Carney says Canada is ready to return to the table with Washington after Trump predicts a deal “fairly soon,” but Ottawa insists sovereignty, culture and trade-deal freedom are not negotiable
Toronto, September 15, 2026 | Peacock Tariff Consulting Canada Trade Desk
Three weeks after Canada walked away from the negotiating table and the United States answered with 50 per cent tariffs on roughly US$20 billion of Canadian exports, the two governments spent the weekend and the start of this week signalling, cautiously and from a distance, that they may be ready to talk again. Prime Minister Mark Carney told Bloomberg News on Monday that the August collapse of the talks had “clarified” Canada’s red lines, that there is “not a pride thing” standing in the way of renewed negotiations, and that Ottawa is prepared to sit down for a deal that respects Canadian sovereignty and cultural institutions. His comments came two days after U.S. President Donald Trump, taking questions in Dublin, said an agreement with Canada could come “fairly soon.”
Neither leader announced a date, a venue or an agenda. No formal negotiating round has been scheduled since August 21, when Carney recalled his delegation from Washington. But for Canadian importers and exporters absorbing the steepest bilateral tariff wall in the modern history of the relationship, the tone shift is the first meaningful signal in nearly a month that the escalation cycle may have a ceiling. It arrives in the same week that a second wave of U.S. measures takes effect, including expanded product coverage under Section 338 of the Tariff Act of 1930 starting today and outright import bans on Canadian alcohol, certain dairy products and large motorcycles beginning September 29.
What Carney said, and what he did not
Speaking in Toronto on the opening day of the inaugural Canada Investment Summit, Carney was asked by Bloomberg whether the question of who moves first was holding up a return to talks. “There’s not a pride thing from our perspective,” he said, according to the Bloomberg transcript published by Yahoo Finance. “We’re practical people that know what our bottom lines are, what our red lines are for sovereignty, for culture, not being restricted on our ability to sign other trade deals.” He added that he believes his American counterparts “maybe, perhaps, understand those red lines a little more clearly now, given what’s happened,” and that Canada is “ready to sit down.”
In a separate account of the same interview, CTV News reported Carney saying a “mutually advantageous” agreement remains possible, describing it as one “that respects our sovereignty, respects obviously the U.S. sovereignty, respects our cultural institutions.” Asked about Trump’s weekend remarks, Carney said: “So, I welcome the president’s comments.” He also framed the timeline in deliberately open terms. “We’ll sit down when it makes sense,” he said. “Canada and the US have a very long relationship. We sometimes go through periods where there are tensions in that relationship. Provided we continue this approach, we’ll come to some agreement at some point.”
Notably absent from the prime minister’s remarks was any suggestion that Canada would suspend or roll back the counter-tariffs that took effect September 8 as a precondition for talks. Nor did Carney indicate that Ottawa would revisit the three specific U.S. demands that he has said sank the August deal: changes to Canadian cultural protections around the French language, limits on Canada’s ability to sign trade agreements with third countries, and the broader package of concessions that Carney described at the time as asking “too much” while offering “too little.” Instead, he pointedly told Bloomberg that Canada is “not going to slow down” on trade diversification, noting that he flies to France immediately after the summit for talks on deepening ties with the European Union.
Trump’s Dublin remarks
The president’s comments that prompted Carney’s response were delivered on Saturday, September 12, during a joint appearance with Irish Taoiseach Micheal Martin. A reporter asked whether the administration was considering withdrawing from the Canada-United States-Mexico Agreement, known in Canada as CUSMA and in Washington as USMCA. Trump did not answer that question directly. Instead, according to CTV News, he said: “We’re going to have a great relationship with Mexico. We actually have a good one with Canada, but the United States has been ripped off for 50 years by Canada.” He went on to claim that “we don’t need their product, and they need our product,” and predicted that a deal would come “fairly soon” because, in his words, “Canada wants to make a deal very badly.”
