Is this going to lead to a fall election?With emotions running high over trade issues few people fully understand, it will be some time — if ever — before we can have a straightforward discussion about how negotiations with America fell apart.However, as Canadians anticipate an economic apocalypse and our leaders wrap themselves in the flag, the dominant media theme favours appeals to wounded national pride. That, everybody, understands. “Elbows up” has already won Mr. Carney one election. Could it work again?If so, the narrative would be something like this: US President Donald Trump’s approach amounts to extortion, not legitimate negotiation. First, he threatened severe tariffs on Canada, violating a free-trade deal that he himself signed, while declaring any Canadian retaliation would not be “tolerated.” In response, Canada offered modest concessions and negotiated in good faith, but the US then demanded major new benefits — including F-35 purchases — while only offering partial tariff relief, rather than restoring the original agreement.As Mr. Carney later explains, Canada refuses to compromise on sovereignty, culture, or key industries. (He was emphatic that supply management of dairy products must be protected, for example.) Thus, after the US “asked too much and offered too little,” his government took the only honourable course remaining, broke off talks, and pledged to match American tariffs.“Canada,” he said, “would not be broken or controlled by the United States.”.That, of course, is not a fight we're going to win.However, if Prime Minister Carney were persuaded Canadians liked that kind of aggressive talk, it could be an effective message to take into a snap election and perhaps gain the clear majority that has so far eluded him. His message that reciprocal toughness is necessary to restore fair cooperation between the two long-standing allies is consistent with that.This approach is not without its risks for him. Mr. Carney would have to defend himself against charges that he has spent the last 17 months insulting the US and cozying up to its competitors, especially China. The critique would range from serious tactical errors to the reckless posturing described by Vice-President Vance; few people can get away with trying to “out-tough” President Trump.Canadians should also appreciate that while this dispute is indeed consequential, it does not affect all cross-border trade. That takes some of the energy out of it.The Trump tariffs are set under Section 338 of obscure American legislation. It has never been used in a hundred years, but it allows a US president to proclaim tariffs up to 50%, if he believes a foreign country discriminates against US commerce. So President Trump alleges, and he has imposed the maximum tariffs on about $27 billion worth of Canadian trade in motor vehicles, dairy, alcohol, cement, and hockey sticks.This is out of total goods exports of $555.4 billion in 2025. (See Table 1.4.2)As the Royal Bank points out in one of its periodic economic summaries, “…the new tariffs, while significant, will still impact a small segment of total trade only. They affect about 5% of Canada’s exports to the US, which would still leave more than 80% of exports crossing the border duty-free. The average effective tariff rate on US imports from Canada would rise from around 3% to 5.5%, still below (but closer to) other major US trade partners like Europe and the UK (6%-7%).”.Significantly, the Royal Bank adds, “The size of the tariffs is likely not large enough to derail Canada’s economic growth backdrop. The Canadian value-added content of newly tariffed US imports adds up to ~0.4% of Canadian GDP and jobs.”In other words, doomsday headlines notwithstanding, life goes on for most Canadian exporters.Nevertheless, national pride has been offended. The entire country is in an uproar, scandalized, insulted, with even premiers addressing the issue at the level of street performance, pouring their US grog down the drain.If Mr. Carney sees some electoral advantage in the situation he has allowed to come about, he has yet to say so. But as is so frequently the case, the blood is up, and cooler heads may not prevail.It is not a question of needing a mandate to fight, fight, fight. That, he already has.But it must be tempting.
