On a chilly Thursday evening, just hours before Canadian Prime Minister Mark Carney was set to depart for a high-stakes trip to Asia, the already complex relationship between the United States and Canada took a dramatic turn. President Donald Trump, in a flurry of social media posts and a tense exchange with reporters, abruptly announced the termination of all trade talks with Canada. The catalyst? A $75 million television advertisement from Ontario that featured former U.S. President Ronald Reagan criticizing tariffs—a move Trump called "fake," "crooked," and, at one point, suggested was generated by AI.
The advertisement, aired during the first two World Series games, drew on a 1987 radio address in which Reagan argued that tariffs ultimately harm American workers and the U.S. economy. According to Reuters and OK! Magazine, the Ronald Reagan Foundation took issue with the ad, claiming Reagan's remarks were taken out of context, though some media outlets noted that the omitted portions did not significantly alter the message. Regardless, Trump seized on the controversy, posting on Truth Social: "ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED." He accused Canada of attempting to "illegally influence" the U.S. Supreme Court, which is currently reviewing key cases related to his tariff policies.
Trump did not mince words when speaking to reporters on the South Lawn of the White House before leaving for Malaysia. "They cheated on a commercial. Ronald Reagan loved tariffs, and they said he didn't. I guess it was AI or something," Trump said, as reported by OK! Magazine. He continued, "Canada got caught cheating on a commercial, can you believe it? What they did is really dishonest." He went so far as to call the ad "crooked," warning, "Well, that's dirty play, but I can play dirtier than they can, you know? Really very dishonest." The president's anger was palpable, and his words left little doubt that the trade relationship had entered a new, more contentious phase.
The fallout was immediate. Canadian Prime Minister Mark Carney, who had only recently met with Trump in the Oval Office, responded with measured resolve. Speaking to reporters before boarding his flight to Malaysia for the ASEAN Summit, Carney emphasized Canada's willingness to continue positive and constructive talks. "For months, we have focused on the difference between what we can control and what we cannot. We cannot control the trade policy of the United States. That policy is now very different from what it was in the 1980s, 1990s, or 2000s," Carney explained, according to India.com. He added, "Our teams have been working closely in detailed and productive talks. We are ready to continue that work whenever the US is prepared to resume discussions."
But Carney also made it clear that the sudden end to negotiations had real consequences. "A comprehensive trade agreement with the Trump administration is now out of reach," he told Reuters. The talks, which had reportedly made significant progress in areas such as steel, aluminum, and energy, were abruptly halted. Carney's comments reflected a sense of pragmatism, acknowledging the unpredictability of U.S. policy while signaling Canada's commitment to protecting its interests. "If we fail to make progress in trade talks, Canada will not arbitrarily allow the US access to its markets. We will do whatever is necessary to protect our people," Carney stated.
Ontario Premier Doug Ford, whose government was behind the controversial ad, sought to de-escalate the situation. Ford announced that the ad would be pulled after its scheduled run during the World Series, a move aimed at creating an opening for renewed dialogue. "I heard they were pulling the ad. I didn’t know they were putting it on a little bit more. They could have pulled it tonight," Trump remarked, before being informed by a reporter that the ad would be retired Monday. Still, the gesture did little to appease the White House.
The stakes in this dispute are enormous. The United States and Canada are each other's largest trading partners, with goods and services worth approximately 15,000 crore rupees exchanged every day. In 2024, the total value of bilateral trade was roughly ₹79 lakh crore, with the U.S. running a goods trade deficit of ₹5.21 lakh crore with Canada. The United States-Mexico-Canada Agreement (USMCA), which came into effect in 2020 and is scheduled for review in 2026, has been a cornerstone of North American trade, exempting 81% of imports from tariffs and promoting free trade between the countries.
Yet, Trump's administration has taken a sharply protectionist turn. Over the past year, he imposed a 35% tariff on Canada, with an additional 50% tariff on metals and 25% on automobiles. Goods covered under the USMCA are exempt, but the new tariffs have already begun to strain the relationship. Trump has repeatedly joked—though not always in a way Canadians find amusing—that Canada should become the 51st U.S. state. Carney, for his part, has dismissed the idea while expressing support for certain U.S. foreign policy initiatives, such as Trump's Gaza-Israel peace plan.
White House National Economic Council Director Kevin Hassett told Fox News that the president's decision reflected his mounting frustration with Canada's negotiating stance. "I think the President is very frustrated with Canada and rightly so," Hassett said. He described Canadian negotiators as "very difficult to deal with," echoing the administration's view that Canada has not been sufficiently accommodating in the stalled talks.
Trump's rhetoric has not been limited to trade policy. He accused Canada of "long cheating on tariffs, charging our farmers as much as 400 percent," and insisted, "Now they, and other countries, can’t take advantage of the U.S. any longer. Thank you to the Ronald Reagan Foundation for exposing this FRAUD. MAKE AMERICA GREAT AGAIN!!!" as he posted on Truth Social. The president also reiterated his belief that tariffs are vital for U.S. national security and the economy.
For Carney and his government, the path forward is uncertain but not without hope. As he departed for Asia, Carney emphasized the importance of developing new partnerships, particularly with the economic giants of the East. "We can’t control the trade policy of the United States," he told reporters, "but we can focus on building new relationships and expanding our economic reach." The prime minister's pivot to Asia underscores the broader impact of the dispute: as one door closes, another may open, but the loss of momentum in one of the world's most significant trading relationships will not be easily overcome.
As the two leaders dig in, the world watches closely. The fate of U.S.-Canada trade—and the livelihoods of millions who depend on it—hangs in the balance, shaped as much by political theater as by policy. For now, both countries are left to navigate the uncertain aftermath of a commercial, a controversy, and a clash of egos at the highest level.