Canada Says It Will Wait for a Good Deal. Washington Keeps Raising the Cost of Waiting.

The Receipt

Canada says it will wait for a good deal with the United States. Most Canadians agree. In a May 2026 poll, respondents said by a wide margin they preferred taking the time needed to get a deal that actually serves Canada over moving quickly just to reduce uncertainty [1]. Prime Minister Mark Carney has said publicly that talks will take as long as necessary and that the Americans will not dictate the terms [2].

Nobody is arguing with the goal. The question is what waiting costs.

Since June 2025, Canada has made a string of documented concessions tied to trade negotiations. It killed its digital services tax hours before the first payments were due [3]. It dropped most of its retaliatory tariffs on U.S. goods [22]. It rolled back the streaming levy that would have required foreign platforms to pay up to 15 percent of their Canadian revenues into Canadian content funds [4]. It agreed to share toll revenue from a bridge Canada financed at a cost of $6.4 billion [23]. Each was framed as a step toward a deal.

None was followed by durable tariff relief. Referring to the DST and streaming changes, U.S. Trade Representative Jamieson Greer said publicly that Canada doesn't get credit for reversing policies Washington already considered harmful [5]. Four days later, President Trump used a 1930 tariff law — used for the first time to impose tariffs — to put 50 percent duties on roughly US$20 billion in Canadian goods, effective August 19 [6]. Then came a separate threat of penalties for wildfire smoke crossing the border [7]. One side's strategy requires time. The other side's actions have increased the published tariff exposure on a rolling schedule. The four concessions have not been followed by a publicly announced bilateral CUSMA negotiating round.

---

Waiting out a U.S. president has political logic. Carney secured a parliamentary majority in April 2026 and, barring an early election, does not face a scheduled federal vote until 2029. Trump faces midterm elections in November. Time should be on Canada's side.

Other countries chose differently. The United Kingdom made a deal in May 2025: a 10 percent baseline tariff stayed on most British goods, cars got a quota at a reduced rate, and steel and aluminum went tariff-free in exchange for concessions on beef and ethanol [20]. Japan agreed to a deal in July 2025: a 15 percent tariff on most imports, down from the 25 percent Trump had proposed but higher than pre-2025 rates, plus $550 billion in investment commitments [21]. Neither deal removed tariffs entirely. Both countries are paying rates that did not exist eighteen months ago. These are not like-for-like comparators: neither country entered negotiations as a CUSMA member or with Canada's degree of cross-border production integration. But they show what an early settlement requires. The alternative to patience is managed access at an ongoing cost.

Canada's bet is that waiting produces something better. But that only works if the cost of waiting stays flat. Fourteen months of public record say it doesn't.

What Canada Gave Up

On June 27, 2025, Trump announced he was terminating all trade discussions with Canada over its digital services tax, calling it "a direct and blatant attack on our country" [8]. Two days later, Canada rescinded the tax [3]. The DST was a 3 percent levy on digital revenues earned in Canada by large technology companies, retroactive to 2022. The first payments were due the next morning.

Ottawa's official statement said Canada was rescinding the DST "in anticipation of a mutually beneficial comprehensive trade arrangement with the United States" [3]. Carney and Trump agreed to resume talks with a target of reaching a deal by July 21 [9].

Eleven months later, a second concession came. The CRTC had ruled that foreign streaming services must contribute between 5 and 15 percent of their Canadian revenues to Canadian content funds. On June 3, 2026, Heritage Minister Marc Miller directed the CRTC to revisit that ruling and announced $600 million per year in federal funding to replace the private contributions [4]. The U.S. Trade Representative had identified the Online Streaming Act as a services trade barrier [10].

Two other concessions round out the documented set. On August 22, 2025, Canada removed counter-tariffs from most CUSMA-compliant U.S. goods, aligning its treatment with existing U.S. exemptions while retaining counter-tariffs on steel, aluminum, and automobiles [22]. Carney also said Trump had assured him the move would help restart negotiations. The White House called it "long overdue." Then in July 2026, Canada agreed to share 50 percent of net toll revenue from the Gordie Howe International Bridge with the United States for 15 years [23]. Canada financed the project's approximately $6.4 billion construction cost. Under the earlier financing structure, Canada was to collect bridge tolls to recover its investment. The U.S. administration delayed the bridge's opening to renegotiate the revenue-sharing terms, with Commerce Secretary Howard Lutnick involved in pushing for the new arrangement [23].

What Followed

After the DST rescission, the agreed timeline was July 21, 2025. On July 11 — ten days before the deadline — Trump posted a letter on Truth Social announcing a 35 percent tariff on Canadian goods starting August 1 [11]. The Canada letter was part of a broader series of tariff notices sent to more than 20 U.S. trading partners, although its rate and stated grievances were Canada-specific. The July 21 deadline passed without a deal.

In October, Trump cancelled trade talks after Ontario aired an anti-tariff advertisement [12]. By the end of 2025, U.S. Ambassador Peter Hoekstra said publicly that there had been no serious negotiations since October [13].

The streaming rollback followed the same path. Five weeks after Ottawa directed the CRTC to reverse course, Greer spoke at the Aspen Security Forum. Referring to the DST and streaming changes, he said Canada doesn't "really get credit for doing something bad and then undoing it. That's just good practice on their part" [5].

