The US and Canada exchange barbs: Carney says an agreement is negotiable but cannot sacrifice automotive steel and aluminum; Trump warns of Canadian economic collapse.

Nearly two weeks after the breakdown of trade negotiations between the United States and Canada, Canadian Prime Minister Mark Carney signaled a resumption of talks, while emphasizing that any future agreement must be "stable and credible," and that the competitiveness of Canada's automotive, steel, and aluminum industries should not be sacrificed in the negotiations.

According to reports, Carney stated on Thursday, September 3rd, local time, that Canada is ready to reach a trade agreement with the United States that benefits both countries. "We are ready to sit down and reach an agreement as long as the United States is ready," he said. He also pointed out that the U.S. had previously failed to provide sufficient guarantees regarding the stability of tariffs on steel, aluminum, and automobiles, which was one of the key reasons why previous negotiations had failed to reach an agreement.

Following Carney's remarks, US President Trump quickly responded on social media, warning Carney that treating him as an "enemy" could ultimately lead to the "collapse of the Canadian economy," and stating that this would have serious political consequences for Canadian politicians.

Carney: Future agreements need to ensure tariff stability

Carney stated that the US and Canadian economies are highly integrated, especially the automotive industry, which has formed an integrated North American supply chain. Therefore, any future agreement must fully consider the competitiveness of the Canadian automotive, steel, and aluminum industries, while acknowledging Canada's local investment in the relevant supply chains.

He also revealed that the US has recently softened its stance on some issues. Previously, the US insisted that Canada make adjustments in areas such as language, culture, and streaming services, but these demands were no longer being upheld by the US in the final stages of negotiations.

Carney said the change meant there was still room for dialogue to resume, but he did not predict when negotiations could officially restart.

Refuting the US's "domestic politics" claim: US officials are not Canadian political experts.

Carney refuted claims made by U.S. Commerce Secretary Lutnick and Finance Secretary Bessant that Canada withdrew from negotiations due to domestic political factors.

He stated that Canada has a deeper understanding of its own political environment, adding, "Frankly speaking," that the appointed, unelected cabinet officials in the U.S. government are not experts on Canadian political issues.

Carney also emphasized that Canada will not remain "by the phone refreshing social media" waiting for the United States to resume negotiations, but will continue to strengthen its domestic industries and promote the diversification of its trading partners to reduce its dependence on the U.S. market.

The tariffs have been implemented, and retaliatory measures will take effect on September 8th. Negotiations remain open.

Following the breakdown of trade negotiations between the US and Canada on August 21, the US began imposing a 50% tariff on approximately $20 billion worth of Canadian goods on August 22. Canada had previously announced that it would implement equivalent retaliatory tariffs on approximately $20 billion worth of US goods starting September 8.

This means that even though Carney signaled a resumption of negotiations, the previously announced tariff measures have not been cancelled. Meanwhile, auto tariffs remain one of the most contentious issues between the two sides. Negotiations had previously come close to reaching an agreement, with the US considering reducing the top tariff on Canadian cars from 25% to 15% and steel and aluminum tariffs to 25%, but the two sides ultimately failed to finalize an agreement.

Trump's side had previously threatened to raise tariffs on Canadian cars, trucks, and auto parts to 50% starting January 1st if no agreement could be reached.

Therefore, the period before Canada's retaliatory tariffs officially take effect on September 8 may still serve as a window for both sides to reassess their negotiating terms. However, Carney's remarks do not signify a resumption of formal negotiations; core disagreements such as tariffs on automobiles, steel and aluminum, and the stability of trade policies remain unresolved.

Trump quickly responded: A collapse of the Canadian economy would be a political disaster.

Trump did not show any significant softening of his stance regarding Carney's signals for negotiation.

Trump stated on social media that if Canadian politicians view the US president as an "enemy," they will find that when the Canadian economy "collapses," it will be a "very bad" political situation, with "consequences far worse than any predicament any Canadian politician has ever faced," adding, "We'll see."

This means that while Carney emphasized that both sides could still seek a solution through negotiations, Trump maintained a high-pressure stance. The US and Canada are currently engaged in a clear exchange of words: Canada emphasizes its willingness to return to the negotiating table, but demands a stable and credible tariff arrangement; the US continues to use the pressure on the Canadian economy as a means of exerting pressure.

At the same time, Canada is accelerating its efforts to reduce its reliance on the U.S. market. On September 3, Carney announced that Canada will invest C$4.7 billion to build and maintain VIA Rail passenger cars in Thunder Bay, Ontario, and other locations, with some railcars previously manufactured in the U.S. being converted to Canadian production.

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