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Photo by Blair Gable/PostmediaMark Carney is doing what no previous Canadian leader has done by accepting that President Donald Trump can impose tariffs despite the terms of the North American trade pact, the country’s former deputy prime minister said.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an Accountor“Canada apparently will have lower tariffs on steel, aluminum, cars and car parts. But tariffs will be in place and Canada will accept the legitimacy of those tariffs. That’s a real Rubicon that it looks like will be crossed,” Chrystia Freeland said on Bloomberg Television’s Wall Street Week With David Westin, to which she is a regular contributor.United States and Canadian negotiators are meeting in Washington on Friday, trying to cement a deal to ease trade tensions between the longtime allies. The stakes are high: the Trump administration is set to impose new 50 per cent tariffs on hundreds of products from Canada at 12:01 a.m. New York time on Saturday, unless there’s a deal or another delay from the White House. Tractor trailers and vehicles cross the Peace Bridge at the Canada-United States border in Fort Erie, Ontario on Aug. 20.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againThe countries are discussing an arrangement that would lower U.S. tariffs on imports of certain Canadian steel and aluminum items to 25 per cent from 50 per cent, and cut the headline duty on autos to 15 per cent, people familiar with the matter told Bloomberg News earlier this week. But the final agreement was not done as of Friday morning and the situation remains fluid.In return, Canada would remove retaliatory measures such as its own counter-tariffs on U.S.-manufactured autos, the people said.“The idea that tariffs on these sectors would be accepted by Canada, that is a really big deal,” said Freeland, who was deeply involved in the negotiations that led to the Canada-U.S.-Mexico-Agreement (CUSMA) during Trump’s first term. “That is a bad outcome for Canada to have permanent tariffs on our steel, aluminum, cars and car parts — really harmful for those sectors. But I think it’s a bad outcome for the United States as well.”Canada has enjoyed decades of trade at near-zero tariffs with the U.S. The two countries exchanged $900 billion of goods and services last year, and Canada is the largest export market for many U.S. industries, including autos. Along with Mexico, the countries are part of CUSMA, which Trump called “the best agreement we’ve ever made” in 2020.Freeland compared U.S. protectionism to Brexit, calling it “self-mutilating” because tariffs on primary metals weaken U.S. manufacturers by increasing their costs.“Aluminum is basically electricity in solid form. So the U.S. is basically imposing a tax on electricity,” she said.Freeland is partly responsible for Carney’s rise to power: in December 2024 she stunned the nation with her sudden resignation as finance minister, which proved to be a final blow that triggered the exit of Justin Trudeau. She ran against Carney for leadership of the Liberal Party and lost.She was part of Carney’s first cabinet but resigned as a lawmaker in January. Spools of steel in the yard at a manufacturing facility in Hamilton, OntarioFreeland suggested Carney is taking less favourable trade terms from Trump in return for reducing business uncertainty, while acknowledging that many Canadians will feel they’re being “treated pretty shoddily.”“The tariffs that had been looming over Canada have been a real Damocles,” she said. “So I think business will be happy with the certainty.”Freeland warned of the risks of the U.S. conducting lopsided diplomacy with allies.“What is happening is, steadily, the U.S. is losing by winning. The U.S. is pushing its allies to do things. It may feel good to force someone to do something they don’t want to do, but I think what the U.S. is going to find is when it needs help, it’s going to be harder to get it,” she said, citing allies’ reluctance to join the war in Iran.—With assistance from David Westin. 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