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What Iran Can Teach Canada about Negotiating with Trump

Know your leverage, stay patient, don’t fold too early

The memorandum of understanding United States president Donald Trump cobbled together with Iran’s leadership may seem far removed from Canada’s negotiations over the future of the Canada–United States–Mexico Agreement, or CUSMA.

However, the Iran deal, hastily concluded under intense economic pressure, offers three clear lessons for Ottawa: know your leverage, understand what truly frightens Trump, and resist the urge to fold too early.

On paper, Iran and Canada both appear to be junior negotiating partners facing a far more powerful United States. In practice, each holds cards that Washington cannot ignore.

For Iran, its Trump card (to adapt the president’s favourite negotiating metaphor) was its control over the Strait of Hormuz, a critical choke point for global oil shipments. By closing the strait, Tehran pushed energy prices sharply higher and roiled global markets. The memorandum’s core trade-off reflects that reality.

Iran ceases to threaten shipping in the strait. In return, the United States lifts its naval blockade and offers sanctions relief and reconstruction funds. Why? Because the US cannot afford a prolonged squeeze on oil.

Canada’s leverage in the CUSMA negotiations is different but no less substantial. It lies in our critical role as a supplier of intermediate goods and commodities to the US economy.

Canadian steel and aluminum are embedded in American cars, airplanes, missiles, beer cans, and nearly everything else that requires these inputs. Canadian crude feeds US refineries. Canadian electricity keeps the lights on in New York and other regions that depend on cross-border power flows. Canadian potash underpins North American food production.

When Trump slaps tariffs on these inputs, he is not outsmarting Ottawa. He is........

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