Navigating Trump 2.0: Making Canada Indispensible in its Relationship with America
By Andrew Erskine and Kyle Hiebert. Originally published by the Canadian Global Affairs Institute on its website.
Introduction
It remains a toss-up whether Kamala Harris or Donald Trump becomes the next U.S. president. Both candidates have shifted nearly all their focus to battleground states, where polls indicate Harris may have gained a razor thin advantage. However, this should not lull Canadian decision-makers into complacency.
If Trump does retake the presidency – still a real possibility – seismic changes lay ahead. Trump and his MAGA supporters are feverishly honing a domineering agenda to assert their will regarding America’s interests. A second Trump presidency would likely once again upend America’s relationship with allies, partners, and rivals, reshaping geopolitics and global trade – possibly for a generation to come.
As a contingency measure, Ottawa has revived its so-called Team Canada approach to diplomacy with the U.S. The strategy was conceived during NAFTA renegotiations that began in August 2017. It worked reasonably well, benefitting from how the Trump administration — then less than eight months old — was still finding its feet. That won’t be the case this time if Trump triumphs in November.
Canada has a lot at stake in the years ahead. Paradigm shifts in the global economy and security architecture are underway, as autocratic states are sensing opportunity. Compounding risks from these changes are rapid technological disruptions and the mounting effects of climate change. Amid all of this, it's important to remember that few nations have benefitted as much from globalization and America’s security umbrella over the past decades as ours. However, these benefits could ebb away should Trump return to power.
To effectively protect and advance its interests against a more visceral America First administration, Canada must regain conviction to interpose its indispensability to the U.S. while also recapturing a sense of self-confidence to challenge or disagree with America’s geopolitical actions when they go against Canadian interests and values.
Trump Unleashed
Canada-U.S. relations during Trump’s first tenure were a mixed bag.
NAFTA renegotiations overshadowed almost everything, stemming from Canada’s lopsided economic reliance on the U.S. While the Trump administration did issue multiple permits to advance the development of the Keystone XL pipeline, it also initiated a mini-trade war, with the U.S. targeting Canadian steel and aluminum exports and Ottawa retaliating with tariffs on signature American products such as bourbon and motorcycles. Trump’s personal attacks against Prime Minister Justin Trudeau upon leaving the G7 leaders summit in 2018 detracted from Canada’s hosting of the event. However, Washington also courted Ottawa’s participation in the U.S.-led military coalition that crushed the Islamic State in Iraq and Syria. Arguably the biggest rift emerged around the Meng Wanzhou extradition saga, as the Trump administration sat on the sidelines for over two years while China engaged in hostage diplomacy with two Canadian citizens.
These examples offer limited insight into what Trump 2.0 could entail for Canada. Trump’s first administration was undermined by historically high levels of turnover and acts of disobedience by defiant staffers. His legislative agenda met resistance from establishment Republican lawmakers and his own cabinet members. Neither of those barriers will exist to the same degree again.
Trump now has near total control over the GOP caucus, party apparatus and voter base. This would enable a series of populist and ultranationalist policies to be rolled out at a blistering pace both in Congress and via executive orders. A more professionalized Trump administration would enter office laser focused on cementing the president’s legacy in what would presumably be his final presidential term.
Canada's Vulnerabilities to Trump 2.0
If Trump is re-elected, Canada’s relationship with the U.S. will likely come under significant strain in three specific areas – the economy, defence, and diplomacy.
Regarding trade, Canada’s economic dependency on the U.S. does not bode well for Trump’s trademark transactional approach to relationships. A second Trump administration will instinctively reach to deploy more sticks than carrots. Increased tariffs on Canadian imports to the U.S., especially non-critical items, and heightened pressure for Canada to be in lockstep with Washington’s list of foreign sanctions – both present and future – should not come as a surprise. And one of Trump’s evident core beliefs is that raising tariffs is a more efficient way for a state to bolster its long-term revenue than investing in key economic sectors. Should Trump slap new levies on all imports, as he’s promised, Canadian policymakers will have to contend with resulting inflationary shocks that could roil the global economy.