Trump also singled out agriculture, repeating a claim that Canada had been “charging our farmers 400 per cent tariffs,” an apparent reference to the over-quota tariff rates in Canada’s supply management system for dairy, poultry and eggs. Ralph Goodale, the former cabinet minister who sits on Carney’s Canada-U.S. trade advisory group, told CTV News Channel the characterization was “factually wrong” and “part of the PR game.” Bloomberg reported that Trump downplayed the prospect of leaving USMCA altogether, an important signal given that the agreement’s formal joint review over the summer ended without the United States agreeing to a straightforward renewal. Under that outcome, the pact remains in force but is subject to annual reviews rather than the 16-year extension that a full renewal would have delivered.
The president’s decision to pair Canada with Iran in the same breath, remarking that he hoped “Canada appreciates being in the same sentence with Iran,” drew sharp reaction in Ottawa. CTV political commentator Scott Reid, a former communications director to prime minister Paul Martin, said the framing showed Canada is “now treated expressly as an enemy” and predicted it could “stiffen the spine” of Canadians weighing any future deal.
How the talks collapsed
The current standoff traces to the summer. On July 20, the White House issued three proclamations under Section 338, a rarely used Depression-era provision that permits the president to impose duties of up to 50 per cent on goods from a country found to be discriminating against U.S. commerce. The proclamations targeted Canadian practices in three areas: provincial liquor board treatment of American alcohol, the allocation of dairy tariff-rate quotas under CUSMA, and Canada’s 25 per cent tariff and quota regime on non-originating U.S. vehicles. The duties were initially set for August 19, then suspended for three days when Canada signalled it would modify the practices at issue.
Those three days were the window in which senior officials tried to close a broader deal that, according to Bloomberg, would have reduced U.S. tariffs on core Canadian sectors including steel and automotive in exchange for the elimination of a range of Canadian trade restrictions. On August 21 the talks broke down. Carney said the U.S. side introduced “last-minute changes” to the proposed terms that he described as “unfair, uneconomic” and unacceptable. Washington blamed Ottawa. The next day, August 22, the 50 per cent Section 338 duties took effect on about US$20 billion (roughly C$27.6 billion) of Canadian exports covering wine, spirits, dairy, furniture, cement, clothing, fishing equipment, hockey gear and a long list of other goods. Carney told reporters at the time that Canada was effectively “at war” economically and would match the measures “dollar for dollar.”
Canada’s counter-tariffs took effect on September 8. The Department of Finance published a list of more than 700 U.S. tariff lines subject to surtaxes of 15, 25 or 50 per cent, with each rate set to mirror the U.S. rate on the corresponding Canadian good. Targets included U.S. steel and aluminum, which saw existing surtaxes doubled to 50 per cent, along with dairy, household appliances, agricultural equipment, pulp and paper and electronics. Ottawa paired the measures with a C$7.5 billion support package for affected businesses and added C$1.5 billion to the Regional Tariff Response Initiative delivered through the seven regional development agencies.
Washington responded the same day. Trump signed five new proclamations: three imposing outright import bans on Canadian packaged alcohol, whey and molasses products, non-alcoholic beer and motorcycles above 800 cc, effective September 29, and two modifying the product scope of the existing 50 per cent duties, effective September 15. The administration also directed the U.S. Trade Representative and the General Services Administration to remove Canadian-origin products from the GSA Multiple Award Schedules, a procurement channel worth more than US$50 billion annually. Canada-U.S. Trade Minister Dominic LeBlanc called the bans “unjustified” but said Ottawa would “work in good faith and constructively” whenever Washington was ready to engage.
Reading the signals
Trade watchers on both sides of the border have been careful not to over-interpret the weekend exchange. Diamond Isinger, a policy strategist who advised the Trudeau government during the NAFTA renegotiation, told CTV that “it’s hard to keep up with the ups and downs of the Canada-U.S. dynamic right now.” She cautioned that a return to talks would require Washington to move off the position it held on August 21. “If they simply would like to resume talks at the same starting point things were severed, those were not realistic expectations for Canada to agree to,” she said. “If talks resume, I expect we would need a high degree of good faith, a willingness to bring new offers to the table on the part of the U.S. because Canadians wouldn’t accept the status quo of what was on the table weeks ago.”
