Last night President Trump terminated all trade discussions with Canada following the government of Canada running a false political ad in the USA, using manipulated Ronald Reagan remarks against U.S tariffs.

Earlier today Canadian Prime Minister Mark Carney spoke about the issue to his assembled stenographers in media, and shortly thereafter he had a phone call with Ontario Premier Doug Ford.  Carney and Ford decided to run the ad during the World Series and then stop it on Monday.

It would be illegal for the USA government to run an ad in Canada.  The Canadian government does not permit foreign interests to express political opinions against their domestic policies on their controlled broadcasting operations.

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BREAKING: “Our intention was always to initiate a conversation about the kind of economy that Americans want to build and the impact of tariffs on workers and businesses. We’ve achieved our goal, having reached U.S. audiences at the highest levels.

I’ve directed my team to keep putting our message in front of Americans over the weekend so that we can air our commercial during the first two World Series games.

In speaking with Prime Minister Carney, Ontario will pause its U.S. advertising campaign effective Monday so that trade talks can resume.

The people elected our government to protect Ontario—our workers, businesses, families and communities. That’s exactly what I’m doing. Like I said earlier today: Canada and the U.S. are neighbours, friends and allies.

We’re so much stronger when we work together. Let’s work together to build Fortress Am-Can and make our two countries stronger, more prosperous and more secure.”  ~ Ontario Premier Doug Ford

U.S-Canada trade negotiations remain terminated.  I strongly support a full U.S-Canada border shutdown, trade embargo and visa revocation. The Canadian economy must be destroyed in order to protect the USA and Mexico from toxic leftism.

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White House Chair of the National Economic Council (NEC), Kevin Hassett, walked out to the press pool to discuss the latest excellent inflation figures from the Bureau of Labor Statistics today {BLS REPORT HERE}.  However, the insufferable press pool wanted to talk about other things.

I’ll get to the BLS data below – with a gold nugget just for you, don’t share it.  But first, NEC Director Hassett also let something slip in his responsive comments that most will miss.

When asked about Trump’s decision to terminate all trade negotiations with Canada, Hasset noted the discussions were frustrating, and “The Canadians were very difficult to negotiate with.” Then comes the key point (03:28), “The fact that we are now negotiating with Mexico, separately, reveals that it’s not just one add, there’s frustration that has built up.”

What Hassett just confirmed again, as if we needed more evidence, is that the trilateral trade agreement -the USMCA- is not going to exist once Trump opens it up for renegotiation.  The USA team is already working on a separate bilateral trade agreement between the USA and Mexico, proactively.  The USMCA is dead – we just have not made it official yet.  WATCH (prompted):

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On the inflation data, the September inflation rate was 0.3 percent, much lower than all economists and pundits predicted.  The tariffs are having no impact on the rise of consumer prices.  In fact, the sectors with the most imported goods are the sectors with the lowest inflation.

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President Trump makes a statement from his Truth Social account that all trade negotiations with Canada are immediately terminated following the Canadian government purchasing ads to lie to the American people about tariffs.

PRESIDENT TRUMP – “The Ronald Reagan Foundation has just announced that Canada has fraudulently used an advertisement, which is FAKE, featuring Ronald Reagan speaking negatively about Tariffs. The ad was for $75,000,000. They only did this to interfere with the decision of the U.S. Supreme Court, and other courts. TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A. Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED. Thank you for your attention to this matter!” President DJT

At first review this might seem like an angered response to a fabrication by the Canadian government of Prime Minister Mark Carney. However, there is much more to this background story as CTH readers are well aware.

First, rather than make any substantive policy changes, Canada is organizing a new trade relationship with China as an offset to the trade conflict with President Trump. {GO DEEP} This will make Canada a dumping ground for cheap Chinese goods, which then becomes a problem for the U.S.

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Having provided deliberate advice and counsel quietly on these matters, it is important to continue watching the developments as they unfold.  There are trillions at stake.

President Trump’s global trade and economic reset is well underway. It is not an overstatement to say the western world economic structures within trade, banking and finance are in opposition to his efforts.  Alas, as we have outlined extensively, part of the larger phase of this reset will come in the likely dissolution of the U.S. Mexico, Canada trade agreement (USMCA).

Canada is taking actions to replace their U.S. trade relationship by aligning more with the EU and China.  This is a very dangerous approach for the Canadian people, because in the short-term there may be benefits; however, in the longer term the downsides are quite severe. Remember, Xi Jinping wanted Mark Carney to win the parliamentary election.

[SOURCE] – Canadian Foreign Minister’s visit to China promotes the warming of relations and new opportunities for educational cooperation! This is the most high-level contact between the two countries since 2018.

Canadian Foreign Minister Anita Anand paid an official visit to Beijing and held important talks with Chinese Foreign Minister Wang Yi.

The visit not only commemorates the 55th anniversary of the establishment of diplomatic relations between Canada and China, but also marks the 20th anniversary of the establishment of the strategic partnership between the two countries. During the meeting, the two sides discussed issues such as trade, energy, environment and public health, laying the foundation for the “normalization” of Canada-China relations.

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Put this in the ‘beyond ridiculous’ file that explains the current situation of a contracting European economy; specifically, in the auto sector.

Europe has fines associated with the production of gasoline powered engines if the auto company doesn’t hit targets for sales of electric vehicles.  The fines triggered this year.  In order to avoid paying the European fines the auto makers are forming alliances with Chinese EV makers to purchase carbon credit offsets.

