On the heels of a turbulent year in North American trade relations, U.S. President Donald Trump has once again cast uncertainty over the future of economic ties with Canada. Speaking to reporters outside a gala for the 2025 Kennedy Center Honors on December 7, Trump addressed the ongoing trade dispute with Canada, which has simmered since he abruptly halted negotiations in October. The move was triggered by an Ontario-sponsored advertisement quoting former U.S. president Ronald Reagan criticizing tariffs, a jab that evidently struck a nerve in Washington.
When pressed about whether he would resume the trade talks that have been on ice for months, Trump offered a noncommittal response: “We’ll see.” According to The Canadian Press, this simple phrase has left policymakers and business leaders on both sides of the border in suspense. Trump, never one to shy from blunt assessments, went on to describe his relationship with Canadian Prime Minister Mark Carney as positive, but with a caveat. “Canada makes a lot of things we don’t need because we make them also,” he remarked, suggesting a persistent skepticism about the balance of trade. Yet, he added, “We’ll work it out.”
The backdrop for these remarks was no ordinary press scrum. The president, who for the first time took the stage at the Kennedy Center Honors rather than observing from the balcony, was in a festive mood, even joking: “Canada is a special place, and they really are good at ice hockey, aren’t they?” But beneath the levity, the stakes remain high. The trade freeze has created ripples across industries, with tariffs and duties biting into profits, supply chains, and consumer prices.
Trump’s decision in August 2025 to hike duties on Canadian goods to 35 percent was only the latest salvo in a series of escalating trade actions. Both Canada and Mexico have faced a barrage of U.S. tariffs on steel, aluminum, automobiles, lumber, and copper, although Mexico has received some extensions and faces a slightly lower 25 percent duty. As reported by The Canadian Press, these moves have driven both neighboring countries to search for off-ramps and make the case for duty-free continental trade, all while the fate of the Canada-U.S.-Mexico Agreement on trade (CUSMA) hangs in the balance.
The first glimmer of hope in months appeared on December 5, when Trump and Carney met privately for the first time since the trade talks went south. The meeting, which took place during the FIFA World Cup draw—where they were joined by Mexican President Claudia Sheinbaum—lasted a productive half-hour. “We spoke for a half-hour. Very good, very productive. (We) talked mostly trade,” Trump said, according to The Canadian Press. Afterward, the Prime Minister’s Office announced that the leaders had agreed to continue working on CUSMA, signaling a possible thaw in the frosty relations.
CTV News political commentator Scott Reid weighed in on the developments, characterizing the Canadian reaction to Trump’s comments as “a real shoulder shrug.” The sense among Canadian officials and analysts, as Reid explained, is that unpredictability from the White House has become the new normal. “There’s a certain fatigue, but also a determination to keep lines of communication open,” Reid observed, underscoring the pragmatic approach Canada has adopted in recent months.
Yet, uncertainty lingers. Trump mused aloud earlier in the week about letting CUSMA expire when it comes up for review next year, a move that would upend years of painstaking negotiation and integration across North American markets. With both Canada and Mexico actively lobbying for tariff relief and the preservation of duty-free trade, the specter of a return to pre-agreement conditions looms large. Businesses, especially those in manufacturing and agriculture, are bracing for further disruptions.
Meanwhile, the political calendar has added another layer of complexity. The Kennedy Center Honors, which Trump hosted for the first time as president, brought together luminaries from the arts, including Sylvester Stallone, Kiss, Gloria Gaynor, George Strait, and Michael Crawford. But even as the spotlight shone on cultural achievement, the undercurrent of economic anxiety was palpable. As The Canadian Press noted, the event marked the first private meeting between Carney and Trump since the dramatic pause in trade talks, raising hopes that dialogue might yet prevail over discord.
Elsewhere in Canada, economic uncertainty has been the theme of the year. The Bank of Canada is widely expected to hold its benchmark interest rate steady during its upcoming meeting, capping off a year marked by trade tensions and fluctuating growth. According to LSEG Data & Analytics, as of Friday, financial markets put the odds of a rate hold at nearly 93 percent. Strong job reports and an unexpected annualized GDP jump of 2.6 percent in the third quarter have bolstered confidence, but the central bank remains cautious. The year began with rate cuts in January and March, followed by a pause and then further reductions in September and October, reflecting the unpredictable economic environment.
In Montreal, G7 ministers are gathering this week to tackle another issue with far-reaching implications: artificial intelligence and quantum computing. As Canada holds the G7 presidency, the meetings are expected to focus on digital technology’s role in economic competitiveness and resilience. Artificial Intelligence Minister Evan Solomon predicted a “productive” summit, while Paul Samson of the Centre for International Governance Innovation highlighted the growing links between technology and broader economic policy.
On the labor front, Air Transat is poised to begin suspending flights as a strike deadline approaches. The Air Line Pilots Association, representing 750 pilots, issued a 72-hour strike notice over the weekend. If negotiations in Montreal fail to yield an agreement by Wednesday, December 10, a shutdown could disrupt travel plans during the peak holiday season, adding to the sense of unease in Canadian business circles.
Finally, Ottawa’s latest budget bill has raised concerns among disability advocates. Buried in Bill C-15 are amendments that could end free postage for people who are blind, a service that has long enabled access to reading materials. Laurie Davidson, executive director of the Centre for Equitable Library Access, warned that the change could jeopardize the delivery of thousands of accessible books and audiobook players each year. While the proposed amendment is a small provision in a sprawling budget bill, its impact could be profound for Canadians with vision impairments.
As the year draws to a close, Canada finds itself at a crossroads. Trade tensions with the U.S. remain unresolved, economic policy is in flux, and social programs face new challenges. Yet, through diplomatic persistence and a willingness to engage, Canadian leaders continue to seek common ground with their southern neighbor—even when the answers are anything but certain.