Goodale, who has been one of the few advisory group members to speak publicly about the August offer, described it to CTV as “one sided” and “fundamentally uneconomic.” That assessment matters because it suggests the gap between the two sides is not merely about tone or sequencing but about substance: the American package, as Ottawa understood it, would have required Canada to accept restrictions on its foreign trade policy that no Canadian government of either party has ever contemplated.
Still, officials on both sides have confirmed that channels remain open. LeBlanc said last week that conversations with U.S. officials “haven’t stopped” even after formal talks ended, and that he remains in contact with U.S. Trade Representative Jamieson Greer. Carney has said he is in “regular contact” with Trump. Finance Minister Francois-Philippe Champagne, asked by The Associated Press on Monday whether Canada could withstand a prolonged period without a deal, said: “We have the wherewithal to support our industries, to support our workers for as long as it takes, with whatever it takes.”
The economic stakes
The rhetoric of “not needing” Canadian products sits uneasily with the trade data. U.S. Census Bureau figures cited by CTV show Canada shipped US$382 billion in goods to the United States in 2025 and bought US$334 billion in return. A TD Economics analysis found that 34 U.S. states sell more goods to Canada than to any other foreign market, and that Canada ranked as the second-largest U.S. trading partner in 2024, behind only Mexico. Before the tariff escalation, close to 80 per cent of Canadian exports went south.
For Canada, the concentration of that exposure is now the central macroeconomic risk. Bloomberg reported on Monday that the new U.S. 50 per cent tariffs “will hammer many small- and medium-sized businesses, including family firms, that up to this point have been largely sheltered from the trade war,” because the Section 338 lists reach into consumer goods and food categories that earlier Section 232 metals and auto tariffs did not. The Canadian Federation of Independent Business estimates that 53,112 businesses are directly affected by U.S. tariffs, Canadian counter-tariffs or both, comprising 13,160 exporters and 45,414 importers, with impacted firms reporting median added monthly costs of about C$65,000. CFIB survey data show 26 per cent of business owners reporting major negative impacts from the U.S. tariffs and 28 per cent reporting similar damage from Canada’s own counter-tariffs.
“We have been telling government that the counter-tariffs would have a far broader impact than the U.S. tariffs,” said Corinne Pohlmann, CFIB’s executive vice-president of advocacy, in a statement reported by Retail Insider. “Programs that only help a few thousand businesses are unacceptable when tens of thousands need support.” CFIB is pressing for a dedicated small business tariff relief program offering up to C$70,000 per firm, a fast-track remission desk for small importers, and a cut in the small business corporate tax rate from 9 to 6 per cent retroactive to January 1.
Macroeconomic indicators have so far been mixed. Statistics Canada reported Monday that consumer prices rose 3 per cent year over year in August, in line with economists’ expectations, as falling oil prices offset some tariff pass-through. The second-quarter GDP rebound reported in late August predated the Section 338 duties, and most bank economists have flagged downside risk to third- and fourth-quarter growth if the current tariff levels persist into the holiday season.
What a deal would need to cover
If talks do resume, negotiators will be working from a far more complex tariff map than the one that existed in July. Any agreement would need to address at least five layers of measures. First are the U.S. Section 232 national security tariffs on Canadian steel, aluminum and autos, which predate the current dispute and which the August package would reportedly have reduced. Second are the Section 338 duties themselves, now covering an expanded product list as of today. Third are the September 29 import bans, which under the proclamations’ own terms revert to 50 per cent duties if struck down by a court but otherwise remove the affected goods from the U.S. market entirely. Fourth is the GSA procurement exclusion. Fifth is Canada’s own counter-tariff schedule, including the doubled 50 per cent surtaxes on U.S. steel and aluminum.
