The Canadian-American Trade War: A Defining Moment for Canada’s Future
How Trudeau’s Resignation, Trump’s Tariffs, and Shifting Alliances Are Reshaping Canada’s Economic and Political Landscape
The Wall Street Journal Editorial Board calls it “The Dumbest Trade War in History.” I agree. Most people I have spoken to, agree. The Canadian left, center and right stand united in agreement.
I’ve mentioned this in my previous articles and I will mention it here, once more. Donald Trump does not understand the concepts of international trade, macroeconomics, global alliances, treaties, or geopolitics. In less than two weeks, Donald Trump has ruled by executive action alone, pardoned January 6th rioters, withdrawn from the U.S. Climate Accords and the World Health Organization, launched an economic assault on America’s closest ally, and given Elon Musk free rein with no oversight or accountability.
The Canada-US relationship transcends global alliances, economic treaties, and even NATO. As President Kennedy once said, as Prime Minister Trudeau reiterated:
“Geography has made us neighbors. History has made us friends. Economics has made us partners. And necessity has made us allies. Those whom nature hath so joined together, let no man put asunder.” - President John F. Kennedy
The Canadian and American markets are so deeply integrated. This integration transcends trade or alliances but is based on mutual security, defense, and supply chain procurement. And contrary to Mr. Trump’s baseless claims, the United States does need Canada.
First and foremost, the US imports 50 percent of Canada’s softwood lumber. What just happened in the United States? A devastating wildfire that destroyed thousands upon thousands of homes. They’re going to need our wood to rebuild. Second, 60% of U.S. crude oil imports come from Canada—specifically from Alberta’s oil sands. This isn’t the gasoline that fuels your car; it’s the heavy crude essential for powering refineries, industrial equipment, and machinery. You get the gist. Third, in 2023, the United States imported about 33 terawatt-hours of electricity from Canada, which is about 90% of the country's annual electricity imports. This electricity powers a majority of the Northeastern United States with 1.3 million homes powered by Ontario’s Hydro One.
I can keep going with many more examples such as potash and of course—delicious Canadian Maple Syrup. Suffice it to say, that the United States needs Canada a lot more than Donald Trump would like you to believe.
In terms of geopolitics, the United States is undermining one of its closest allies and weakening it. How could anyone believe that weakening your closest ally, one with whom you share the world’s largest demilitarized border, rely on for the majority of your energy, softwood, and fertilizer imports, and that serves as a strategic buffer against Russia, is a good idea?
I could go on endlessly about the sheer miscalculation and absurdity of this decision by the 47th President, but I'd rather shift the focus to something more important.
What does this mean for Canada?
Canada has an immensely unique opportunity here. The United States doesn’t want to play ball with us anymore, fine. But, I can guarantee that many other countries would love to increase their trade relations and build more sophisticated alliances with us.
For starters, I strongly believe Canada should take this as an opportunity to diversify its trading partners. Start working, trading, and building strong relationships with our European allies, fellow Commonwealth nations, and of course Mexico, the other victim in Trump’s tirade.
Moving on, I emphasize the need for Canada to expand its natural resources and energy industries. Our allies in Europe need a strong alternative to Russian oil and gas, in light of the war in Ukraine. Despite our climate commitments, we are in a crisis—and we must prioritize our security. It’s time to expand our liquid natural gas (LNG) production, build more pipelines, invest in nuclear energy, and strengthen exports to our European allies. They need us, and they want us.
Here at home, we need to remove our interprovincial trade barriers. These barriers according to Internal Trade Minister Anita Anand act as an inadvertent 14 percent tariff between provinces. Eliminating these barriers would boost Canada’s GDP by nearly 4%, create thousands of jobs, and strengthen the country’s internal economy, making us more self-sufficient and resilient in the face of global uncertainty and an increasingly hostile United States.
Canada is a natural resources and energy superpower—we just haven’t unlocked our full potential. We must actively encourage investment, both domestic and foreign, into every sector of our resource economy—from softwood lumber and potash to our vast water reserves. As Denis Coderre aptly noted, Quebec alone holds 3% of the world’s freshwater while Canada represents less than 1/1000th of the global population. Our hydroelectricity, oil and gas production and nuclear energy expertise position us as a net energy exporter to the world. It’s time to fully embrace and expand this advantage. There is no reason why Canada should not be an economic superpower in the next ten years.
Finally, the idea of CANZUK—a proposed economic and strategic alliance between Canada, Australia, New Zealand, and the United Kingdom—has gained significant traction in response to U.S. aggression. This framework would promote free trade, enhanced mobility, and deeper diplomatic and defense cooperation among these four nations, all of which share historical, cultural, and economic ties. Canada already maintains close partnerships with these countries through agreements like the Five Eyes intelligence-sharing alliance and Commonwealth membership. The United Kingdom, in particular, remains one of Canada’s closest allies and a key NATO partner. Strengthening these bonds could offer Canada a more secure and diversified economic future, reducing dependence on an increasingly unpredictable United States.
One more thing, and I say this with the utmost seriousness: Canada must increase its military spending—immediately. We need to meet, if not exceed, NATO’s 2% of GDP target. Given our three vast coastlines, the second-largest landmass in the world, and an abundance of natural resources, our national defense cannot remain an afterthought. With our closest ally turning against us, we must be prepared to defend our land, our skies, and our seas—not just today, but tomorrow and every day moving forward.
It’s reassuring to see provincial premiers, the federal government and even opposition leaders largely united behind Team Canada. One thing is certain—Donald Trump has delivered Canada an inadvertent wake-up call and, in doing so, an unprecedented opportunity. This is our moment to unite with purpose, strengthen and diversify our economy, expand our natural resource industries, and forge new and more resilient alliances that will secure Canada’s future on the world stage.
Who knows? Maybe Canada will end up joining the European Union. That’ll piss off Donald. More from me soon. If you enjoyed this piece, subscribe to The Political Press, it’s free.