Trump’s return will also test Canada’s economic vulnerability if a review of the Canada-United States-Mexico Agreement (CUSMA) is triggered in 2026. Such a process will create an opening for a Trump administration fixated on China to prioritize American economic nationalism at the economic expense of Canada and Mexico. This uncompromising approach will have Trump-appointed negotiators harnessing any available leverage to ensure new trade agreements disproportionately benefit U.S. industries – be it in manufacturing, agriculture and energy supply. If Republicans’ 2024 platform is anything to go by, they may encourage Trump to impose tariffs to pressure Ottawa to drop its demands to update CUSMA in ways that enhance Canada’s emerging battery industry or preserve its supply-management systems around dairy and poultry.
Another elephant in the room is Canada’s lax approach to defence spending. Trump five years ago charitably described Canada as “slightly delinquent” on defence. Since then, things have only gotten worse. Even with Ottawa’s new policy update, Canada is on track to spend just 1.76 per cent of GDP on defence by 2030.
Trump’s history of threatening to abandon NATO allies that fail to meet the two per cent target is very clear. This should ring alarm bells in Canada over continental defence and its withering military capabilities. There is already a growing bipartisan consensus in the U.S. that Ottawa is freeloading on its military spending obligations. Should this continue, Canada could be omitted from next-generation allied defence initiatives, similar to how it was excluded from the AUKUS defence pact.
Being left out of the tactical planning, development, and operations of future purpose-driven military partnerships will compound Canada’s mounting isolation and incompetence in areas of defence and national security. It will also reduce Ottawa’s exposure to, and familiarity with emerging AI-powered military platforms and technology. A recent joint strategy report from the Department of National Defence and Canadian Armed Forces describes how the country’s existing initiatives around applying AI for military use are already fragmented and disjointed.
Trump’s nationalist streak also extends to the U.S. military supply chain and could provide the basis to use Canada’s weak defence spending as a reason to ditch defence partnerships Ottawa signed with the U.S. during President Biden’s tenure. For Ottawa, this may mean the icebreaker collaboration effort, known as the ICE Pact, could be at risk.
Canada’s geographic proximity with the U.S. under a Trump presidency may also complicate diplomatic engagement with allies, partners, and adversaries. Indeed, Canada’s efforts to combat foreign interference in its democracy and institutions by the likes of China, Russia, India, and Iran will likely gain little support from a president with isolationist tendencies and who has repeatedly expressed admiration for the strongmen of the world.
For example, Trump could dismiss requests for assistance from Ottawa to repel Russian hackers attempting to destabilize Canadian energy infrastructure. He could also once again withhold diplomatic support should China ratchet up its economic coercion or arbitrarily imprison another Canadian citizen. Canadian interests would likely be seen as expendable if they didn’t dovetail with America’s strategic policies to counter China’s global ambitions. Or, if Ottawa were critical of a rushed ceasefire deal Trump has vowed to secure regarding the war in Ukraine – likely in Moscow’s favour. Trump’s mutual rapport with India’s Prime Minister Narendra Modi, along with New Delhi’s role as a lynchpin in American efforts to counterbalance China’s regional influence, might provide cover for the Modi government to continue its transnational repression against Sikh activists on Canadian soil.
Making Canada Matter
In the past, Canada’s unique trait in managing its special relationship with the U.S. was its leaders’ ability to speak openly and hold differing viewpoints to their American counterparts on critical defence, economic and diplomatic issues. This includes John Diefenbaker’s decision to open up the Chinese market for Canadian farmers or to not equip Canadian bomarc missiles with nuclear warheads in 1958. Likewise for Lester B. Pearson’s denouncement of Lyndon Johnson’s decision to bomb North Vietnam and Pierre Trudeau establishing diplomatic relations with China and Cuba during the height of the Cold War.
