08/08/2026
Well written!
Surprising confidence from a Prime Minister facing another round of enormous U.S. tariffs. Trump’s latest tariffs (set Aug 19) will hit roughly $20 billion in Canadian goods.
Yet, in spite of annexation threats, tariffs and deadlines Canada’s position is stronger than many realize. And Carney is clear: Canada will not grab a quick, piecemeal trade deal with Donald Trump.
CANADA HAS REASONS TO BE CONFIDENT
• Business believes in Canada. The TSX is at an all-time high. Canada’s S&P-TSX Composite closed at a new record 36,381 on Aug 7, after gaining 3.3% just this week.
• The TSX is up about 48% since Carney took office — now at a record high
• Canada just added 75,100 jobs in July. Unemployment fell to 6.4% — its lowest level in two years.
• Canada has added about 181,000 jobs in the past three months.
• Canada is selling substantially more to the rest of the world. In 2025, our US exports fell 3.7%, but exports to non-US markets jumped 11.1%, reaching $33.3 billion more than the previous year.
• Non-U.S. destinations accounted for 32.8% of Canadian exports in 2025, the highest share since 1981. Our dependence on the US is falling.
• The number of Canadian exporters selling to non-U.S. destinations has increased for the first time since 2019.
• Foreign investment into Canada has been remarkably strong. Canada attracted $93 billion in foreign direct investment in 2025, the second-highest level on record and well above the ten-year average.
• Canada is building infrastructure across Canada to ensure we diversify our trade and US dependence with port expansions, pipelines, opening the north, putting dollars to defence and more
* Canada is finally treating itself as one domestic market. Estimates put the long-run economic opportunity from eliminating all federal and provincial internal trade barriers at as much as $200 billion. The federal Free Trade and Labour Mobility in Canada Act is now in force.
• Provinces and territories are simultaneously pursuing additional mutual-recognition and labour-mobility reforms.
• The economy has shown resilience despite the trade war. Real GDP jumped 0.5% in April, with 14 of 20 sectors expanding. Goods production rose 1.2%, while mining, oil and gas surged 2.9%
CANADA HAS BEEN BUSY BUILDING OPTIONS
In 2025 Canadian exports to non-US markets reached 32.8% — its highest level in more than 40 years. Canadian exports to countries outside the United States grew 11.1%, while exports to the U.S. fell 3.7%. And that diversification has continued into 2026: exports to non-U.S. markets grew another 4.1% in the first quarter.
Canada has been aggressively working on new trade and security partnerships in energy, critical minerals, agriculture, defence, technology and more. These are new markets. New agreements. New export infrastructure. New Major projects. And Internal trade reform.
Carney has signed more than 20 economic and security agreements across five continents: India, ASEAN, the Philippines, South Korea, Thailand, Mercosur, Mexico, Australia, throughout the Europan Union including Germany, and across the Indo-Pacific. His goal: doubling Canada’s non-U.S. exports within a decade.
Canada certainly hasn’t replaced the American market. But we are becoming less dependent on it. And that matters at the negotiating table.
CANADIANS HAVE CREATED SOME LEVERAGE TOO
Canadian leisure trips to the United States fell 21.5% in 2025 — 3.2 million fewer visits. Canadian travel spending in the U.S. dropped by $3.3 billion. Buy Canadian became more than a slogan. And suddenly American tourism destinations, exporters and businesses have their own reason to want this dispute resolved.
THEN THERE’S THE CLOCK
Trump faces midterm elections in November. Tariffs may be politically popular with parts of his base, but higher costs and economic uncertainty aren’t nearly as attractive when voters are deciding who controls Congress.
US ECONOMICS
• The U.S. labour market just stumbled. The U.S. lost 23,000 jobs in July,. May and June U.S. job growth was also revised downward by a combined 103,000 jobs.
• The U.S. dollar has weakened recently. Following today’s poor jobs report, the dollar fell again against major currencies.
• American inflation remains stubborn at 3.7% in June, well above its 2% target. Tariffs are one of the inflationary pressures.
• American importers pay the tariffs and pass those costs downstream. Tariffs mean US manufacturers, builders and consumers ultimately bear the cost
• This is particularly problematic because the Canadian and American economies were deliberately built around integrated continental supply chains.
• Despite the tariff offensive, the U.S. goods trade deficit in 2025 was the largest on record.
• Canada is actively recruiting other customers. Canada’s exports to the U.S. are falling while non-U.S. exports have risen. Once Canadian producers establish customers, infrastructure and supply chains in Europe and Asia. That business doesn’t simply come back to America when Trump is gone.
• Other allies are hedging too. The US administration recently imposed new tariffs covering imports from 60 countries When existing agreements are under constant threat of tariffs, and investigations, governments and businesses diversify their exposure to the United States.
BOTTOM LINE
Carney doesn’t need the United States to be weak for Canada to gain negotiating leverage. He simply needs Canada to become less dependent on reaching a deal immediately — while the cost to the United States of not reaching one continues to rise.
Canada doesn’t have to overpower the United States economically. In fact, prolonging this fight gives Canada OPTIONS. And options give Carney something else at the negotiating table:
The strongest negotiating position is knowing you can walk away. And Carney has spent the past year building Canada’s alternatives.
So what do you think? 🇨🇦 Is Canada finally in the driver’s seat?
GOLDSBURY REPORT