Trump Says U.S. Has ‘All the Cards’ as Canada Tries to Reach a New Trade Deal

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Donald Trump has delivered another blunt assessment of the increasingly strained Canada-U.S. trade relationship, arguing that Washington holds the advantage as Ottawa searches for a path back to a deal. Speaking at the White House on October 23, the U.S. president said Canada was “working very hard” to secure an agreement before adding that the United States has “all the cards.”

The remark lands two months after intensive negotiations collapsed and both countries imposed new trade measures. Prime Minister Mark Carney’s government, meanwhile, is presenting a different message: Canada wants an acceptable agreement, but not one reached at any cost. Behind the competing rhetoric sits a deeply interconnected economic relationship worth hundreds of billions of dollars annually—and a dispute increasingly affecting factories, investment decisions, supply chains and the future of continental free trade.

Trump Is Again Putting U.S. Leverage Front and Centre

Trump’s October 23 comments were brief, but the choice of words was familiar. He said Canada was working hard to reach an agreement and that he hated to say it, but the United States had “all the cards.” It was not the first time he had used that language toward Canada. The president has repeatedly argued that the sheer size of the American market gives Washington exceptional negotiating power over a neighbour that sends a large share of its exports south of the border.

That framing also helps explain Washington’s broader strategy. Rather than treating tariff-free North American commerce as the default, the administration has increasingly treated access to the U.S. market as something trading partners must negotiate to preserve. Canada has resisted accepting that premise without limits. The result is an unusual situation in which two economies that have spent decades removing barriers are now negotiating amid tariffs, retaliation and uncertainty over whether their existing continental trade framework will remain intact over the long term.

The August Negotiations Came Surprisingly Close Before Collapsing

The current standoff traces directly to three days of intensive negotiations in August. Ottawa said substantial progress had been made and was prepared to remove some retaliatory measures if Washington substantially reduced tariffs affecting strategic Canadian industries. Canada was also seeking continued tariff-free access for most businesses and greater certainty for companies making long-term investment decisions on both sides of the border.

Then the negotiations broke down. Carney said U.S. negotiators introduced last-minute terms that Canada considered economically unacceptable and incompatible with Canadian sovereignty. Among the disputed issues were the treatment of medium- and heavy-duty vehicles, as well as U.S. proposals Ottawa said would restrict Canada’s ability to pursue other trade relationships. Carney ordered Canadian negotiators home on August 21. Canada subsequently announced dollar-for-dollar countermeasures covering C$27.6 billion in U.S. imports, with tariffs of 15%, 25% or 50% depending on the product. What had looked like a possible breakthrough instead became another escalation.

The Numbers Explain Why Trump Believes Washington Has the Stronger Hand

There is a straightforward economic argument behind Trump’s confidence. Statistics Canada reported that 71.7% of Canadian merchandise exports went to the United States in 2025. Although that was the lowest share since the early 1980s, it still means roughly seven of every ten dollars in Canadian goods exports depended on access to one foreign market. Canadian merchandise exports to the United States totalled hundreds of billions of dollars during the year.

The relationship matters enormously to American companies too, but Canada’s concentration is difficult to ignore. The U.S. Trade Representative estimates total U.S. goods and services trade with Canada reached approximately US$872 billion in 2025. Canada bought more than US$333 billion in American goods alone, making it an exceptionally important customer. Yet the United States has a much larger domestic economy and a broader range of export destinations. That imbalance gives Washington more room to absorb disruption, which is the strongest evidence supporting Trump’s claim of greater bargaining leverage—even if it falls short of proving the U.S. literally controls every card.

Canada Still Has Leverage in Energy and Integrated Supply Chains

The problem with the “all the cards” description is that North American production does not operate like two isolated national economies. Energy is the clearest example. U.S. Energy Information Administration data show American crude imports from Canada averaged about 3.9 million barrels per day in 2025. Canadian crude remains particularly important to sophisticated U.S. refineries designed to process the heavier grades produced in Western Canada. Replacing those barrels quickly would be neither simple nor cost-free.

