The Trade Zone

What’s in store for Carney & Canada in 2026?

By John Stackhouse

Tariffs don’t take a holiday and we can assume President Donald Trump won’t either.

Trump used his decorative holiday message to the nation this week to portray himself as a Santa Claus of trade:

• Tariffs are one of his great achievements, saying it is bringing record investment to the U.S.

• Tariffs will help pay for the “warrior dividend” to 1.45 million U.S. military personnel.

• Tariffs are leading to lower prices.

We will see later in 2026 (hello, midterms) if Americans agree. But expect the President to charge into 2026 on a tariff high, even if, as expected, the Supreme Court rules that he’s overstepped his powers. How? The White House can quickly rebuild the tariff wall, using Section 122 and 301 powers that would keep tariffs in place, although the expected rate might drop from the current 16% average to perhaps 10%.

Three questions for the New Year:

• Will countries look to retaliate, even with non-tariff barriers?

• Can Congress afford to pass tax cuts and tariff cuts?

• Can Canada afford to play for time?

Mark Carney seems resigned to the “no deal” scenario, and with it a long slog for CUSMA negotiations. The biggest near-term challenges will be around digital services, lumber and rules of origin for auto manufacturers, each with its own economic and political calculus:

• expect the U.S. to continue to push for more concessions for online media, particularly for Meta, which could face blowback in Quebec where cultural protections (including subsidies for local media) will be a red line for an expected Parti Quebecois government in 2026;

• expect the U.S., facing a soft housing market, to continue to hammer B.C. (and New Brunswick) with softwood lumber measures;

• expect Doug Ford to push hard again for favourable access to the U.S. auto market for Ontario assembly plants. 

Canada is not likely to get all three. Which means Carney may spend the holidays thinking through the coal that Santa has in mind for 2026. 

25 numbers that defined ’25

14257: The Executive Order signed by U.S. President Donald Trump on April 2 that imposed a 10% baseline tariff on imports from all U.S. trading partners.

90: Countries slapped with a tariff rate above the baseline 10% on “Liberation Day.”

2: White House visits by Prime Minister Mark Carney. The most recent was in early October during which Trump called Carney a “good man” who is doing “a great job.”

75 million: Dollars spent by Doug Ford’s Ontario government on an anti-tariff ad campaign featuring Ronald Reagan, which prompted Trump to call off negotiations with Canada. Ford claims the ad clocked 12.4 billion views.

US$35 trillion: Estimated value of global goods trade in 2025. Trade volumes hit record highs even as geopolitics fractured supply chains—proof that globalization is rewiring, not retreating.

50,000: Fewer manufacturing jobs in the U.S. since the start of the year.

US$1 trillion: China’s record trade surplus despite tensions with the U.S. Beijing exported US$3.4 trillion worth of goods in the first 11 months of the year by finding, in part, new markets, including Africa (+26%), Southeast Asia (+14%) and Latin America (+7.1%).

5: The industries that accounted for 80%of tariffs the U.S. collected from Canada, namely auto (28.8%), aluminum (23.3%), iron and steel (12.7%), machinery (8.8%), articles of iron and steel (8.3%).

$70 billion: The United Arab Emirates’ investment pledge for Canada, focused on the development of critical minerals, energy, ports and AI.

US$226.4 billion: U.S. exports to Mexico between January and August—surpassing the US$225.6 billion goods shipped to Canada—marking the first time in 30 years Mexico overtook Canada as a top destinations for exports.

$200 billion: The estimated value of the Canadian Mutual Recognition Agreement, which eliminates all barriers to trading goods (except food) between Canadian provinces and territories.

3x: Increase in global trade-restrictive measures since 2019. Tariffs, export controls, and subsidies are now structural features of trade policy—not temporary shocks.

10%: The amount of lumber exports  (enough to build 75,000 homes) that Canada’s forestry industry is planning to re-route from the U.S. to the U.K. and Europe.

100%: U.S. reliance on imports for 16 critical minerals (including graphite), with more than 50% import dependence for another 29, including zinc, cobalt, and nickel.

$600 billion: Canada’s non-U.S. export goal by 2035, as outlined in the 2025 federal budget–doubling the current amount.

$50 billion: The potential value of a trade partnership between Canada and India, which have renewed relations this year.

$100 billion: The annual value of Canada’s agri-food exports. Roughly 60% was destined for U.S. markets.

$994.63: The amount the average family in Canada can expect to pay more in groceries in 2026, compared to 2025. The toll of tariffs is impacting domestic food security, with one in four Canadians experiencing food insecurity.

86: Percentage of goods the U.S. imported from Canada in September that were duty free.

51: Number of days gold prices closed higher than previous all-time highs due to heightened geo-economic uncertainty.

28%: The increase in coffee prices year-over-year.

19%: Decline in Chinese exports to the U.S. this year.

US$244 billion: Total tariff revenues the U.S. has collected (January to November 2025)

1 million bpd: The potential capacity of a West Coast oil export pipeline at the heart of an MoU between the federal government and Alberta that would expand Alberta’s oil exports to Asia.

US$7 billion: The massive hit Michigan’s Big Three automakers—General Motors, Ford and Stellantis—expect on their earnings in 2025 from U.S. tariffs.