Good morning. Canada’s trade negotiating team was still hunkered down in Washington on Monday, while yet another tariff mediation took place. Let’s catch up on where things are at (and where they might go) before tomorrow’s deadline.

Auto: The Canadian auto industry is making grim calculations – what level of tariff can it absorb without being forced to idle more auto plants?

Energy: Quebec and Newfoundland and Labrador have salvaged a deal to jointly develop untapped hydroelectric resources on the Churchill River. But the revised deal comes with a major caveat, writes Konrad Yakabuski.

Economy: Gas prices drove inflation up to 3 per cent in July as food-cost pressures eased, just a tick above economists’ expectations.

Hi, I’m Jameson Berkow, capital markets reporter for The Globe.

No matter what happens today, I will be enjoying corn tortillas filled with some delightfully seasoned chicken, onions, pineapple and cilantro.

But I will be eating them with my fingers crossed (yes, it’ll be a mess) that today also marks the latest time that Trump Always Chickens Out.

Today is the last day before the mercurial U.S. President has promised to slap potentially devastating 50-per-cent tariffs on US$20-billion worth of Canadian exports to the United States. Canadian negotiators have given up their weekends in an effort to hammer out an agreement that would avoid such steep levies and Prime Minister Mark Carney is planning to make a personal appeal directly to Trump ahead of the deadline.

At the moment, however, both sides remain far apart on multiple issues. That means the best chance Canada has of avoiding the worst case scenario is to just wait for Trump to blink.

Anthony Scaramucci, a longtime Trump confidante and one-time Trump staffer known as “the Mooch,” predicted another TACO on the tariff threat against Canada based on the pressure Trump faces from hordes of American CEOs who have come to rely on an integrated North American economy.

Another sign that Trump would lose his nerve is because he has done it so many (many!) times already. More than a year ago, in July, 2025, Forbes Magazine had already catalogued 28 tariff flip-flops from the Trump White House.

Needless to say, there have been numerous TACO moments in the ensuing months. So many, in fact, that some investors have adopted a TACO-trade playbook where they buy stocks hit by a Trump tariff threat and sell them for a tidy profit after he inevitably backs down.

Trump even used the exact same threat now facing Canada – a 50 per cent tariff on a wide array of goods – against the European Union in mid-2025. The European TACO moment came just two days later when Trump offered a five-week delay to buy time for negotiations, but even that deadline eventually came and went without any sweeping tariffs taking effect.

And remember when he refused to rule out invading Greenland in order to annex the autonomous Danish territory? Me neither.

None of this is to say Canada shouldn’t be taking these threats seriously. There is always the non-zero chance that Trump keeps his word and expends significant political capital to punish America’s closest trading partner for perceived slights.

Yet if history is any guide, Canadians can expect to enjoy a tasty trade deal.

Analysts say that a rise in Japanese government bond yields, and the related shifting makeup of foreign holders of U.S. government debt, could have a far-reaching impact with implications for Canadian investors.