In essence, EU car companies buy Chinese car company carbon credits, to avoid the EU fines.  The Chinese car companies can then use the carbon credit revenue to subsidize lower priced Chinese EVs to the European car market, thereby undercutting the European EV car companies.  BRILLIANT!

MILAN, Oct 21 (Reuters) – Automakers have formed alliances to help them avoid hefty European Union fines on carbon emissions by purchasing credits from electric vehicle companies. Several legacy automakers face potential fines as the transition to EVs in Europe has proved slower than expected in recent years.

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Underpinning the contracting EU economy are two major forces.  First, the instability of their financial markets, thanks in majority to their catastrophic Build Back Better energy agenda.  Secondly, China exploiting the economic vulnerability and dumping massive amounts of cheap goods onto their consumer market.  Both forces are working against the EU economy.

To backstop the collapse, the EU is counting on expanded militaristic spending to get them out of their dead-end path.  Again, in majority, the economics of the thing is why they want expanded war with Russia – regardless of the detrimental outcome.  Without war they have to give up their Build Back Better green energy program.

In this interview, EU Central Bank President Christine Lagarde obfuscates both issues and points a finger at President Trump’s geopolitical economic and trade reset.  The only thing she accurately presents is the scale of the issue, the “trillions at stake” part.  WATCH (Transcript Below):

[Transcript] – MARGARET BRENNAN: We’re joined now by the President of the European Central Bank, Christine Lagarde. The ECB sets interest rates for many countries in the European Union, which is America’s largest trading partner. Good to have you here.

CHRISTINE LAGARDE: Lovely to be back, Margaret.

MARGARET BRENNAN: From where you sit, how would you describe the state of the global economy?

CHRISTINE LAGARDE: In transformation.

MARGARET BRENNAN: Transformation.

CHRISTINE LAGARDE: Transformation, I think caused by a couple of things. One is the tariffs, which have changed the map of trade around the world and reconstituted new alliances and reformed the way in which we trade with each other. I think the second major transformation is the impact of artificial intelligence on everything we do from data management to dating and everything in between.

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In Canada they call the USMCA trade agreement “CUSMA” putting Canada first.  President Trump calls it the USMCA because that’s the order of sequence when the trade negotiations took place, the USA then came Mexico and much later, Canada.  However, Trudeau used his typical Alinsky gaslighting to pretend Canada was always participating; they were not, they came in at the end.

That said, the former NAFTA trade negotiator for Canada, John Weekes, has finally realized President Trump does not intend to renew or renegotiate the USMCA, he intends to dissolve it in favor of two bilateral free trade agreements; one with Mexico and one with Canada.

I’m not sure what finally, and I do mean FINALLY, triggered a Canadian to realize this, but perhaps they finally listened to President Trump telling Canadian Prime Minister Mark Carney [IN MAY] he intends to end it. DUH!  WATCH:

The reality of the U.S-Canada economic relationship and the position of President Donald Trump is not that difficult to understand if you take all the disparate datapoints and quotes from Trump and put them into context.

During a White House meeting with Mark Carney, President Trump essentially told the Canadian Prime Minister why he was in no hurry to get to a deal with Canada.  The 35% tariffs on non-USMCA goods triggered August 1st because the main priority of Trump -looking toward Canada- is to dissolve the USMCA.

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Canadian Prime Minister Mark Carney travels to the U.S. for a White House meeting with President Trump.  The two leaders hold a press availability prior to entering negotiations.  WATCH:

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There are going to be two major stories in 2026 that we will have full context to understand.  Yes, the 2026 midterm politics are going to lead the headlines, but two other issues will have considerable impact.

The first, is the FISA (702) reauthorization, and there is a lot that will surface in the next several months likely to upend the best laid plans of the administrative UniParty [Tulsi Factor].  The second, is the USMCA reauthorization – the end of the trilateral trade agreement, and the structural shift into two separate free trade agreements.

As to the latter issue, while Mexico and Canada are currently in a state of economic flux, only Mexico is preparing to deal with the seismic shift that is about to unfold.  Canada is going to be caught completely off guard.

While Canadian Prime Minister Mark Carney is trotting around Europe trying to establish his relevance amid the pro-Ukraine coalition,  Mexican President Claudia Sheinbaum is spending time focused on her domestic economy.

Mexico is preparing to drop significant tariffs on Chinese imports, a proactive move to position Mexico in advance of the upcoming bilateral discussion.

Sheinbaum knows that right now for every deportation ICE executes, her economy is hit as remittances recede. Simultaneously, for every mile of border wall that is completed, the financial dependency model increases.  President Trump’s leverage in the upcoming bilateral trade negotiation against Mexico increases each day, week and month.

Claudia Sheinbaum is smartly focused on trying to get ahead of the issues, while Mark Carney ignores his vulnerability and is about to make Canada naked to the economic weaknesses created by Justin Trudeau.

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From an initial report of 3.0% to a revised report of 3.3% second quarter growth. [BEA report HERE]  Not a surprise, when we factor in the prediction we presented after the first quarter GDP.

However, it is nice to see the BEA finally admit, “The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP.”  I digress.

WASHINGTON (AP) — The U.S. economy rebounded this spring from a first-quarter downturn due to fallout from President Donald Trump’s trade wars.

In an upgrade from its first estimate in July, the Commerce Department said Thursday that U.S. gross domestic product — the nation’s output of goods and services — expanded at a 3.3% annual pace from April through June after shrinking 0.5% in the first three months of 2025. The department had initially estimated second-quarter growth at 3%.

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