Instead, they proposed a constitutional amendment, which passed both houses in early July, was sent to the states, and by 1913 was ratified as the Sixteenth Amendment. In the conference committee, Taft won some victories, such as limiting the tax on lumber. The conference report passed both houses, and Taft signed it on August 6, 1909. The Payne-Aldrich tariff was immediately controversial. According to Coletta, "Taft had lost the initiative, and the wounds inflicted in the acrid tariff debate never healed".[87]

Newton McConnell cartoon showing Canadian suspicions that Taft and others were only interested in Canada when prosperous
In Taft's annual message sent to Congress in December 1910, he urged a free trade accord with Canada. Britain at that time still handled Canada's foreign relations, and Taft found the British and Canadian governments willing. Many in Canada opposed an accord, fearing the U.S. would dump it when convenient as it had the 1854 Elgin-Marcy Treaty in 1866, and farm and fisheries interests in the United States were also opposed. After talks with Canadian officials in January 1911, Taft had the agreement, which was not a treaty, introduced into Congress and it passed in late July. 