Trump Says Canada Is ‘Working Very Hard’ for a Deal—and Claims Washington Holds ‘All the Cards’

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President Donald Trump has put a blunt description on the latest phase of the Canada–U.S. trade fight: Ottawa wants a deal, and Washington believes it can dictate the terms. Speaking to reporters at the White House on October 23, Trump said Canada was “working very hard” to reach an agreement and claimed the United States held “all the cards.” The remark landed after two months of stalled negotiations, new tariffs and retaliatory measures that have strained one of the world’s deepest economic relationships. Yet the picture is more complicated than the president’s language suggests. Canada remains heavily dependent on access to the American market, giving Washington enormous leverage. At the same time, U.S. industries, consumers and border states remain deeply connected to Canadian energy, manufacturing and supply chains, making prolonged confrontation costly on both sides.

The Remark That Reframed the Negotiations

Trump made the comment while discussing negotiations with both Mexico and Canada. He told reporters that Washington was close to an agreement with Mexico before turning north, saying Canada was also working hard for a deal. He then repeated that the United States had “all the cards.” Canada-U.S. Trade Minister Dominic LeBlanc’s office did not publicly challenge the president’s characterization at the time, with a spokesperson declining to comment.

The language is striking because official negotiations have not followed a simple pattern of Canada repeatedly asking Washington to accept a deal. Canada itself suspended the previous round of negotiations on August 21. Prime Minister Mark Carney said U.S. negotiators had introduced unacceptable last-minute conditions and argued that Ottawa would not sign an agreement simply to meet an American deadline. Trump’s latest remarks therefore reveal as much about Washington’s negotiating strategy as they do about the actual state of discussions.

Washington’s Leverage Is Real

There is a strong economic foundation behind Trump’s claim of negotiating power. Statistics Canada reported that 71.7% of Canadian merchandise exports went to the United States in 2025. Although that share fell from 75.9% a year earlier, no other foreign market comes remotely close. For thousands of Canadian manufacturers, farms and resource companies, replacing American customers quickly would be extraordinarily difficult.

The imbalance means disruptions to U.S. market access can hit Canada disproportionately. Canadian exports to the United States were worth hundreds of billions of dollars in 2025, and entire industrial regions have been built around frictionless cross-border trade. Washington also controls access to an economy roughly ten times Canada’s size. A Canadian factory losing an American customer cannot necessarily replace that demand in Europe or Asia overnight. That reality gives the White House considerable negotiating weight, particularly when tariffs are concentrated on industries with few alternative markets.

But Canada Still Holds Important Cards of Its Own

Economic dependence does not run in only one direction. U.S. Trade Representative data show total American goods and services trade with Canada reached approximately US$872.3 billion in 2025. Canada remained one of the United States’ largest trading partners and one of the biggest destinations for American exports. The United States also ran a US$27.7-billion services trade surplus with Canada that year.

Energy makes the relationship even harder to separate. The Canada Energy Regulator says Canada supplied 63.4% of all U.S. crude-oil imports in 2025, close to 100% of imported natural gas and more than 81% of imported electricity. Pipelines, power lines and refineries were built around those flows over decades. That does not erase Washington’s advantage in market size, but it explains why “all the cards” is better understood as negotiating rhetoric than a literal description of the economic relationship.

How the August Deal Fell Apart

The current standoff dates directly to August 21, when Carney ordered Canadian negotiators home. Ottawa said discussions had produced meaningful progress but that Washington changed key terms near the deadline. Carney described the new conditions as unfair and uneconomic, saying they raised questions about whether a final agreement could provide the stability Canadian companies needed.

The breakdown had immediate consequences. A new 50% U.S. tariff package covering roughly C$27.6 billion in Canadian goods came into force, including products outside many of the sectors that had dominated earlier tariff disputes. Ottawa responded with its own tariffs on C$27.6 billion of American imports, with rates of 15%, 25% and 50% across products including steel, appliances, agricultural equipment, electronics and other goods. What had been a negotiation over reducing trade barriers quickly became another round of reciprocal economic pressure.

The Economic Cost Is Becoming Easier to Measure

Tariffs are already changing the way goods move across the border. Statistics Canada reported that Canadian exports to the United States jumped 8.1% in August as businesses rushed shipments ahead of the new duties. Canada’s merchandise trade surplus with the United States consequently widened from C$6.1 billion in July to C$11.2 billion in August. Statistics Canada cautioned that companies may have accelerated shipments specifically to avoid tariffs.

The longer-term numbers are more concerning. In an October assessment, Canada’s Parliamentary Budget Officer estimated that trade measures introduced since June increased the trade-weighted effective U.S. tariff rate on Canadian imports from 5.3% to 7.7%. Canadian tariffs on U.S. goods raised Canada’s corresponding rate from 1.6% to 3%. The PBO estimated that the combined trade measures introduced since early 2025 could leave Canadian real GDP 1.4% lower after five years than under a pre-tariff baseline.

