President Donald Trump announced on Thursday that the United States has terminated all trade negotiations with Canada, citing a “fraudulent advertisement” featuring former President Ronald Reagan speaking against tariffs.
In a post on Truth Social, Trump declared:
“Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.”
The move marks a sharp escalation in tensions between Washington and Ottawa, coming just months before the scheduled 2026 review of the United States-Mexico-Canada Agreement (USMCA) — the successor to NAFTA.
Controversy Over ‘Fraudulent’ Reagan Ad
The dispute centers on a political advertisement circulating in Canada that used archival footage of President Ronald Reagan, a Republican icon, criticizing tariffs as harmful to American jobs and global trade.
The ad reportedly caught Trump’s attention earlier this week after it aired in several provinces. Ontario Premier Doug Ford confirmed that the video had made its way to the White House.
“I heard that the president heard our ad. I’m sure he wasn’t too happy,” Ford said on Tuesday.
According to Trump, the ad was “fraudulent” and deliberately designed to mislead the public by misrepresenting Reagan’s legacy and undermining his administration’s trade agenda.
Rising Trade Tensions
The Trump administration has used tariffs as leverage in multiple international trade disputes, including with China, Mexico, and the European Union. Trump has repeatedly defended tariffs as a tool to “protect American workers” and “rebalance unfair trade deals.”
Under his leadership, U.S. tariffs have reached their highest levels since the 1930s, triggering pushback from businesses and economists who warn of rising consumer costs and retaliatory measures from trade partners.
Earlier this year, Trump imposed new tariffs on Canadian steel, aluminum, and automobiles, prompting Ottawa to retaliate with its own levies. For weeks, officials from both sides had been engaged in talks aimed at resolving the dispute, particularly within the steel and aluminum sectors.
Those discussions now appear to have collapsed following Thursday’s announcement.
Ottawa Responds
In response, Canadian Prime Minister Mark Carney said his government would not allow the U.S. to gain “unfair access” to Canadian markets if talks fail to resume.
“Canada will not be intimidated by political theatrics,” Carney told reporters in Ottawa. “If the U.S. chooses to abandon dialogue, we will defend our industries and our workers.”
The diplomatic fallout threatens to further strain the fragile trade relationship between the two countries, which together form one of the world’s largest economic partnerships.
What’s Next for North American Trade
The termination of talks adds uncertainty ahead of the USMCA review scheduled for next year, when the U.S., Canada, and Mexico are set to evaluate and renegotiate terms of the 2020 trade agreement.
Analysts warn that Trump’s move could have far-reaching consequences for supply chains across North America, particularly in manufacturing and energy sectors.
Despite the growing rift, neither side has ruled out the possibility of reopening discussions in the future. But for now, Trump’s declaration effectively freezes one of the most significant bilateral trade relationships in the world.