This dynamic was illustrated again in the early 2000s when Prime Minister Jean Chrétien defied the administration of George W. Bush by questioning the intelligence invoked as the basis to initiate regime change in Iraq, and declining to join the war effort. Business leaders and lawmakers alike feared economic reprisal by both America and allies supportive of the war. Yet in the end, the fallout was limited to President Bush cancelling his first official visit to Canada.
While these examples illustrate different strategies for managing Canadian-U.S. relations in critical moments in history, there is one overarching similarity – Canada maintaining a sense of self-confidence to challenge or disagree with U.S. geopolitical positions.
The symbiotic and synergistic nature of ties between Canada and the U.S. are found nowhere else in the world. They are central to both nations’ prosperity. As such, if Trump is re-elected, Canada – under a Trudeau or Pierre Poilievre government – must articulate and emphasize why it is an indispensable part of the North American relationship.
Canada can do this by demonstrating its willingness to be equally invested in the main issues of concern for Trump if he inhabits the White House a second time, while still being willing to challenge the assumptions that underlie them. For Ottawa, this will mean demonstrating an increased focus on defence, immigration, border security, human trafficking, criminal drug networks and China’s belligerent rise, but done so in a way still expressly based on Canadian interests and values. Expediting the creation of a new national security strategy could help bring much-needed clarity, resources and credibility to these efforts. It would also signal that Canada is shifting away from the superficial focus of keeping good relations with Washington to strategic management of the Canada-U.S. relationship.
Second, Canada must remain steadfast in believing in the durability of North American free trade – no matter any surges in populist sentiment. By simultaneously pursuing a stronger, more integrated continental economy with Trump, Ottawa will have the credibility required to maintain some daylight between the two countries’ foreign policy agendas. This would be necessary to eliminate the constant fear of Trump using negative economic tit-for-tat policies if and when Ottawa challenges or disagrees with his administration’s positions.
Ottawa will also need to demonstrate its resolve to invest in other strategies that leverage its wealth of natural resources, critical minerals, and advanced AI and quantum research capabilities. Collectively, this can form the basis for a better pitch as to why Canada is an indispensable partner to the U.S. By illustrating how Canada can help to supply and build American civilian and military goods – without undercutting American workers – Ottawa can better hedge against Trump downplaying Canada’s value as a close ally and strategic partner. Investing in these areas will also serve to provide Ottawa with greater strategic maneuverability to work outside the Canada-U.S. relationship if Washington is persistent with an inward-looking American strategy post-Trump. At its core, this approach will need to show MAGA politicians Canada’s capacity to appeal to like-minded allies in Europe and Asia to safeguard its economic and geopolitical interests.
Conclusion
Achieving all of this will no doubt be difficult. This is especially true given how the MAGA movement has inspired its own true believers within Canada’s political ecosystem. But the prospect of a second Trump presidency must spur the creation of a robust framework for affirming Ottawa’s strategic autonomy to manage Canada-U.S. relations.
And this will not be a wasted exercise if Trump loses. Throughout her campaign, Vice President Kamala Harris has vowed to maintain and enhance many of the Biden administration’s protectionist policies, including commitments to invest more in U.S. energy production and industrial sectors to support innovation “powered by American workers” and plans to create a national stockpile of critical minerals to assist in its competition with China in semiconductors, biotechnology, aerospace and auto-industries. Harris has also vowed to implement much tougher controls along the U.S.-Mexico border. This may risk more irregular migrant flows through Canada, which human smuggling networks increasingly view as a lax gateway to America.
All told, an “America Forward” presidency of Harris appears to similarly advance an America First policy in economic and technology realms – simply with more transparency and less impulsiveness.
Whether Trump or Harris wins the race to the White House, Ottawa should invest in a new approach to manage its relationship with the U.S., one that invests in issues of mutual concerns while not shying away from vigorously defending Canada’s core interests. This will require a delicate balance – and there would be a great risk of getting it wrong. But there is a greater danger in Canada not recognizing that the world has hit an inflection point, where Canada must put more effort into charting its own path forward.