Carney’s Position Remains ‘Not a Deal at Any Price’

Ottawa has shown it is willing to compromise in several areas, but Carney has repeatedly drawn a distinction between compromise and accepting Washington’s terms wholesale. During the August negotiations, he said Canada was prepared to remove remaining retaliatory tariffs on strategic sectors such as steel, aluminum and automobiles if the United States substantially reduced its corresponding duties.

Canada also offered other concessions, including encouraging provinces to return American alcohol to store shelves and considering administrative measures related to supply management. But Carney said Ottawa would not change the fundamentals of the supply-management system, weaken protections for French language and culture or accept terms it viewed as limiting Canadian sovereignty. His summary of the failed negotiations was unusually direct: Washington, he said, had “asked too much and offered too little.” That stance remains an important counterpoint to Trump’s assertion that Canada is desperate for an agreement.

Diversification Is Becoming Economic Policy

Canada’s response is increasingly focused on reducing the vulnerability that gives Washington so much leverage. The federal government has set a target of doubling non-U.S. exports over the next decade, which it says could generate roughly C$300 billion in additional trade. That strategy includes deeper commercial relationships with Europe and the Indo-Pacific as well as negotiations and partnerships with economies such as India, Turkey and members of ASEAN.

Some diversification was already visible before the latest breakdown. Statistics Canada reported that Canadian exports to countries other than the United States increased 17.2% in 2025. Global Affairs Canada says the non-U.S. share of Canadian exports has risen to its highest level in more than four decades. New energy infrastructure is part of that shift as well. Expanded west-coast export capacity has allowed more Canadian crude to reach Asian markets. None of these changes can rapidly replace the United States, but they can gradually change Canada’s bargaining position.

Autos and Steel Show Why the Stakes Reach Beyond Ottawa

Few places demonstrate the human cost of the trade confrontation more clearly than Ontario’s manufacturing belt. On October 21, Ottawa and Queen’s Park announced an C$8.7-billion action plan covering steel, autos and critical-mineral infrastructure. More than C$5.2 billion is earmarked for the steel sector, while another C$2.5 billion will help automakers modernize plants and production lines.

Canada’s auto sector supports more than 120,000 direct jobs and contributes over C$16 billion annually to GDP. Its supply chains are unusually integrated: vehicle components can cross the Canada–U.S. border repeatedly before a finished car reaches a dealership. More than 90% of Canadian-made vehicles are normally exported to the United States. That explains why even targeted tariffs can ripple through Windsor, Oshawa, Alliston, Hamilton and American manufacturing communities across the Great Lakes. The dispute is ultimately being felt on factory floors, not just at negotiating tables.

CUSMA Is Still Alive—but Its Future Is Less Certain

The broader trade agreement binding Canada, the United States and Mexico also hangs over negotiations. During the formal July 1 joint review, Washington declined to extend the U.S.-Mexico-Canada Agreement for another 16-year term in its current form. Canada and Mexico supported renewal, but unanimous agreement was required. The decision did not terminate CUSMA, which remains fully in force.

Instead, the countries now enter annual reviews while negotiations continue. Without eventual agreement to extend it, the pact is scheduled to expire in 2036. That creates a long runway, but also persistent uncertainty for companies deciding where to place factories and investment. Washington has pushed for changes involving trade deficits, manufacturing and North American content requirements, while Canada has emphasized reducing U.S. sectoral tariffs. A bilateral Canada-U.S. agreement could therefore become intertwined with the much larger question of what CUSMA eventually becomes.

The Signals From Washington Are Not Entirely One-Sided

Even as Trump declared that Washington held the advantage, his administration was adjusting some of the tariffs imposed on Canada. On October 23, the White House announced that 50% tariffs would be removed from selected Canadian products, including certain plywood, paper products, machinery, refrigeration equipment and packaging materials. The changes are scheduled to take effect October 30.

The relief is limited. Washington simultaneously added other Canadian goods to the tariff list, meaning the announcement does not amount to a broad rollback or a new trade agreement. Still, it demonstrates that American economic and political pressure matters too. Businesses in border states have complained about higher input costs, while lawmakers have sought exemptions for industries dependent on Canadian suppliers. The episode illustrates why the bilateral relationship is difficult to reduce to a winner and loser: tariffs designed to pressure Canada can also create costs inside the United States.

Ottawa and Washington Are Still Publicly Disagreeing About Who Needs a Deal

Perhaps the most revealing development is that Trump and Carney are presenting almost opposite descriptions of urgency. Trump says Canada is working intensely for an agreement because Washington holds the stronger hand. Carney, speaking during his trip to Turkey on October 23, said Canada is prepared to resume serious negotiations but is not in a rush and could wait months—or even for another U.S. administration—if necessary.

Both messages contain elements of strategy. Canada would clearly benefit from predictable access to its biggest export market and lower tariffs on industries such as autos, steel and aluminum. Washington, however, also has reasons to stabilize the relationship, including tightly integrated supply chains, energy dependence and mounting pressure from American businesses affected by tariffs. The next breakthrough may therefore come not because one side finally admits the other holds “all the cards,” but because both governments decide that prolonged uncertainty is becoming more expensive than compromise.

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