Sen. Adam Schiff (D-Calif.) and economists, including Justin Wolfers, are warning that the collapse of U.S.-Canada trade talks last week will cost American families and businesses, after negotiations broke down late Friday night, triggering 50% tariffs on roughly $20 billion worth of Canadian goods.
Democrats Blame Trump for the Breakdown
Schiff said in a post on X that Canada is “one of our closest allies and friends. Not our enemy,” warning that President Donald Trump‘s “self-defeating tariff wars will only raise our prices, and further drive Canada away.”
He called for an end to “this insanity.”
Pennsylvania Governor Josh Shapiro (D) said Trump “chose chaos and cruelty” by “doubling down on his reckless trade war.”
He said the trade war deepens the strain on Pennsylvanians already grappling with grocery and gas prices driven up by the war in Iran, especially given that Canada is the state’s largest trading partner.
Sen. Bernie Sanders (I-Vt.) grouped the trade war with other foreign policy flashpoints in “another week in Trump’s dysfunctional government,” while Rep. Jamie Raskin (D-MD) called it an “idiotic trade war.”
Calls Grow To Reopen Negotiations
Sen. Susan Collins (R-Maine) said the “on-again/off-again” talks are creating costs and uncertainty for Maine businesses, which import roughly $2 billion in non-petroleum goods from Canada annually.
“I urge both sides to return to the negotiating table,” Collins added.
On Saturday, Senate Minority Leader Chuck Schumer (D-N.Y.) said the breakdown shows Trump “once again picked a fight with an ally instead of a rival,” warning that tariffs on Canada would raise costs for American families and businesses while doing nothing to address the trade practices of countries like China.
Economists Say Trust, Not Tariffs, Built the Relationship
University of Michigan professor Wolfers said a real trade deal “isn’t a handshake photo-op in front of an imported car.”
He cited the integrated North American auto industry, where parts cross the border repeatedly before a vehicle is finished, adding that threatening tariff walls makes “trust disappear, and so does the investment.”
James Thorne, chief market strategist at Wellington Altus, called Canada’s “elbows-up” posture “embarrassing,” saying broad retaliation amounts to “emotional performance masquerading as economic policy” rather than addressing the country’s real problems, weak domestic investment and stalled productivity.
Tensions Escalate
Trump and Canadian Prime Minister Mark Carney had reached an agreement in principle earlier in the week, with Trump pausing the tariffs until a Saturday deadline before talks collapsed and Canada announced retaliatory tariffs effective Sept. 8.
Trump on Sunday said Canada wants “the benefits of being a state, without being one,” criticizing Canadian tariffs on American farmers.
Carney, in a post on X, said Canada has grown stronger since the trade war began, adding that the country is now “more unified, more determined and more ambitious.”
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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