Hours after the trade negotiations collapsed and the United States imposed a 50-percent tariff on roughly $20 billion worth of Canadian goods on August 22, Canada’s prime minister, Mark Carney, stood before reporters and told them what lesson Canada had drawn from 18 months of dealing with Washington. In his words, Canada understood that America “would put a series of tariffs on its closest allies and use economic integration as a weapon. That its signature was written in pencil.”
Canada will match US tariffs dollar for dollar, starting on September 8.
For a man who delivered a rousing speech at Davos calling for the “middle powers” to stand up to “hegemons” and be “at the table,” not “on the menu,” the “written in pencil” line might just be the most powerful line in his tenure as prime minister to date. Tariff rates can be haggled over and retaliation can be unwound, but a signature written in pencil means that there is no real reason for anyone to negotiate, because there is no commitment. Canada did not arrive at this position quickly. It got there the hard way, by giving Washington what it asked for three times and watching a trade deal spearheaded by the very same man evaporate and be replaced by new tariffs.
Start with fentanyl, the original stated justification for tariffs on Canada. Despite the fact that less than one percent of the fentanyl seized at American borders comes from the northern border, Canadian officials took the complaint seriously. They implemented a $1.3 billion border security plan, appointed a fentanyl czar, and designated drug cartels as terrorist organizations. In response, Washington paused tariffs in February 2025 only to impose them anyway in March. The border was hardened, but the tariffs still came.
In September of 2025, Canada unilaterally dropped its retaliatory tariffs on USMCA-compliant American goods, removing these countermeasures as a gesture of good faith. Shortly thereafter, the US imposed tariffs on Canadian softwood lumber and other wood products such as upholstered furniture, kitchen cabinets, and vanities. In these most recent talks, Canada extended a second olive branch, offering to drop their remaining steel, aluminum, and automotive retaliatory tariffs if the US would reciprocate.
Last October, Ontario ran a television commercial during the baseball World Series in which Ronald Reagan, in his own voice from his famous 1987 radio address, explained why tariffs cost American jobs. The president called the ad “FAKE” and terminated trade talks over it. Ontario then pulled the ad to let negotiations resume, complying with the president’s demands, but was then met with an extra 10-percent tariff — all for pointing out that President Reagan, who at the time Trump had been comparing himself to, was against the use of tariffs.
So really, what Canadian trade officials learned over the last 18 months is that if they concede, they get a tariff. If they offer an olive branch, they get a tariff. And if they point out the hypocrisy, try to appeal to the American people, and still pull the ad when feathers get ruffled, they get tariffs. On top of all of that, they were then accused of lax enforcement against forced labor practices, making them subject to additional Section 301 tariffs. And now, they face 50 percent tariffs on a wide range of products. At this point, no one should be surprised that US trade policy has pushed away one of our closest allies.
Trade agreements are valuable not just because of the rates they set over certain products. They are valuable precisely because they are binding commitments. If a signature can be undone whenever one party imagines a new slight, then the value of any agreement plummets. Certainty is exactly what trade agreements like the USMCA are supposed to provide. But, as Canada, Mexico, and the rest of the world has learned, even a deal that President Trump himself negotiated and heralded as “the fairest, most balanced, and beneficial trade agreement we have ever signed into law. It’s the best agreement we’ve ever made,” was signed in pencil.
Canada is our closest ally and one of our largest trading partners. Supply chains between the US and Canada — especially in Michigan, a state that the president has visited several times and promised to revitalize — are so tight that a car part can cross the border seven times before it becomes a car. If any country could reasonably expect its own concessions to matter and its agreements to hold, it was Canada.
Every government now negotiating with Washington, including Tokyo, Brussels, New Delhi, and Beijing, has seen these developments. If a full trade agreement passed by Congress and signed by this president couldn’t protect Canada from tariffs, the “frameworks of a deal” that other countries around the world have are even less secure.
Tariffs that can be predicted can be survived, priced in, and in some cases, engineered around. Unpredictable tariffs and trade agreements that expire at whim cannot be. Carney’s point about America’s signature being written in pencil is a powerful one. Canada has stopped negotiating for promises and started building new trade deals to work around us. And the rest of the world is increasingly following.
