Canada Faces Tough Choice in Trade Negotiations with U.S.

Canada's Prime Minister Mark Carney is facing a no-win situation in trade negotiations with the U.S., according to Edmonton professor Subhadip Ghosh. The country has little choice but to endure tariff wars until the American midterm elections this autumn, says Ghosh.

Ghosh believes that Canada's decision to walk away from the revised trade deal was the best alternative to a negotiated agreement, as the Americans added terms that would have impacted Canada's ability to sign other trade deals and allowed the U.S. to rip up the agreement at will.

The U.S. felt it had all the leverage in negotiations due to Canada's dependence on trade with them, says Ghosh. Instead of walking back the demands, the Americans are holding out that Canadians will suffer more than they do.

Canada has made some progress in diversifying its economy, but Ghosh notes that the country still has a long way to go before it can't be held hostage by the U.S.