These are distressing times for Canadians. Despite numerous meetings between the Canadian and U.S. (and Mexican) delegations over the past year, NAFTA negotiations reached another impasse on Friday, August 31. It is not surprising.

The Americans have negotiated in bad faith. Canada was excluded from the recent negotiations between the U.S. and Mexico. Rather than just negotiate the exchange of auto parts and minimum salaries for auto workers, the two parties reached an agreement on a much more extensive range of issues. Clearly the Americans sought to and succeeded in muscling the Mexicans into agreeing to a 2-way pact with them. The Mexicans were also not forthcoming in advising their Canadian counterparts of their intention to reach a multi-faceted two-party agreement with the Americans.

President Trump is threatening to apply a 25 percent tariff on auto parts manufactured in Canada if he doesn’t receive concessions on access to Canada’s dairy market, on a dispute settlement mechanism and an increase in the level of duty-free purchases. According to a John Holmes, a Queen’s University professor emeritus and research fellow at the Automotive Policy Research Centre (https://www.macleans.ca/economy/what-will-happen-if-trump-slaps-a-25-per-cent-tariff-on-canadian-made-cars/?utm_source=nl&utm_medium=em&utm_campaign=mme_weekly&utm_content=202508&utm_term=0&sfi=df0198bed6a37f0cdd34c52c77052eef ), the impact on Canada would be “disastrous.”

The oddity in applying these tariffs is that American consumers would be the first ones to feel the impact. According to industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants, automakers would pay an extra $5,000-$7,000 for the vehicle they plan to sell. “Unless the auto companies chose to eat some of the extra costs, it would price most of those vehicles out of the marketplace,” DesRosiers says. “There’d be no choice for consumers.” Americans won’t be happy paying thousands extra for a Toyota RAV4 simply because it came from Canada—meaning the nearly 1.8 million vehicles Canada ships south of the border annually would have a much tougher time finding a home.

This week President Trump imposed a 25% tariff on imported steel and a 10% tariff on imported aluminum products from Canada, Mexico, and the European Union. The rationale was that this was done for reasons of National Security. In view of the very modest size of Canada’s military and the longstanding, peaceful relationship between the two countries, this explanation is ludicrous.

We are also being led to believe that the President apparently took these actions to protect jobs in the steel and aluminum industries, to correct what he deems as unfair trade practices by other countries and to bully Canada and Mexico into making concessions on the new NAFTA agreement that has been under negotiation for many months. Again, these are weak reasons to damage the strongest trade relationship between any two nations in the world.

In the case of NAFTA, the most recent sticking point has become the “sunset clause.” Vice President Mike Pence advised Prime Minister Trudeau last week that he'd have to accept this clause, which would make the trade agreement subject to renegotiation every five years. Trudeau said he couldn't accept the terms. The sunset clause is just one sticking point. The U.S. is also seeking changes to the "rules of origin" that govern how much of a car must be manufactured in North American to avoid import taxes in the three countries that make up NAFTA.

As a Canadian businessperson, I have two messages for Prime Minister Trudeau, push back hard against these bullying tactics and hit President Trump where it hurts. As the world has seen, persuasion, charm, diplomacy, and logical reasoning don’t work with this president. The fact is that both French President Macron and German Chancellor Merkel, two long-time allies, went to the White House in recent weeks to reason with him. Their visits appear to have had no impact.