US-Canada tariffs: analyst Spannaus says the free-trade model is shifting

Trade relations between the United States and Canada are going through a phase of strong tension. The collapse of negotiations between Ottawa and Washington has led both governments to introduce new tariffs, in what looks like a new chapter of the North American trade war.

Andrew Spannaus, a US journalist, political analyst and university lecturer, explained the reasons behind the standoff to RSI. According to Spannaus, the Trump administration wants to change the trade model with Canada to protect certain American industries, particularly cars, timber, metals and aluminium. Also in the crosshairs is the free trade agreement between Canada, the United States and Mexico, a model the administration no longer likes, even though it was Trump himself who negotiated its current version.

According to Spannaus, the tariffs now in place affect only 5% of trade between the two countries, but the sums involved are still significant. Finding a lasting agreement acceptable to both sides, he says, will not be easy.

The Canadian front

Canadian Prime Minister Carney chose not to give ground at the negotiating table, a decision that, according to Spannaus, was among the goals he was elected on. This is not the first time a trading partner has stood up to Washington: last year China responded to tariffs by blocking rare earths and agricultural purchases from the United States, while Brazil rejected a change of position that Trump tried to impose regarding Bolsonaro and his trial. Canada's weight, however, remains different from China's.

According to Spannaus, the breakdown of talks, which had seemed close to a deal with tariff cuts in key sectors, came for two reasons: resistance from some members of the US administration, particularly the Commerce Secretary, to reopening free trade in those sectors, and the introduction of non-economic issues into the negotiation.

Canada's "dollar-for-dollar" strategy involves sacrifices for the country's citizens. Carney is betting that the cost will also be high for the United States, but Spannaus warns of the risk of a spiral that could weigh on both economies.

In the United States the issue is now less central to public debate, but higher prices have been felt. According to Spannaus, around a third of American voters, a declining share, still back the administration's hard line as a sign of firmness. That support is eroding among independents too, who are increasingly doubtful of Trump's ability to genuinely defend the country's economic interests: many fear the policy will end up hurting Americans themselves.