Lutnick's Last-Minute Demands Doom US-Canada Trade Talks

US and Canadian trade talks collapsed last week after Commerce Secretary Howard Lutnick made last-minute demands that upended the deal framework. The collapse led to 50% tariffs on billions of dollars worth of Canadian exports, hitting autos, steel, and aluminum particularly hard.

The talks had seemed promising just three days earlier, when President Trump announced a trade deal with Canada was imminent and paused tariffs to give negotiators room to finalize terms. However, Lutnick's revised position sought to limit auto tariff relief primarily to light vehicles, carving out medium- and heavy-duty trucks manufactured in Canada from any concessions.

Canadian Prime Minister Mark Carney cited the potential harm to key Canadian industries as the reason for walking away from talks. The collapse exposed a significant disconnect within the Trump administration's trade apparatus, with Lutnick reportedly pulling in a harder line than other parts of the government.