In U.S.-Canada trade war, Trump says they are ‘the worst’ and Canada’s top trade envoy tells him to ‘kiss my ass’
Fortune · C · trust 41/100
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The rhetoric in the U.S.-Canada trade war is extreme: “They are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!”, President Trump said yesterday on social media . “Someone should get these clowns to 'fall in line' or, the consequences for Canada will be far WORSE!”, he added later .
The language on the Canadian side has been pretty spicy too. “He has a lot of room to kiss my ass,” Ontario Premier Doug Ford said on Monday, referring to Trump.
Canadian Prime Minister Mark Carney, of course, has been feisty in defense of his nation—more so than his European counterparts. His political popularity at home is partially driven by the fact that he has stood up to the White House’s never-ending tariff demands. “We cannot accept what they have offered, and we will not give what they have asked,” he said when trade negotiations collapsed.
The New York Times has a must-read account of how the talks foundered. Here’s one detail that shows just how far apart the two sides are: Canada declined to end a ban on the sale of U.S. alcohol in Canada, and the U.S. in turn refused to lower tariffs on automobiles made in Canada to a level that would allow the Canadian auto business to remain sustainable.
Experts believe 90,000 jobs could be lost in Canada if the two sides cannot reach an agreement by January 1, the deadline Trump has set for his new tariffs to kick in.
U.S. Treasury Secretary Scott Bessent announced “Operation Economic Outcast” yesterday, which he described as an intense barrage of economic sanctions against Iran that would set the stage for “regime collapse” in Tehran.
The sanctions will punish any country that does business with Iran, particularly in the areas of digital assets, technology, gold, aviation, and shipping, per the WSJ . The Treasury Department has “mapped every node, every facilitator and every network that Iran has used to smuggle oil and evade sanctions,” Bessent said.
But his speech pointedly did not contain two crucial words: “China” and “Russia.” China is Iran’s biggest trade partner and buys 90% of Iran’s oil. Russia is a more minor partner, but has provided military assistance to Iran during the conflict. Here are the countries that will be most affected:
Traders seem to be shrugging off the drama around Iran and Canada this morning. With Bessent giving few details on how his new sanctions against Iran will work—beyond a new list of 60 Iran-linked entities or individuals—and Trump’s threatened tariffs against Canada not arriving until January, investors seem to be assuming that cooler heads will eventually prevail. The price of oil declined below $90 per barrel and stocks in Asia and Europe largely rose. U.S. futures were up before the bell in New York after the S&P 500 closed down yesterday.
Bitcoin is the talk of the town this week: It’s up 25% over the past month after Trump called for Congress to pass the Digital Asset Market Clarity Act.
Nvidia reports its Q2 FY2027 earnings tomorrow, an event that is likely to move the entire market—just maybe not for Nvidia. Wedbush’s Matt Bryson pointed out in a note this week that everyone is, again, expecting Nvidia to deliver stellar results by exceeding its prior guidance, as it did over the last three quarters. The company is constrained only by its ability to obtain enough components; demand far exceeds its capacity to supply. But as of today, the stock has been on a round trip: 10 months ago it traded at a peak of $207, right now it’s at $208. “NVDA has consistently exceeded consensus (and we believe delivered to buy side expectations), yet the stock is roughly unchanged from October of last year,” Bryson said in an email.
The S&P 500 has risen 12% year-to-date but, somehow, that has made it cheaper than the numbers would suggest, according to Ed Yardeni and Toby Hearst of Yardeni Research. “S&P 500 forward earnings has risen twice as fast as the S&P 500 stock price index so far this year. So the forward P/E has declined as the index rose to record highs,” they said in a recent email. “Investors are getting more earnings for their money than they were eight months ago.”
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