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On November 25, Donald Trump posted on social media warning Canada and Mexico that he planned to impose a 25 percent tariff on imports from both countries «until drugs, especially fentanyl, and illegal aliens stop invading our country!» The air was suddenly thick with the scent of a two-front trade war.
The next day, at an expanded meeting of Canada’s cabinet with the leaders of the country’s ten provinces, it was decided to develop countermeasures. «Rather than panic, we are taking constructive steps, as we have in the past, to protect jobs», Prime Minister Justin Trudeau said under the vaulted ceilings of Parliament. He added, «Nobody wants a war with the United States». Soon after, as American journalists snickered, he went to Donald Trump’s Mar-a-Lago estate to «bend the knee».
Canadian politicians, whom one wit called «just boring Swedes», held what amounted to a ritual meeting and vowed to strike back at the Trumpists. Pierre Poilievre, leader of the Conservative Party, responded that Trump was «making unwarranted threats against our already weak and shrinking economy». Jagmeet Singh, leader of the New Democratic Party, urged Trudeau to «fight like hell» instead of burying his «head in the sand».
Canadian officials are trying to improve their chances in likely upcoming negotiations with the Trump administration to replace the trilateral North American Free Trade Agreement (NAFTA), signed on December 17, 1992, with separate bilateral deals. The Canadians argue that they are better partners than the Mexicans and deserve more lenient terms. They claim stronger credentials in three key areas important to Trump: controlling illegal immigration, taking a tougher stance on China, and pursuing the «right» employment policies — meaning not luring American workers to Canada.
Doug Ford, premier of Ontario, an industrial powerhouse where many suppliers to U.S. automakers are based, did not hide his indignation: «Comparing us to Mexico is the most insulting thing I’ve ever heard». He added, «It’s like a family member stabbing you in the heart».
When the newly elected president of Mexico, Claudia Sheinbaum, caught wind of the «boring Swedes’» cunning flirtation with Trump, she pointed out the outrageous fact that in 2023, Canada imported $1.6 billion worth of electric vehicles from China, representing «exponential growth… For Mexico, this number is much lower».
It’s true that in August, Prime Minister Trudeau announced that Canada would soon impose 100 percent tariffs on electric vehicles and 25 percent tariffs on steel and aluminum from China in order to synchronize its actions with sanctions imposed by the United States and the European Union.
For Canada, its southern neighbor’s tariffs would be not just bad news, but very bad news. Last spring, Pierre Poilievre blamed Trudeau for a carbon tax that now adds 61 cents to every liter of gasoline, a doubling of housing prices, a doubling of the national debt, and the fastest inflation in 40 years.
A disruption — or even a hiccup — in trade and logistics supply chains will have long-term negative consequences for Canada. But a trade and tariff war will hurt both sides.
In the U.S. Midwest, in the landlocked states, local refineries process 70% of Canada’s crude oil. Overall, one in five gallons of gasoline sold at American gas stations comes from Canada. Should Ottawa impose counter-sanctions, prices could jump 30 to 40 cents a gallon, and possibly as much as 70 cents, predicts Patrick De Haan, an oil market analyst at GasBuddy. That would be a blow to Trump, who promised Americans he would tame gas prices.
Canada is a treasure trove of resources for the U.S., sending 85% of the electricity it generates south, as well as steel, aluminum, uranium and various rare earth metals used in the defense industry, among other things. Every day, $2.7 billion worth of goods and services cross the border in both directions. Total trade between the two neighbors reaches $900 billion.
Ottawa rightly believes that overhauling the North American free market — currently «rules-based» — by allowing Trump to rewrite those rules in one fell swoop would hurt the Canadian economy.
Raising tariffs on Canadian exports of goods and services would push inflation to 7% by mid-year and unemployment to nearly 8%.
As a result, predicts Michael Davenport, an economist at Oxford Economics, Trump’s discriminatory measures would lead to «a recession in 2025, triggering a sharp spike in inflation and forcing the Bank of Canada to keep interest rates high throughout the following year».
A side effect would be the epic defeat of Trudeau’s Liberal Party in next year’s election. Pierre Poilievre would then become prime minister — a remarkable and fascinating figure who joined the Conservatives not only out of calculation but also out of conviction.
In 1999, at the age of 20, Pierre wrote an essay entitled «Creating Canada Through Freedom» for the book «@Stake — If I Were Prime Minister…». In this confessional piece, he described himself as a “political junkie with a passion for public debate and a special interest in international relations. It’s no surprise that Poilievre is considered the «Canadian Trump». The only question is… will an unstoppable force hit an immovable object?
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Can Canada, Mexico and the European Union avoid becoming sacrificial lambs to prolong the reign of the hegemon? Hardly.
Elena Panina, director of the Institute for International Political and Economic Strategies (RUSSTRAT), comments: «This is how they plan to ‘Make America Great Again’: by ‘shearing’ yesterday’s ‘partners’ and scraping the bottom of the barrel. The U.S. will vacuum up the finest morsels and the last crumbs from the global table, and those ‘not in the house’ will fare poorly».
Political analyst Malek Dudakov agrees: «Regime change in Ottawa could be one of the goals of imposing tariffs on Canada. Although these tariffs carry many risks for the U.S. as well, the Canadians, as a weaker link, will be squeezed anyway. And so the North American free trade zone is gradually receding into the past — an era of protectionism is dawning».
It’s worth adding that the rampant national egoism in the West is triggered both by the failure of globalization to place everyone in a single hierarchy and by the beginning collapse of a neocolonial regime imposed on the countries of the global South with limited sovereignty.
As a result, the feeding trough of the imperial West, which ensured its dominance for at least five centuries, is shrinking. The conflict once directed outward is now turning inward.
From now on, Trump’s America will expand its prosperity by milking both near and far allies, starting with those considered the «weakest link» — and without undue sentimentality. As the American mantra goes, «Nothing personal, just business».