On the Canadian side, the three underlying U.S. grievances remain unresolved. Provincial liquor boards in several provinces continue to restrict or surcharge U.S. alcohol; the White House specifically cited Saskatchewan’s August 27 decision to add a 50 per cent levy on U.S. alcoholic beverages as evidence of “increased” discrimination justifying the bans. Canada’s dairy TRQ allocation methodology, which the United States has twice challenged under CUSMA’s dispute settlement chapter, has not changed. And Canada’s 25 per cent tariff on non-originating U.S. vehicles, imposed in 2025 in response to U.S. auto tariffs, remains in place.
Carney’s “red lines,” by contrast, concern what Canada will not give. The prime minister has been explicit that cultural protections, including French-language content rules and the cultural exemption that has been part of every Canada-U.S. trade agreement since 1988, are off the table. So is any clause limiting Canada’s freedom to negotiate with other partners, a demand that would have complicated Ottawa’s January arrangement with China on electric vehicles and canola, its pending EU partnership talks, and the trade diversification agenda that Carney has made the centrepiece of his economic program.
Implications for importers and exporters
For Canadian businesses, the practical message from this week is that hopeful rhetoric should not change compliance planning. Nothing said in Dublin or Toronto alters the legal effect of the measures now in force or scheduled to take force. Exporters of goods on the September 29 ban lists, including packaged beer, wine, spirits, cider, whey protein, molasses, non-alcoholic beer and motorcycles over 800 cc, should assume the bans will take effect as written. Under the proclamations’ transitional rule, goods that have been imported into the United States but not yet entered for consumption before September 29 remain subject to the 50 per cent duty rather than the ban, which creates a narrow window to clear inventory already in U.S. bonded warehouses or in transit.
Exporters of goods newly added to the 50 per cent duty lists as of today, including a range of cheeses, hides and furskins, structural steel and aluminum products, furniture, lamps, golf carts, small-engine passenger vehicles and paper, should update their landed-cost models immediately. The modification proclamations also reverse the earlier rule that kept Section 338 and Section 232 duties from stacking, meaning some aluminum and structural steel products now face combined additional duties of 75 per cent on top of normal MFN rates. CUSMA origin provides no relief from Section 338 duties or bans.
Canadian importers of U.S. goods face the mirror image. The September 8 surtax schedule is in force, and Finance Canada’s remission process remains the principal avenue for relief where U.S. inputs have no practical substitute. CFIB’s call for an SME-specific remission desk reflects a widely reported concern that the existing process is slow and oriented toward larger applicants. Importers should also monitor whether any resumption of talks brings a Canadian goodwill gesture similar to the September 2025 removal of surtaxes on CUSMA-compliant U.S. goods, which Ottawa deployed the last time it sought to reset negotiations.
Finally, the diversification agenda that Carney is pursuing in parallel has its own compliance dimension. The China arrangement has cut tariffs on Canadian canola seed to 15 per cent and eliminated them on canola meal, peas, lobster and crab through the end of 2026, while opening a 49,000-unit quota for Chinese EVs at a 6.1 per cent tariff. Businesses positioned to serve those markets have a live opportunity; those whose supply chains depend on the U.S. market alone face an extended period of uncertainty that this week’s diplomatic warming does not, by itself, resolve.
Outlook
The next two weeks offer several natural inflection points. The September 29 import bans are the most consequential, since a ban is harder to walk back than a tariff and creates immediate shelf gaps in U.S. markets for Canadian whisky, wine and craft beer. Carney’s European trip, including an address to the European Parliament, will test how much leverage Canada can build outside North America. And the investment summit, which wraps up today, has already produced one headline commitment, Bell Canada’s expansion of a Saskatchewan data-centre project to more than C$50 billion, that Ottawa will hold up as evidence that capital is flowing north despite the trade war.
Whether any of that translates into a negotiating breakthrough depends on a question neither leader answered this week: what, specifically, has changed since August 21. Carney’s answer is that Washington now understands where Canada’s limits lie. Trump’s answer is that Canada “wants to make a deal very badly.” Both may be true. But until one side puts a revised text on the table, Canadian businesses should treat the tariff schedule as it stands today, expanded and stacked, as the operating reality for the fall.