Trump suddenly spoke on social media, saying he would end all trade talks with Canada.
The reason is straightforward: the Canadian Ontario government made a TV advertisement that used Ronald Reagan to criticize tariffs, Trump said it was "bad behavior", and accused the advertisement of "fraudulent false content", aimed at interfering with the US court's ruling on his tariff legitimacy.
This incident came a bit suddenly. Two weeks ago, Canadian Prime Minister Mark Carney had gone to the White House for talks. At that time, there were clearly many positive signs, and everyone thought that progress was about to be made. In the end, the negotiations were stopped because of an advertisement.
And on the White House side, journalists want to ask for details, and people do not respond, this attitude is also strong enough.
Reagan's advertisement became the "fuse"
Let’s talk about this annoying advertisement, it was made for money in Ontario, and Governor Doug Ford Earlier said in a speech in Toronto this month that to invest in advertising on the major U.S. television networks, it spent $53 million, in exchange for RMB 3,9 billion.
Advertising material was used for the recording of Reagan’s 1987 radio speech, in which Reagan said tariffs looked like patriotism, would long-term undermine American workers and consumers, and could trigger a trade war and people lost their jobs.
Reagan has great influence in the Republican Party and has always been a supporter of free trade. In his words, he wanted to highlight that the Republican Party used to support free trade. Now that Trump engages in tariffs, it is actually a departure from the party's tradition.
Originally, I wanted to put pressure on Trump by this trick, but I didn't want to stop the negotiations directly, which also attracted dissatisfaction from the Reagan Foundation.
The Reagan Foundation also issued a statement Thursday night, saying the ad misinterpreted Reagan's original speech and that Ontario had not received a license to use it and was now evaluating whether to go through legal process.
Later I went to Reagan's Presidential Library's YouTube channel to find the original recording, and found that Reagan was really focusing on supporting free trade and only raising tariffs on Japanese semiconductors as an "exception," not to say all tariffs are not.
Looking at it in this way, Ontario is indeed taking it out of context, and it is no wonder that the foundation wants to crack down on counterfeiting.
However, backwards, the trade friction of the United States is not a day or two, this advertisement is mostly a "fireplace", the real contradiction has long been buried in front of it.
Trump just took office at the time, saying that Canada had drug smuggling, tariffs on Canadian goods, and later exempted goods in line with the Mexican Agreement, and the policy changed.
Later, he added tariffs on automobiles, steel, aluminum, wood, and Canada’s main exports, all on the grounds that he “maintains the national security of the United States.”
Especially for steel and aluminum, tariffs of up to 50 percent are unbearable in Canada.
The two sides had been talking about how to reduce this part of the tariff before, but now that the negotiations have stopped, the matter has to be shelved again.
More importantly, the Mexican Agreement, according to the law, to re-negotiate and review in 2026, is now broken, and in 2026 the matter will be worse.
Moreover, U.S. Secretary of Commerce Howard Lutnick also proposed to split the three-nation agreement into two bilateral agreements. Although Trump didn't explicitly support it, he didn't oppose it. If it was really broken down, Canada's situation would be even more difficult.
Automotive industry injured.
Negotiations stopped, and the local industry was the most affected, with Ontario in the first place.
Ontario is Canada’s most populous province, and the automotive industry is the pillar industry, with 80% of the country’s cars being made here.
As a result, this month Stellantis and General Motors directly announced that they would scale back their car-building plans in Ontario.
Obviously, this is all caused by Trump's tariffs. As the cost of car companies has increased, they can only cut production capacity.
The wave is said to shrink to make Ontario slightly fewer than 5,000 direct jobs, and the upstream downstream combined more than 20,000 jobs.
The local workers are probably the most knowledgeable. They had a good job but suddenly became unstable.
It's no wonder that Governor Ford is in a hurry and has been urging the Canadian federal government to be tough on the United States, saying that if it doesn't, it will restrict energy and mineral exports to counter-measure.
After all, Canada's crude oil supplies to the United States account for nearly half of the United States 'imports, and key minerals also account for a large number. If it is really restricted, the United States' new energy industry and energy supply will also be affected.
But the counter-reaction also involves internal problems of the US Republican Party.
It was thought that the Republican attitude toward free trade was a piece of iron, and it was later discovered that after Trump was elected in 2016, this idea was almost broken down.
Reagan pushed free trade as the core policy at the time, and now Trump engages in protectionism, and also accelerates the Republican deviation from this direction.
Ontario's use of Reagan for advertising actually hit this pain point.
Earlier, according to a poll conducted by The Hill of Congress, 45 percent of Republicans voted in favour of free trade and 51 percent in favour of protectionism.
This shows that there have been differences within the Republican Party on trade policy for a long time. Now, with this advertising incident, the differences are probably even more obvious.
In the future, Trump wants to promote the tariff policy, and the voice of opposition within the party is estimated to be even louder.
There is no doubt that Trump's termination of negotiations was ostensibly caused by advertising, but in fact it was a concentrated outbreak of long-standing trade feud between the United States and Canada and ideological conflicts within the Republican Party.
In the short term, the Ontario automotive industry will lose jobs, U.S. car companies may face shortages of parts, and consumer costs on car purchases will rise.
In the long run, the 2026 US-Mexico-Canada Agreement review and the stability of North American supply chains will both be affected.
The global economic recovery is already slow now. As the major economies in North America, the United States and Canada will not benefit anyone if this continues.
If the two sides fail to sit down and talk as soon as possible and rely on each other to exert pressure and counterattack, they will only end up losing both sides.
After all, trade cooperation is a win-win thing, engaging in protectionism and stopping negotiations is really not a wise move.