OTTAWA — U.S. Trade Representative Jamieson Greer says the White House offered Canada “the best deal in the world” before talks collapsed. Prime Minister Mark Carney says the U.S. wanted influence over Canada’s trade with other countries, without eliminating the threat of more tariffs.

An analysis of 19 deals President Donald Trump reached with other countries since he began upending global trade last year suggests they are probably both right, and provides sobering insight into Canada’s chances at getting the U.S. to back off its toughest demands.

“Canadians feel that we have a special relationship with the U.S., that we should somehow be exempt from this,” said Carlo Dade, director of the New North America Initiative at the University of Calgary’s School of Public Policy. The paper he co-authored with colleague Alex Giordano shows nearly every other country that negotiated trade pacts with the U.S. accepted lopsided deals that gave the U.S. some say over their economic policies, including on China, without fully lifting tariffs. “A lot of them ate crow,” Dade said of other leaders.

It may be impossible, politically, for Carney to do the same, but the conclusions in the paper carry some hard lessons for Canada, not least the cold truth that a pre-existing trade agreement affords little protection from U.S. demands that would erode the value of that original deal.

Canada ‘agreed already’ to American influence

One of the sticking points in the final hours of negotiations with the White House involved a U.S. demand that Canada match American tariffs on aluminum and steel—including from countries with which it has, or wants to have, trade agreements. “Canada is a sovereign state,” Carney said Sept. 1. “We will strike free trade deals with the countries we wish to strike free trade deals with.”

In an interview with CBC News, Greer said the U.S. was trying to ensure that lowering tariffs on Canadian steel and aluminum would not open a “back door” into the U.S.

The deals that Trump announced during his second mandate take various forms. Some are full reciprocal trade agreements. Others are frameworks. Not all have been fully implemented. Still, nearly all of them include language aimed at limiting the role of “non-market economies” in the supply chains of U.S. allies, which is understood to target overcapacity and dumping by China. “This has become the consistent baseline expectation across all deals,” said the paper, which was published days after Canada called off negotiations. The U.S. could rip up those agreements—and restore the tariffs—if the country enters an arrangement with a non-market economy. 

Canada already agreed to such a poison-pill clause in the Canada-United States-Mexico Agreement (CUSMA). If any of the parties want to enter a free trade agreement with a non-market economy, the others get to review it before it is signed. If it makes them want to withdraw from CUSMA, they can.

“We opened the door in CUSMA to allow the Americans to have influence on our trade policy,” Dade said. “We wouldn’t define it as influence, but we agreed already.”

‘We know how bad it can be’

The degree of influence ceded to the U.S. varies. The United Kingdom and the U.S. said they intend to “strengthen co-operation on economic security, including by co-ordinating to address non-market policies of third countries.” Other deals were more specific, listing export controls, investment security and duty evasion among the ways to co-operate. The European Union agreed to address “non-market practices, unfair competition and lack of reciprocity in public procurement with respect to third countries.” Argentina agreed to prioritize the U.S. as a trade and investment partner for its copper, lithium and other critical minerals over “market manipulating economies or enterprises.” 

Taiwan, a critical source of computer chips for the U.S., agreed to bring in regulations to stop the diversion of semiconductors, advanced computing products and other critical technologies to China. The deal also forbids Taiwan, which agreed to align with unilateral U.S. export controls, from working with China on artificial intelligence, biotechnology or quantum computing research.

The agreement with Malaysia goes especially far. If the U.S. introduces trade measures like duties or quotas against other countries to protect its economic or national security, the southeast Asian country must adopt something “with equivalent restrictive effect.” Malaysia also promised to crack down on foreign-owned companies within its borders that flood the U.S. with cheap goods, or somehow reduce the volume of U.S. exports to other markets.

It is hard to say where Canada would land on this spectrum without seeing a draft of the deal it walked away from, Dade noted. To date, neither government has released one. Still, he said, “We know how bad it can be.”

‘Negotiating for time, not for peace’

Canada already has a free trade deal with the U.S., but so did South Korea, El Salvador, Guatemala and Jordan. Trump hit them all with tariffs anyway. South Korea accepted a 15 per cent levy on many goods that used to enter the U.S. duty-free, and pledged to invest US$350 billion in the United States, including by buying 103 Boeing aircraft through Korean Air.

The CUSMA carve-out has largely shielded the Canadian economy from many U.S. tariffs, as Carney points out when he says Canada should not accept an “unfair” deal. With Trump refusing to renew CUSMA as is, though, there is a risk that Mexico will reach its own deal first, Dade said. That would make it harder for Canada to stand its ground, while weakening CUSMA. Beyond duty-free access, the agreement has streamlined customs procedures, intellectual property protections and other benefits that Dade said Canada should be fighting to keep. 

Despite the downsides, Dade said he understands why other countries agreed to such asymmetrical deals with Trump, as they offer their businesses a chance to catch their breath and adapt while the White House focuses on other targets. While Trump has not spared every country he signed a deal with from additional tariffs, Dade said he has largely left them alone. “You’re negotiating for time, not for peace,” he said. “That’s all that’s on the table. The Americans aren’t offering anyone peace; they’re offering everyone time.”