The auto industry provides another example. Canada and the United States exchange vehicles and components through supply chains built over generations. In 2024, automotive trade between the countries was worth roughly C$152 billion, according to Canadian government data. Parts can cross the border repeatedly before a finished vehicle reaches a dealership. That means a tariff imposed on Canada can eventually become a higher input cost for a factory in Michigan, Ohio or another U.S. manufacturing state. Washington has greater overall economic weight, but decades of integration ensure that applying that weight can create domestic consequences as well.

The Tariff Fight Is Starting to Change Business Decisions

The trade dispute is no longer merely a collection of political threats. Businesses are changing their behaviour. The Bank of Canada’s October Business Outlook Survey found that companies questioned after the August negotiating breakdown reported weaker sentiment and lower expectations for export sales. Trade tensions were also weighing more heavily on investment plans, while firms increasingly reported higher costs and expected selling prices linked to tariffs.

Businesses are responding in several ways. Some are changing suppliers, investing in automation, searching for overseas customers or reducing capacity. The Bank found examples of aluminum producers entering European markets and steel companies looking for opportunities tied to Canadian procurement and defence spending. Ottawa and Ontario have also responded with billions of dollars in measures targeting exposed industries, particularly steel and automotive manufacturing. These adjustments show why prolonged uncertainty can become damaging even before tariffs close a factory. A company deciding where to place its next production line may simply choose the jurisdiction where future market access looks more predictable.

CUSMA Is Still Alive, but Its Future Is Much Less Certain

An important distinction is often lost in the political rhetoric: the Canada-U.S.-Mexico Agreement has not disappeared. During its mandatory July 1, 2026 joint review, Canada and Mexico supported renewing the agreement for another 16-year period. The United States declined to renew it in its current form, arguing that outstanding problems needed to be addressed first. Under the agreement’s review mechanism, however, that decision did not immediately terminate CUSMA.

The existing pact can remain in force until 2036, with annual reviews continuing unless the three countries eventually agree to extend it. That creates an unusual decade-long runway rather than an immediate cliff. For Canadian companies, however, legal survival and commercial certainty are not the same thing. A factory considering a multibillion-dollar investment wants to know what tariff rules will apply years from now. The unresolved review therefore gives Washington another source of negotiating pressure while giving all three governments time to negotiate changes rather than simply dismantling the continental system overnight.

Carney Is Trying to Reduce the Dependency Trump Is Exploiting

Ottawa’s answer to American leverage increasingly extends beyond Washington. Canadian exports to non-U.S. markets rose sharply in 2025, while exports to the United States declined. Global Affairs Canada says non-U.S. markets accounted for 32.8% of total goods and services exports, the highest share in more than four decades. That diversification was partly driven by commodities such as gold and energy, meaning it should not be mistaken for a complete restructuring of Canadian trade.

Still, the political strategy is becoming visible. On the same day as Trump’s latest comments, Carney concluded a visit to Türkiye that produced a new strategic partnership and plans for formal free-trade negotiations beginning November 30. Canada has also intensified economic outreach toward Europe and other markets. None can quickly replace the United States, especially for industries built around cross-border trucking and integrated manufacturing. The objective is instead to gradually reduce the degree to which a future U.S. administration can turn Canadian dependence on a single market into negotiating leverage.

A Deal Is Still Possible, but Ottawa Is Signalling It Can Wait

Despite Trump’s assertion that Canada is pushing hard for an agreement, Ottawa is publicly trying to avoid appearing desperate. Canadian officials have continued communicating with their American counterparts, and Trade Minister Dominic LeBlanc has said a deal will eventually be found if it serves the Canadian economy. Carney has gone further, indicating Canada could wait months—or potentially for another U.S. administration—rather than sign an agreement it considers fundamentally unacceptable.

That does not mean delay comes without costs. Canadian exporters remain exposed to tariffs, businesses face investment uncertainty and Washington retains considerable power to restrict access to the world’s largest national consumer market. But Trump also faces pressure from American companies dealing with higher costs and disrupted supply chains. The likely path to an eventual agreement therefore lies somewhere between the two governments’ public positions. Washington has substantial leverage. Canada still has valuable energy, resources, customers and deeply embedded supply chains. The real negotiation is over how much each side is prepared to risk before those mutual dependencies outweigh the political value of holding firm.

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