Perhaps it was a coincidence. When Prime Minister Mark Carney visited a field of dried mud and gravel in suburban Ottawa to make a housing announcement this week, a shiny excavator was set up as the backdrop. But it wasn\u2019t an American-made Caterpillar or John Deere like those typically found at construction sites around the city. It was a Hitachi, made in Japan. And it was a signal.<\/p>\n
The prime minister\u2019s office didn\u2019t respond to my question about its heavy machinery preferences. But when the speeches finished, Mr. Carney\u2019s news conference immediately veered from affordable housing into Canada-U.S. relations.<\/p>\n
As Ana Swanson, my colleague who covers trade in Washington, and I wrote, this week brought grievances about Canada from several Trump administration officials. They come in advance of an impending review of the trade agreement known here as the Canada United States Mexico Agreement or, as Americans have it, the United States Mexico Canada Agreement.<\/p>\n
[Read: Without Formal Trade Talks, Canada and the U.S. Go Public With Their Grievances<\/a>]<\/p>\n To get a sense of the timetable and possible outcomes of those talks, I spoke with Chad Brown of the Peterson Institute for International Economics<\/a> in Washington. Mr. Brown is a leading expert on trade wars and closely follows Canada\u2019s trade policies.<\/p>\n Our conversation has been edited for length and clarity.<\/p>\n How big a challenge is this review for Canada?<\/p>\n This review was always going to be challenging even if it had been a completely different administration in Washington. The world has fundamentally changed even since the renegotiation of NAFTA. Concern about economic security and China are really driving the negotiations of most everything in Washington when it comes to trade.<\/p>\n There were always going to be difficult conversations with both Canada and Mexico about trying to get better alignment on all sorts of policies that we have never talked about formally aligning on previously \u2014 that includes on things like export controls and foreign investment screening.<\/p>\n Mr. Carney is emphasizing reducing Canada\u2019s dependence on the United States and said this month<\/a> that \u201cmany of our former strengths based on our close ties to America have become our weaknesses.\u201d That doesn\u2019t seem like a promising starting point.<\/p>\n There are things that leaders say publicly, especially when negotiating with the U.S. president, that may be different than what they say in private.<\/p>\n But I agree that it is a very different public negotiating environment between the two countries, between the two leaders, than we\u2019ve seen historically.<\/p>\n On top of all that there is President Trump\u2019s tendency to make deals only to turn around and introduce new tariffs.<\/p>\n It does make it difficult for other countries to be able to make long-lasting, durable concessions \u2014 which is what trade agreements are supposed to be all about. They\u2019re supposed to be about getting to agreements that can create the certainty that businesses need to be able to make longer-term investments.<\/p>\n When he\u2019s reimposing tariffs, the value of the deal disappears, and then the other country\u2019s willingness to negotiate also disappears. It\u2019s just incredibly difficult to negotiate in that kind of environment.<\/p>\n Then how might Canada approach this?<\/p>\n Well, I suppose, do what Canada\u2019s doing.<\/p>\n I\u2019ve interpreted what Prime Minister Carney\u2019s been doing \u2014 trying to integrate more with China or with other trading partners around the world \u2014 as sending a signal to the United States that I do have outside options and you\u2019re going to need to improve the deal that you\u2019re offering to me. Otherwise I can potentially turn it down because I have these other things out there.<\/p>\n The forces of economics just make it very difficult to create economically meaningful alternatives for Canada outside of the United States. But it does appear that Carney is doing as much as he can right to strengthen that part of Canada\u2019s hand.<\/p>\n But why should Canadians expect Mr. Trump to ease off his fortress America approach to trade?<\/p>\n My own view is the North American economy, especially in sectors like automobiles, is really struggling right now to compete with a new entrant, which is China.<\/p>\n The companies operating in North America are very far behind a lot of the Chinese companies. And the only way that they\u2019re going to catch up or leapfrog is if they can make the investments necessary in research and development, in production, in advanced technologies.<\/p>\n A key to that is additional scale. So right now, the United States, as large a market as it is, is small compared to China. The question is going to be, Can the United States and its partners achieve the scale necessary \u2014 whether it\u2019s in autos or semiconductors or A.I. or other industries \u2014 to compete with China, which has 1.4 billion people? Well, we can get there if we get the scale of the United States, Canada, Europe, Japan, Korea, Australia \u2014 all these market-oriented democracies \u2014 working together. But every time we become insular, that works against that goal.<\/p>\n Trans Canada<\/p>\n For the second time in less than a week, an elaborate publicity stunt<\/a> by Drake has created headaches and safety concerns in Toronto, Vjosa Isai reported.<\/p>\n A spring snowstorm brought two highways in Alberta<\/a> to a standstill and left 300 vehicles stranded overnight into Friday as the authorities mobilized to bring their occupants provisions, Rylee Kirk reported.<\/p>\n A Canadian tourist was shot dead<\/a> and several other people were wounded when a man opened fire at one of Mexico\u2019s most popular tourist destinations, the Teotihuac\u00e1n pyramids just outside Mexico City.<\/p>\n A preliminary report by the U.S. National Transportation Safety Board found that LaGuardia Airport\u2019s failure to put communication transponders<\/a> on emergency vehicles played a role in a fatal runway collision between an Air Canada passenger jet from Montreal and an airport fire truck that killed two Canadian pilots.<\/p>\n In a deal facilitated by both Canada and Germany, Cohere, a Canadian A.I. start-up<\/a>, is taking over a German competitor, Aleph Alpha. Adam Satariano reports that the merged company hopes to attract businesses and governments that are leery of relying on American tech firms for artificial intelligence.<\/p>\n The U.S. Supreme Court has rebuffed an attempt by Enbridge Energy,<\/a> the Canadian pipeline company, to move a legal battle over the future of a pipeline Michigan wants to partly decommission to a court seen as more friendly to business interests. The aging pipeline, known as Line 5, delivers oil from Western Canada to Wisconsin and Michigan before reaching refineries in Ontario. A section of it sits on the bottom of the strait that joins Lake Michigan and Lake Huron, leading to fears that a leak could create an environmental catastrophe.<\/p>\n Heidi O\u2019Neill, a former Nike executive, will become the chief executive of Lululemon<\/a>, the Vancouver-based maker of yoga pants. The appointment comes as the company is facing declining sales in North America and is enmeshed in a feud with its founder, Chip Wilson.<\/p>\n Alissa Wilkinson, a Times film critic, has named \u201cBlue Heron,\u201d the debut feature<\/a> of the director Sophy Romvari, who was born in Victoria, an NYT Critic\u2019s Pick.<\/p>\n The Times also reviewed \u201cTwo Women,\u201d<\/a> a French Canadian sex comedy set in Montreal about a pair of neighbors in an eco-friendly co-op building who start sleeping with local handymen.<\/p>\n Ian Austen<\/a> reports on Canada for The Times. A Windsor, Ontario, native now based in Ottawa, he has reported on the country for two decades. He can be reached at austen@nytimes.com<\/a>.<\/p>\n How are we doing?
We\u2019re eager to have your thoughts about this newsletter and events in Canada in general. Please send them to nytcanada@nytimes.com<\/a>.<\/p>\n