"Terminate all negotiations with Canada"! Watching TV and seeing "Canadian anti-tariff ads," Trump got angry.

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US President Trump suddenly announced the termination of all trade negotiations with Canada, prompted by the Ontario government playing an advertisement quoting late President Reagan’s criticism of tariffs. This unexpected decision highlights the unpredictability of Trump’s second-term trade policy and adds further uncertainty to already tense US-Canada economic and trade relations.

On October 24, according to media reports, Trump late Thursday evening local time accused Canada of "fraudulent" use of a Reagan advertisement, calling it "fake" on his social media platform "Truth Social," and stated that the move was intended to interfere with decisions of the US Supreme Court and other courts. The Reagan Presidential Foundation previously stated that the Ontario government, without authorization, edited a presidential radio address delivered by Reagan in April 1987 and distorted its original meaning.

The termination of the negotiations comes at a critical moment for the two countries' trade relations. Earlier this year, Trump imposed tariffs on Canadian steel, aluminum, and automobiles, prompting Ottawa to take reciprocal measures. The two sides have been negotiating a potential agreement on the steel and aluminum industries for weeks, and next year, the US, Canada, and Mexico will review the continental free trade agreement signed in 2020.

Media reports stated that Canadian Prime Minister Mark Carney said earlier on Thursday that if trade negotiations with Washington fail, Canada will not allow unfair US access to its market. He also said that, due to the threat posed by Trump’s tariffs, Canada plans to double exports to countries outside the US.

Ad Dispute Triggers Diplomatic Storm

Ontario Premier Doug Ford stated earlier this month that the province would spend $75 million on ads in the US featuring Reagan’s criticism of tariffs. Ford said on Tuesday: "I heard the President saw our ad. I’m sure he wasn’t very happy."

The Reagan Presidential Foundation and Institute said the Ontario government’s ad distorted Reagan's April 1987 presidential radio address and edited his remarks without permission.

The ad features Republican Reagan criticizing the imposition of tariffs on foreign goods, saying tariffs lead to unemployment and trade wars. Trump said:

"The Reagan Foundation just announced that Canada fraudulently used a fake ad in which Reagan made negative comments about tariffs. They did this solely to interfere with the decisions of the US Supreme Court and other courts."

Meanwhile, Trump emphasized in his post: "Tariffs are critical for US national security and the economy. Based on their egregious behavior, all trade negotiations with Canada are hereby terminated."

Economists Warn of Trade War Risks

According to Axios, some economists consider this the key risk of the Trump 2.0 era: endless trade wars, fragile negotiations that Trump could break off at any time, and resulting economic uncertainty.

Canadian Prime Minister Carney visited the White House earlier this month, and the trip had been seen as a signal of thawing relations between North American allies. However, Trump’s latest statement indicates that, after a brief period of calm, tensions with major trading partners are once again heating up.

Just one day before Trump’s statement, Carney had announced a strategy to double Canada’s exports to countries outside the US over the next decade, in response to Trump’s tariff policy. On Wednesday, Carney said:

“Many of our past advantages—based on close ties with the US—have become our weaknesses.”

Currently, Trump is imposing a 35% tariff on Canadian imports, but allows exemptions for products that meet USMCA (US-Mexico-Canada Agreement) requirements. USMCA is the free trade agreement Trump negotiated with Mexico and Canada in his first term. In addition, Trump has imposed specific sector tariffs on Canadian goods, including a 50% tariff on metals and a 25% tariff on automobiles.

Canada was one of the countries hit by higher US tariffs on exports in August, after the Canadian and Trump administrations failed to reach a trade agreement. The suspension of negotiations due to the ad controversy means the largest trade partnership between the US and Canada now faces greater uncertainty, casting a shadow over the prospects for North American economic integration.

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