Every negotiation assumes that both sides will honour what they agreed to, or that someone else — a court, a regulator, a contracting authority — can compel them to make good on their commitments. That assumption breaks down more often than we’d like: an employer who reneges on a deal, a supplier who renegotiates after every delivery, a government that reopens a signed agreement.

The challenge grows when the unreliable partner is indispensable — someone you cannot compel but must do business with.

Canadian Prime Minister Mark Carney is facing exactly this situation in his relationship with United States President Donald Trump. The U.S., Canada’s main trading partner, is indispensable but the rules of the game have become much less predictable. Even though the the Canada-U.S.-Mexico (CUSMA) trade deal is already in force, Trump imposed new tariffs on Canadian goods.

Negotiations on those new tariffs broke down even though both sides appeared to be close to a deal. According to Canadian negotiators, the Trump administration presented additional conditions at the very end of the talks. The Canadian government suspended the talks rather than accept the proposed terms.

Read more: Mark Carney’s defiance: Canada shows the world how to respond to Donald Trump’s threats

When trust disappears

This raises a direct question for Canada: why enter into an agreement if there’s a sense the other party could go back on its word at any moment?

This situation also arises in other sectors and situations. How can a company manage a dispute when it depends on a dominant supplier? How can a parent negotiate a curfew with a defiant teenager?

When faced with such unreliable negotiators, our instinctive reaction tends to be a moral one: “He lacks credibility,” “It’s hard to trust him,” or “He’s negotiating in bad faith.” These judgments may be fair, but........

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