John Turner was right in 1988. Canada-US free trade has become a threat to our sovereignty

Turner understood that Canada’s infrastructure—its east-west trading routes, its regulatory systems, its resource management—had been deliberately designed to resist US continental pressure.

By Fareed Khan 
A version of this article can be found on Substack.

In 1988, during what became known as Canada’s “free trade election,” Liberal Leader and former Prime Minister John Turner issued a warning that was dismissed by many at the time as alarmist, emotional, or simply outdated. Turner argued that binding Canada’s economy to that of the United States through a free trade agreement would, over time, erode Canadian sovereignty, undermine economic independence, and place the country at the mercy of American political whims. His words—delivered with unusual moral force during the English-language leaders’ debate—were not merely campaign rhetoric. They were a diagnosis of structural vulnerability.

Today, nearly four decades later, Turner’s warning has been vindicated with almost eerie precision. Canada now finds itself in the crosshairs of a trade war launched by US President Donald Trump, whose administration has imposed 50% tariffs on roughly $20 billion worth of goods and openly mused about absorbing Canada as the “51st state.” The very interdependence and market access that free trade advocates celebrated as a triumph of globalization has today become a weapon of coercion. Prime Minister Mark Carney is now confronting the consequences of a political decision made long before his time—an error Turner tried to warn Canadians about.

But Turner’s warning should not only be seen as one for Canada, but also as a warning that America’s friends and allies across Europe and Asia should have heeded. The political and economic instability now radiating from Washington demonstrates that globalization, when built around a single dominant power, can be a conduit for coercion and economic blackmail rather than cooperation. The world is learning that lesson the hard way.

Sovereignty lost by degrees

During the 1988 election debate, Turner delivered one of the most memorable rebukes in Canadian political history. He accused Prime Minister Brian Mulroney of reversing 120 years of nation-building “with one signature of a pen,” warning that once Canada surrendered control over its economic levers through an all encompassing trade deal, then “political independence is sure to follow.”

Turner’s critique was not abstract. He understood that Canada’s infrastructure—its east-west trading routes, its regulatory systems, its resource management—had been deliberately designed to resist US continental pressure. Free trade, he argued, would undo that architecture and replace it with a north-south dependency that would eventually leave Canada exposed.

Mulroney dismissed Turner’s concerns as overwrought, calling the agreement “a commercial document.” But Turner insisted: “That document relates to every facet of our life.”

He was right.

The Canada-US Free Trade Agreement of 1989, followed by NAFTA in 1994, created one of the largest integrated economies in the world. By 2000, the NAFTA economy reached US$11.7 trillion—far surpassing the European Union’s US$7.8 trillion. By 2025, the Canada-US-Mexico GDP had grown to US$32.9 trillion, compared to the EU’s US$21.24 trillion.

Canada prospered—but at a cost. Today, nearly three‑quarters of its exports flow south to a US economy ten times its size. Over time, supply chains fused, investment patterns aligned, and regulatory systems converged. For years, this tight integration looked like a triumph of modern globalization. But Turner saw what others missed. Interdependence is not equality. It is exposure. And the recent eruption of tariffs and trade threats by Trump has confirmed just how accurate his warning was.

Turner’s prophecy comes true

The first tremors appeared during Trump’s initial presidency (2016–2020), when Canada was sidelined in trade negotiations in favour of a US-Mexico bilateral deal. But the real earthquake struck after Trump’s return to office in 2025.

In August 2026, the United States imposed sweeping 50% tariffs on Canadian steel, autos, lumber, honey, dairy, and other goods—tariffs that even members of his own party at the federal and state levels admitted they had not requested. The Trump administration then introduced language in trade negotiations that would have required US approval for any future Canadian trade deals—a condition that would have effectively placed Canadian trade policy under Washington’s control.

Carney walked away from the talks, calling the demand “a question of sovereignty.”

British Columbia Premier David Eby was more blunt: accepting such terms would have reduced Canada “to the economic equivalent of the 51st state.”

Turner’s warning had come full circle.

