You can't buy your way out of a trade war by simply walking back your own rules.
That's the harsh reality check Washington just delivered to Ottawa. In a blunt assessment at the Aspen Security Forum, U.S. Trade Representative Jamieson Greer made it clear that the Trump administration is not handing out gold stars for Canada's recent policy reversals.
For months, Prime Minister Mark Carney's government has tried to smooth over relations by killing off the controversial digital services tax and ordering a rollback of the Online Streaming Act's aggressive tech regulations. Ottawa viewed these as massive concessions designed to clear the runway for crucial Canada-United States-Mexico Agreement (CUSMA) talks.
Washington views them as something entirely different.
"I'm glad they did that, but they don't really get credit for doing something bad and then undoing it," Greer said. "That's just good practice on their part."
It’s a brutal, transactional stance that reveals a massive disconnect in how the two neighbors view trade diplomacy. Ottawa thinks it's playing a game of strategic compromise. Washington is playing hardball, and they expect real structural market access before they even think about offering tariff relief.
The Illusion of the Reset Button
Canada's strategy over the last year has been highly reactive. Prime Minister Carney dropped the planned digital services tax at the eleventh hour—literally hours before payments from American tech giants were set to begin—to get the U.S. back to the negotiating table. Soon after, the federal government stepped in to make the CRTC reconsider tripling financial contributions for online streaming services like Netflix, a move that had infuriated U.S. business groups and Ambassador Pete Hoekstra.
To Canadian negotiators, these were painful, high-stakes compromises. To the Trump administration, Canada was simply removing self-inflicted roadblocks.
This gets to the core of the U.S. negotiating style in 2026. Under the current administration, trade is seen through a purely mercantilist lens. You don't get credit for stopping a behavior the U.S. didn't want you to start in the first place. If Ottawa wants genuine trade concessions or a smooth renewal of CUSMA before its ultimate expiration, they're going to have to offer something new.
What Washington Actually Wants
If dropping the digital tax and rolling back streaming regulations was just the baseline, what does a real concession look like to the U.S.?
The Trump administration remains hyper-focused on bilateral trade deficits. While the overall U.S. trade deficit with Canada is heavily driven by energy and oil imports, the White House continues to use that broad number as a political cudgel. If you strip energy out of the equation, the U.S. actually runs a trade surplus with Canada. But politics doesn't care about nuance.
To get "credit" in Washington, Canada will likely have to open up sectors it has historically protected with fierce national pride:
- Dairy Supply Management: The eternal thorn in the side of U.S. agricultural lobbies. Washington wants deep, permanent access to the Canadian dairy market.
- Chinese EV Integration: The U.S. is deeply concerned about Chinese electric vehicles and components slipping into the North American supply chain via Canada or Mexico. Any perceived softness from Ottawa on this front instantly halts progress.
- Defense Spending: While not strictly a trade issue, Washington increasingly ties economic goodwill to NATO commitments.
Essentially, the U.S. wants Canada to make structural sacrifices, not just regulatory retreats.
Stalled Talks and the 10-Year Clock
The timing of this rhetorical cold shoulder couldn't be worse. Following the decision not to extend CUSMA, a ticking clock was triggered. The three nations now face a rolling review process.
While formal trade negotiations have already kicked off between Washington and Mexico, the desk for Ottawa remains empty. No formal trade talks have begun between Canada and the U.S.. Instead, Greer has been handing Ottawa a list of unilateral proposals to "improve" the U.S. position.
This asymmetry is jarring. For Canadian businesses, particularly in manufacturing and tech, this delay breeds massive uncertainty. Exporters are left wondering if they'll still have predictable, tariff-free access to their largest market.
The Path Forward is Personal
There is a silver lining in Greer's otherwise frosty remarks. He noted that he is in weekly contact with Canadian officials and pointed to a direct path out of the swamp.
"The reality is, if the president and Prime Minister Carney have an understanding, then I'm sure we can put together something that makes sense to get us over the hump," Greer said.
In other words, standard bureaucratic diplomacy is dead. The entire trade relationship now hinges on personal chemistry and backroom deals between Trump and Carney. Carney himself seems to understand this reality, acknowledging recently that any real breakthrough will have to happen at the very top. He has rightly insisted that Canada won't sign a bad deal just to get it over with, but the leverage is heavily tilted toward the south.
For Canada to navigate this, negotiators must stop expecting gratitude for returning to the status quo. The U.S. trade apparatus under the current administration doesn't operate on diplomatic goodwill or historical alliances. It operates on leverage. Ottawa's next move shouldn't be another defensive retreat. It needs to find areas where Canada holds genuine structural leverage—like critical minerals and energy security—and start playing the same transactional game Washington is playing.
