(A)Political - October 25th

Good morning everyone,

My dollar is worth less while the government can’t even function. Let’s find out why!

After an anti-tariff ad aired in Canada, Trump decides to kill talks with PM Carney. The US debt has officially climbed to $38 Trillion, beating a record pace. Pentagon accepts nine figure gift to assist with payroll.

• Trump Ends Trade Talks With Canada

• US Debt Climbs To $38 Trillion Dollars, Was $37 Trillion In August

• Department of War Accepts Anonymous $130 Million Dollar Gift To Keep Pentagon Running

Trump Ends Trade Talks With Canada

_{By: Atlas}

President Donald Trump ended trade negotiations with Canada on Thursday, announcing the move publicly and directing U.S. officials to halt scheduled sessions. The stated trigger was a Canadian advertisement—funded by Ontario’s government—that incorporated audio from a 1987 Ronald Reagan address to argue against tariffs.

The White House framed the ad as misleading and said it underscored broader concerns about the tenor of Canadian engagement at the table. In administration statements, the decision was described as a pause with no set timeline for resumption, pending “changed circumstances” and greater alignment on core issues such as tariff authority, sector carve-outs, and enforcement triggers. The President also linked the decision to ongoing litigation over his tariff program, arguing that the ad campaign risked politicizing a pending Supreme Court case on executive power to impose duties.

Immediate reactions in Washington and Ottawa

Within hours, U.S. economic officials said the breakdown reflected cumulative frustrations rather than a single incident. They pointed to months of uneven progress on steel, aluminum, autos, and selected industrial inputs, and to Canadian requests for wider exemptions than the U.S. side was prepared to consider. At the same time, officials left open the possibility of technical contacts to maintain existing licensing and exclusion processes so that companies would not face abrupt changes while talks were suspended.

In Canada, Prime Minister Mark Carney said Ottawa remained ready to reconvene when the United States was willing to proceed and noted that negotiators had produced sector-by-sector draft text on several chapters. The Ontario government, whose ad became a flashpoint, said it would suspend the campaign after the weekend to reduce political friction, while defending the message as a debate over the costs of tariffs. Business associations on both sides of the border urged the parties to keep administrative channels open for existing exclusions, arguing that uncertainty, rather than tariffs alone, was the immediate operational challenge for manufacturers and shippers.

Negotiating context and legal backdrop

The rupture came against a backdrop of elevated U.S. tariffs and an approaching Supreme Court argument over the scope of presidential authority to levy duties on national security and economic grounds. In parallel, U.S. trade officials have pursued discrete arrangements with Mexico and other partners—an approach intended to keep regional supply chains moving even if trilateral talks stall. Canada sought to use the 2025 talks to stabilize costs for exporters and to define predictable remission quotas and exclusions in autos, metals, and energy-related equipment. Ottawa had pared back some countermeasures earlier in the autumn to create room for progress, while pressing Washington for a durable mechanism to shield integrated North American sectors from unpredictable rate changes.

The U.S. side insisted that any carve-outs fit within the broader tariff architecture and be coupled with enforcement provisions that allow swift re-imposition if trade is diverted. Both teams had also been preparing for the scheduled review of the U.S.–Mexico–Canada Agreement (USMCA) in 2026, a process that would proceed on a separate track but could be influenced by the outcome of the suspended talks. Legal clarity from the Supreme Court—whenever issued—will shape the next phase: a decision upholding broad executive latitude would strengthen Washington’s leverage, while a narrower reading could push both sides toward codified relief mechanisms inside treaty frameworks rather than ad-hoc exclusions.

Economic exposure and sector impacts

Canada remains highly exposed to U.S. demand, with a large majority of its exports bound for American customers and tightly integrated cross-border supply chains in autos, agriculture, energy, and machinery. Even without new measures, a prolonged pause freezes work on technical templates that companies had been counting on to reduce duty incidence. Automakers were watching for remission quotas on specific models and components; steel and aluminum producers had proposed exclusion criteria tied to alloy specifications and domestic capacity; energy firms had lobbied for predictable treatment of equipment and certain refined products moving in both directions. On the U.S. side, the administration emphasized the leverage and revenue benefits of the tariff regime and characterized sector deals as available when partners align with U.S. terms.

For U.S. manufacturers that source inputs from Canada, the near-term focus is whether current exclusion letters and license renewals continue uninterrupted; for Canadian suppliers, the issue is how to price contracts that assumed forthcoming relief. Logistics providers report that routing and inventory strategies are being adjusted to hedge against longer duty exposure, with some shippers advancing orders or diversifying suppliers to manage cost volatility. Currency moves added another layer: a weaker Canadian dollar cushions some exporters in the short run but complicates purchases of U.S. inputs. Financial analysts noted that, while headline tariffs tend to dominate attention, administrative predictability—regular renewal cycles, clear documentation standards, and stable processing times—often does more to anchor investment decisions than any single rate change.

What to watch next

Several developments will determine whether the interruption becomes a reset or a protracted freeze. First, watch for a formal administrative notice from the United States clarifying the status of existing tariff exclusions and licensing; continuity on those instruments would limit near-term disruption even without negotiations. Second, Ontario’s suspension of the advertisement removes the proximate trigger; if U.S. officials signal that this lowers the temperature, working-level conversations could restart quietly to preserve technical progress already made on metals and autos. Third, the Supreme Court timetable matters.

A decision that clarifies tariff authority will influence both sides’ assessments of risk and leverage and could provide a natural moment to resume talks with a recalibrated mandate. Fourth, the U.S. pursuit of bilateral or sectoral arrangements with Mexico will affect Canadian firms if supply chains re-optimize around rules or quotas that exclude Canadian inputs; Ottawa will weigh whether to adjust its own measures or accelerate diversification to manage that risk. Finally, the USMCA’s 2026 review window will continue to loom. If technical fixes cannot be secured in the suspended talks, both governments may seek to embed more durable solutions in the review, trading short-term uncertainty for a chance at longer-term stability.

Taken together, the decision to end talks halts a process that had produced draft sector text but not the political alignment needed to finalize it. The United States is signaling that it will rely on the existing tariff framework, pursue selective deals elsewhere, and await legal clarity before re-engaging. Canada is signaling that it remains prepared to negotiate, that it has already adjusted some countermeasures, and that it wants predictable relief for integrated sectors.

Between those positions lies a narrow path: maintain administrative continuity so businesses can plan, keep technical files intact so they can be revived quickly, and use forthcoming legal and treaty milestones to reset the mandate. Whether the two sides take that path will be evident in the next set of administrative notices, the handling of existing exclusions, and any quiet reappearance of staff-level sessions aimed at salvaging the work already done.

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