacturing.
I am focusing on this example because it's the largest segment of our trade with our largest partner - literally the biggest thing the US imports is our own shifted auto production.
The second largest segment is also interesting. Mexico isn't known for its computer and electronics brands either. What's going on? Turns out that Asian manufacturers (eg Lenovo) do the very final assembly in Mexico but all the components come from Asia. It's not actually "efficient" to do this except that when assembly happens in Mexico those components magically become a "north American good" by NAFTA terms and can go all over US and Canada with no duties or tarrifs or restrictions.
So the second largest segment with our largest trading partner is Asian manufacturers exploiting a NAFTA loophole.
As an American who inherently is pro trade (I am an MBA...) this is revealing about the obvious disadvantages of how trade has been configured. The auto example is literally NAFTA being used to bypass American labor laws and environmental regulations while maintaining access to our market by American companies themselves. The electronics example is Asian companies bypassing the long standing trade conditions by whitewashing Asian products as north American goods.
It is obvious that trade pre-Trump was not set up in a smart way from American perspective. The auto is a great example: the government simultaneously made it very hard and expensive to manufacture at home, and very easy to shift to Mexico.
I don't know the details with Canada as much but I no longer assume things were working great and US is meddling lens by default.
These tariffs will be struck down as unconstitutional just like the ones Trump attempted under the IEEPA were. Any company who paid in the meanwhile will be compensated while consumers will get the short end, so it will be a nice payday for northern importers.
It's Congress who has the power to tax. If Trump wants tariffs he needs to propose a bill that creates them or gives him clear powers. The legal scholars in his cabinet know this, so why has he not proposed a bill?
Everything you need to know about Canada is on a population density map.
Carney had to take a stand, the last few moves he pulled angered a lot of people. For example he started talking about asking the provinces to put US booze back on the shelves which for us who boycotted prior to the govt saying it was a good idea, is giving up our leverage before any demands were acquiesced. He's playing the same song with the digital media tax and even with the case that made Meta forego all Canadian news outlets.
Basically he was elected to stand up to Trump and as an economist, come up with a strategy. He initially appeared to do that, but given that it largely hasn't swayed Trump, he is now backing off most of it. You could argue it's a strategy worth trying since to buck-for-buck hasn't worked, but you could also make the point that the electorate, without being told what the plan is (duh), feels he is weakening our position.
A lot of the strategy has been to wait it out and expect uproar from the US people which... largely hasn't come.. yet?
In 2025 there was a $46 billion trade deficit with Canada.
The U.S. was already buying considerably more Canadian goods than Canada bought from it.
Trump tries to betray Canadians here. When you make negotiations and then at the last second try to worsen the terms, you are not acting in good faith. This is a consistent theme with Trump: he wants to take advantage of you. This is a de-facto mafia system. The "art of the deal" is the mafia way. You can see this with Iran too - Trump negotiates, then attacks. Then fake-negotiates, attacks again (and loses anyway). The guy is a problem for the whole world.
trumps the best thing that could have happened to the rest of the world
"Our existing free trade deals already provide Canada with preferential access to 1.5 billion consumers, and we are on track to double that market access by the end of this year."
the amount of mental gymnastics needed to believe this is off the charts.
Seems like the only thing more expensive and damaging these days than being an enemy of the US is being an ally!
Wonder how long it’ll be before Trump throws his toys out the pram again. Wouldn’t be surprised if he moans his allies have abandoned him.
Canada should grow their population to 100-150 millions. this way it will have decent internal market and be more attractive to make trade deal with the rest of the world. Instead it relies on the US which appears to be very bad idea.
Good luck Canada. The economy is already pretty bad and they can't win a tariff war against their largest trading partner.
Sounds like the right move. I can only hope that the rest of us lap dogs see the (common) sense.
The USA is increasingly the source of economic and military destabliisation in the world and it's getting real hard to justify being the best little doggy for them. I'm not suggesting any action more drastic than calling a shit deal shit, and frankly it's pathetic and embarrassing that this is such a rare occurence.
And yeah, maybe some miracle corrective action will begin with a new president but the thing is, that will necessarily include restoring our "special relationship". You're better off refusing a bad deal outright, rather than trying to reneg later.
now imagine the next level of his destructive crime-spree August 2027
because this is nothing compared to when he starts to feel his loss of power
btw there are reports he's going to use ICE to do actions NEXT to voting centers to get around "no armed agents in voting centers" to force the voting to shutdown
electrocution gloves and all
we're in the US authoritarian era, Supreme Court and Congress let it happen and now there's no undo button
Question for Americans: do you guys understand what's happening?
The thing to keep in mind is that the current trade agreement was negotiated and signed by Trump himself. He has spent the last 18 months seeing what a terrible deal it is. He does not want a "deal" into conventional sense, that is an agreement that works for both parties. He needs the counterparty to be humiliated and subjugated. CUSMA (the current agreement he promoted and signed) is bad because it works for all parties, it does not subjugate and humiliate the counterparties.
What happened in these particular trade negotiations? Is that the actual negotiators had something worked out earlier in the week, then at the last minute the US made some new demand that was meant to humiliate Canada, and this tanked the negotiations. What exactly did they ask for? It's irrelevant, the point was humiliation.
Actual trade policy, whether you want access to Canadian dairy market, or lumber tarrif rates or whatever, none of that matters.
Is this a common understanding down south?
If the democrats don't manage to control both houses on the midterms and IMMEDIATELLY start the impeachment procedure against trump, I will start selling my portfolio and buying gold as fast as I can.
If Trump and his cabal is left unchecked we will be running fast towards something that will make 1929 like child's play.
And no, I am not a liberal. Far from it.
I think Trump is severely misreading his position in the world. It's not April 2025 anymore. There will be consequences for everyone, but I am not sure his own party will support him through this in an election year. Especially now as the last time he publicly stated he backed down because if rising bond yields, which is actually happening already before any trade war. Is he really going to start another one, already in deep trouble because of the mess he made in Iran.
I think he will cave pretty quickly and Canada knows it.
The world should've collectively recognised what Liberation Day was and responded together, in lock step, and in kind.
Instead, the Europeans caved, Japanese caved (PM resigned after doing so), Republic of Korea caved (PM resigned after doing so), India of course caved and so on, shattering any prospect of collective action which might pull the rogue hegemon back into line.
Now, the US is simply able to renege or renegotiate the bilateral deals whenever he feels like it, forcing the other party to face down the US by themselves - not many can do this, maybe only China. Anyways, I wish the Canadians well and I hope they gain global support