Two days later, Trump posted on Truth Social that the cost of Canadian wildfire smoke "must of necessity be added to the TARIFFS Canada is currently paying" [14]. On July 20, he signed three proclamations under Section 338 of the Tariff Act of 1930 — used for the first time to impose tariffs — covering Canadian motor vehicles, alcoholic beverages, and dairy products [6]. The tariffs cover roughly US$20 billion in annual Canadian imports. The product annexes extended beyond the directly disputed sectors, reaching wine, furniture, clothing, cement, fishing equipment, and hockey sticks [15]. They apply even to goods that qualify for preferential treatment under CUSMA [6].

On August 3, aboard Air Force One, a reporter asked Trump whether he had decided on punishment for Canada over the wildfires. He confirmed he had but would not say what it was [7] [19].

The Pressure Keeps Spreading

Tariffs have statutory authority, published justifications, and a negotiating logic everyone understands. The wildfire smoke threat is something else. It links tariff pressure to a transboundary environmental harm that is not among the commercial grievances cited in the Section 338 fact sheet.

The White House fact sheet supporting the Section 338 tariffs cites three categories: dairy market access, provincial bans on U.S. alcoholic beverages, and motor vehicle trade [16]. The USTR has separately flagged the Online Streaming Act [10]. The wildfire smoke demand sits outside all of these. Each new front competes for the same negotiating bandwidth.

The strongest counter-argument deserves its full weight here. Some of these disputes have documented merit. Canada's dairy supply management system is protectionist by design. Provincial liquor bans were retaliatory measures with measurable effects: from March 2025 through February 2026, Canadian imports of U.S. alcoholic beverages fell by approximately 81 percent [16]. The streaming levy would have applied disproportionately to U.S. companies. These are real grievances with real costs on both sides.

That is what makes the pattern hard to answer. Legitimate policy disputes and open-ended pressure arrive on the same timeline, under the same escalation schedule, competing for the same bandwidth. Additional demands followed despite Canadian movement on several identified grievances. As Greer put it, you don't get credit.

No Bilateral CUSMA Round

Mexico has completed three announced bilateral CUSMA negotiating rounds with the United States. As of August 5, no comparable Canada-U.S. round had been publicly announced [5]. Greer said at Aspen that he is in weekly contact with Canadian counterparts and has offered proposals [5]. Weekly contact and announced bilateral negotiating rounds are different things.

The uncertainty also extends beyond the August tariffs. At the July 1 CUSMA joint review, the United States declined to approve a new 16-year extension. The agreement remains in force, but the parties now move into annual reviews, with the scheduled 2036 termination date remaining unless they later agree to extend it. For businesses making long-horizon investment decisions, that is another layer of unresolved risk.

The government's strongest case is that the relevant metric is not whether Canada has signed a deal, but how much Canadian trade remains protected. Most qualifying Canadian exports continue to receive CUSMA treatment. Canada has not accepted a UK-style 10 percent baseline or a Japan-style 15 percent general tariff. Canada also retains its own counter-tariffs on U.S. steel, aluminum, and automobiles. Preserving that position may be preferable to locking in a worse baseline. That is a measurable argument, and it deserves weight.

The proposal currently on the table shows what the next concession could look like. Under CUSMA, Canadian steel and aluminum enter the U.S. through rules-based access: meet the origin requirements, get preferential treatment. A quota replaces that with a ceiling on volume. Canada would accept a hard limit on how much it can export in exchange for a lower tariff rate on what gets through [17]. That is a different kind of trade relationship than the one the agreement was built to provide.

Patience is a strategy, not a guarantee. If Mexico finalizes bilateral terms in its third round of talks, those terms may define the framework Canada eventually negotiates within. The longer Canada is absent from the table, the more the architecture of the agreement can shift around it. Waiting only pays off if what remains available at the end is better than what was available at the start.

The tariff schedule is only part of the cost. A KPMG survey of 275 Canadian manufacturers, conducted in May 2026 before the July 20 Section 338 announcement, found that 42 percent have moved production to the United States or are considering doing so [24]. Fifty-seven percent have paused, reduced, or cancelled capital expenditure. The Canadian Chamber of Commerce, drawing on a Statistics Canada survey of more than 9,200 businesses, argued that the greatest long-term economic cost may not be the tariffs themselves but the investment that never happened because of prolonged uncertainty [25]. Canadian businesses invest 55 cents per worker for every dollar invested in the United States [25].

Business capital spending fell to a two-year low in the first quarter of 2026 [26]. Real GDP contracted in the fourth quarter of 2025 and again in the first quarter of 2026, meeting the common two-quarter definition of a technical recession, though monthly GDP subsequently rebounded in April and May [27]. Business investment fell for five consecutive months over that period [27]. Relocation decisions can outlast the tariff measures that prompted them.

Carney has said the government is focused on getting the best deal for Canadians [18]. The polling suggests the public will give him time [1]. The August 19 tariffs take effect in two weeks.

What Would Change This Assessment

The DST rescission did produce a resumption of talks and the July 21, 2025 negotiating window. That is a documented response, and this article does not claim concessions have produced nothing. The pattern it documents is narrower: no Canadian concession has been followed by a sustained reduction in the published tariff burden, and additional measures have continued. That pattern breaks if any of the following occurs.

• Within 30 days of a publicly identified Canadian policy change, the United States reduces the trade-weighted tariff rate on Canadian goods, and that reduction remains in force for at least 90 days.
• The United States and Canada publicly announce a bilateral CUSMA negotiating round with dates, named participants, and an identified agenda.
• Before August 19, the United States suspends, narrows, or lowers the Section 338 tariffs, and its public announcement cites an identified Canadian policy change or negotiated commitment.