As Canada looks to land a new economic and security partnership with the United States within two weeks, there’s bad news for this country: The American economy just keeps humming along. Confused? We’ll dig into how the U.S.’s economic resilience is messing with our hand at the negotiating table, after today’s news:

Politics: Cabinet ministers are being asked to find “ambitious” internal savings ahead of the 2025 budget

Trade: U.S. President Trump threatens higher tariffs on more than a dozen countries, but extends negotiating deadline

Court: Bridging Finance receiver PwC files $1.4-billion lawsuit against ex-auditor Ernst & Young

M&A: Royal Gold launches friendly $5-billion takeovers of Sandstorm Gold, Horizon Copper

• At home, the Ivey Purchasing Managers Index will be released for the month of June, broadly forecasted to rise again.
• In the U.S., consumer credit data will be released as fears of recession set in. In May, Americans slowed down credit card usage.

Good morning, this is Jason Kirby, an economics reporter at The Globe.

In last Friday’s Business Brief dispatch, my colleague, Tim Kiladze, told you about his recent road trip through the roaring economic boom of the U.S. southeast – in particular, North Carolina, South Carolina and Georgia.

Powered by lower costs, strong job growth and solid “vibes,” the region’s good fortunes have provide a buffer against disruption that Trump’s immigration and trade war policies are inflicting in other parts of the U.S.

It’s one of the ways the American economy has defied the low expectations that accompanied Trump’s first few months in office.

What’s going right (for Trump, at least)

• Jobs: As Trump launched his trade war with Canada and Mexico, and then the rest of the world, economists warned uncertainty would force American companies to retrench. Instead, businesses have kept on hiring. In the first half of the year, the U.S. added 1.2 per cent more jobs than during the same period in 2024.
• Inflation: Stop me if you’ve heard this one (by me, for one ) – Trump’s tariffs are a tax on American consumers and will cost middle-class households US$1,200 more this year in higher prices. Except, so far, U.S. inflation has remained muted. Yes, tacos have a lot to do with that. Trump has repeatedly back peddled on the most outlandish tariffs and punted deadlines, like he did again Monday when he ratcheted up his trade threats but extended the pause on his “Liberation day” tariffs to Aug. 1. It still means consumers have yet to really feel much tariff bite at the check out counter.
• Investment : Trump has boasted about the influx of mega-investment deals flowing into his country. Whether those claims translate into actual factories or fizzle out like they often did during his first term, business investment has powered on by one important metric. The number of new business applications is on track to hit an all-time high, a sign American entrepreneurialism is alive and well.

What’s going wrong (for Canada’s bargaining position)

This is all really not very good news for Canada, which is an odd way to think about things. Traditionally, when the giant U.S. economy does well, the momentum pulls its junior partner to the north along.

However, these aren’t normal times. And it’s not just because Canada is being hit disproportionately hard hit by U.S. tariffs.

From the outset of the trade war, Canada’s response was one-part counter tariffs, one-part support programs for impacted workers and one-part waiting for Trump to shoot off Uncle Sam’s foot.

In short, Canada was counting on Trump’s tariffs to deliver some measure of pain to American consumers by this point.

Angry consumers and corporate leaders, the thinking went, would complain to their local and state leaders (especially the Republican ones) who would then pressure Washington to come to its senses.

But if the U.S. economy keeps chugging along, that urgency goes away, as does a chunk of our soft-power leverage in talks with the Trump administration

Damage delayed

America’s economic resilience in the face of Trump’s policy chaos is a slightly-comforting reminder of the limit of any president’s ability to deep-six the economy.

Presidents (and yes, prime ministers) excel at presenting themselves as helmsmen of their economies, quick to claim credit when times are good. Likewise, critics will readily lay blame for quarterly shortfalls in economic and job growth numbers.