U.S. President Donald Trump and Canadian Prime Minister Mark Carney at G7 Summit in Evian-les-Baines, France, June 18, 2026. Photo credit Christopher Katsarov, Canadian Press
Unleash Prosperity, a nonprofit economics policy group led by notable free marketeers Steve Forbes, Art Laffer, and Steve Moore, posted an excellent piece on their website on August 27th, “Why Canada?”, calling for an end to President Trump’s escalating trade war with Canada.
As the article points out, the free trade agreements of NAFTA in 1994 and USMCA in 2020 significantly expanded trade between the U.S. and Canada, contributing to the economic growth of both countries. For those concerned with trade deficits, U.S. imports and exports with Canada over the past 30 yeas have largely offset each other (see graph in the Unleash Prosperity article).
The new trade war with Canada originated in June 2025 with Trump’s announced doubling of steel and aluminum imports from 25-percent to 50-percent with foreign counties. This led to trade talks with Canada that eventually collapsed earlier this month (August 2026) when Trump announced that the U.S. would increase tariffs on Canadian cars, trucks, and auto parts to 50-percent on top of retaining the 50-percent tariffs on Canadian steel and aluminum. Canada retaliated almost immediately by announcing higher tariffs, to be effective on September 8, 2026, on roughly 700 U.S. products with an estimated product value of approximately US$20 billion. The higher Canadian tariffs will be set at 15-percent, 25-percent, and 50-percent depending on the product, including a counter-tariff on U.S. steel and aluminum of 50-percent..
Unleash Prosperity, which is mostly supportive of Trump’s policies, deserves plaudits for advocating an end to a counter-productive trade war with Canada that will hurt both American businesses and consumers. In fact, the group even calls for a new zero-to-zero tariff policy, which should be the ultimate objective with all cooperative trading partners.
The full content of Unleash Prosperity’s article is provided below:
Why Canada?
August 27, 2026
A trade war with Canada doesn’t make a lot of sense to us. We’ve had two major trade deals with Canada in recent times. The first was NAFTA and the second was Trump’s USMCA.
We were fans of both these free trade agreements and the chart below shows why.
Our trade volume – imports and exports – to and from Canada and Mexico have roughly tripled over the past 30 years. Also look at the upward trend in bilateral U.S.-Canada trade since the passage of USMCA in Trump’s first term. When two nations voluntarily trade with each other, they are both better off. Hard stop!
Our trade deficit – a statistic we don’t care too much about – has been fairly stable with Canada and certainly hasn’t hit any worrisome level.
Trump has often advocated trade reciprocity and a level playing field. We’re all for it, and we’ve always supported ratcheting down North America tariffs to ZERO.
Even for those who are concerned about trade deficits, the deficit with China is still about six times higher than that of Canada.
Our view is that Trump should kiss and make up with our best trade partner and offer up a new zero-for-zero tariff policy, which would level the playing field and greatly benefit both nations.
Steve Dewey is a member of the Bretton Woods Committee, a fellow at the Ben Franklin Fellowship, founder of GeoFinancial Trends, LLC (www.geofinancialtrends.org) and writes on Substack (stevedewey.substack.com). He can be reached at steve@geofinancialtrends.org