Economic interdependence as a weapon

Economic interdependence has become the defining fault line of the current crisis between Canada and the United States. What Prime Minister Mark Carney is confronting today is not simply a trade dispute or a clash of personalities with Donald Trump. It is the culmination of a structural imbalance that has been building for decades—an imbalance rooted in America’s dominance over the global financial system, technological infrastructure, and supply chains. The Trump administration’s coercive tactics against Canada are not an aberration. They are part of a broader pattern of American behaviour toward allies and adversaries alike, enabled by the extraordinary reach of US economic power. What Turner feared in 1988—that Canada would one day be unable to chart its own course because its economic lifelines ran through Washington—has now become a lived reality, that Canada is quickly trying to reverse.

Washington’s ability to weaponize financial networks is perhaps the most potent example. American Treasury Secretary Scott Bessent’s threat to exclude foreign partners from the American financial system if they maintain ties with Iran was not merely diplomatic pressure, it was a demonstration of how deeply global commerce depends on US dollar infrastructure. Because most international trade, debt settlement, and cross-border banking rely on dollar clearing, the United States can freeze assets, block transactions, and cripple national economies with administrative decisions that require no multilateral approval. The European Policy Centre has warned that this creates “single points of failure” across Western economies—points controlled entirely by Washington. In effect, the US dollar has become a geopolitical lever, one that can be pulled at any moment to discipline allies or punish adversaries.

Secondary sanctions amplify this vulnerability. Even companies based in allied nations can be penalized for trading with states targeted by US sanctions regimes, because the transactions inevitably pass through American-controlled systems such as SWIFT or US correspondent banks. European governments have spent years attempting to build alternative payment channels—most notably INSTEX—to allow them to conduct independent foreign policy without risking American retaliation. Yet these efforts have largely failed, demonstrating how deeply entrenched US financial dominance remains. As one senior EU official put it, Europe has discovered their vulnerability—that “sovereignty without financial autonomy is an illusion.”

The same dynamic exists in global supply chains. The United States can disrupt critical manufacturing inputs, energy exports, and technological components through abrupt export controls or regulatory delays. The Small Wars Journal notes that this leverage is particularly acute in sectors where the US dominates upstream production, such as advanced semiconductors, aerospace components, and specialized industrial machinery. When Washington tightens access, entire industries in partner nations can be thrown into crisis overnight. The Biden administration used similar tactics against China, and Trump has now turned them against Canada and Europe. The message is unmistakable—supply chains are not neutral economic structures—they are instruments of state power.

American tech dominance weaponized

Technological dependence adds another layer of vulnerability. American firms command a massive share of global tech profits, cloud infrastructure, and artificial intelligence capacity. This gives Washington indirect control over digital services, data flows, and cybersecurity frameworks worldwide. European governments have grown increasingly anxious about this imbalance, prompting efforts to develop local cloud systems, digital currencies, and anti-coercion mechanisms designed to reduce exposure to US pressure. The New York Times has reported that European leaders now openly discuss “digital sovereignty” as a strategic priority—a term that would have been unthinkable two decades ago. The EU’s push for GAIA‑X, a federated cloud system designed to reduce reliance on American tech giants, is a direct response to fears that Washington could one day weaponize digital infrastructure the same way it has weaponized financial networks.

Canada’s confrontation with Washington is unfolding against this backdrop. Carney has framed the crisis as a test of whether middle powers can preserve sovereignty in a world where economic integration has become a tool of coercion. His warning that “America is trying to break us so that they can own us” was not hyperbole but a recognition of the structural reality Canada faces. Scholars such as University of Toronto professor Nelson Wiseman argue that Canada is providing “the biggest test yet” of whether middle powers can resist great‑power economic pressure—and whether others will follow. The Atlantic Council has similarly cautioned that US coercive behaviour is straining alliances and accelerating global efforts to diversify away from American systems. Canada, in other words, has become the proving ground for a new era in international relations—one in which nations must decide whether they will remain dependent on American systems or build the capacity to stand apart from them.

What Canada is experiencing is not merely a bilateral dispute. It is a structural crisis in the global order—one that exposes the illusion at the heart of post–Cold War globalization. Policy makers believed that economic interdependence would create stability, prosperity, and shared interests. But Turner understood something they did not—globalization built around a single dominant power is not interdependence. It is asymmetric dependence. And the United States has now demonstrated that it is willing to weaponize that dependence even against its closest allies.

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