The View From Here: Canada-US Trade

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2026-08-23

US at “war” with Canada (Part II): Preparing to live beside a hostile neighbour

Canadians must recognize that the US, under Trump, is an adversary led by someone whose increasingly erratic, coercive, and hostile behaviour towards Canada is an existential threat.

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

Part I discussed why Canada was right to walk away from trade negotiations with the United States. Part II confronts a more sobering reality. Canada must now treat the United States, under Donald Trump, as a hostile power, a coercive state seeking to subordinate a neighbour rather than negotiate with an ally.

The erosion of trust between Canada and the United States is not a diplomatic misfortune—it is the predictable outcome of Trump’s approach to governance. His administration has repeatedly violated CUSMA, imposed unilateral tariffs, threatened annexation, supported the separatist movement in Alberta, and used propaganda to portray Canada as dependent on American “benevolence.” These actions collectively demonstrate that Trump does not view Canada as a sovereign partner but as a subordinate entity whose economic and political choices should be dictated from Washington.

The first clear signal of how Trump viewed Canada emerged immediately after his election in November 2024, when he casually suggested that Canada should become the “51st state.” Although this remark was initially dismissed in the American media as a joke—and brushed off by Trump allies on Capitol Hill—it quickly took on a more ominous tone in Canada as it became a recurring talking point in Trump’s public appearances. By early 2025, the comment was no longer an isolated quip but a repeated assertion, echoed by figures within Trump’s inner circle, prompting Canadians to interpret it not as humour but as an expression of intent. The shift in perception was driven by the recognition that these statements aligned with Trump’s broader pattern of coercive behaviour during his first administration. His habit of referring to former Prime Minister Justin Trudeau as a “governor” following his re-election—a label he later applied to Prime Minister Mark Carney—reinforced the sense that Trump viewed Canada not as a sovereign nation but as a subordinate jurisdiction. This impression was further strengthened when Trump threatened to block the opening of the Gordie Howe Bridge unless Canada offered concessions in ongoing trade discussions. These were not idle remarks or empty bluster. Taken together, they formed a coherent pattern of rhetoric and pressure that Canadians increasingly understood as a signal of intent.

Political observers and security experts have warned that Trump’s ambitions toward Canada may not be limited to economic pressure. American political analyst Eric Ham has described Trump’s actions in Venezuela—economic strangulation followed by military intervention—as a “clear warning shot” for Canada. The precedent is chilling because the United States used sanctions, propaganda, and military force to install a government more aligned with its interests. The logic behind such actions is straightforward. When a smaller state resists American pressure, Trump has shown a willingness to escalate beyond economic tools. The question is no longer whether Trump would consider using military pressure against Canada, but whether Canada is prepared for that possibility.

Adam Gordon, a visiting fellow at the Cascade Institute and former senior legal and policy adviser to Canadian foreign affairs ministers, warned in the wake of the Venezuela operation, “We can’t take off the table anymore the idea that it is at least plausible that there would be some use of force or threat of use of force, and we need to be prepared for that.” His warning reflects a growing recognition among Canadian security experts that Trump’s unpredictability and disregard for international norms make previously unthinkable scenarios plausible. His foreign policy record reinforces this concern. Since returning to office his administration has taken military action in Venezuela, launched an unprovoked war against Iran, illegally blockaded Cuba, and asserted territorial ambitions over Greenland and the Panama Canal. These actions demonstrate a willingness to use force to achieve political objectives and a belief that American power should be exercised unilaterally, without regard for international law or long‑standing alliances, and this should have Canada’s political establishment very worried.

Canada’s vulnerability is not simply a matter of military imbalance. It is the combination of economic dependence, geographic proximity, and resource wealth. Canada possesses vast reserves of oil, critical minerals, and fresh water—resources the US increasingly covets. In a world of increasing demand, these assets make Canada a strategic target. Trump’s supporters have openly discussed Canada’s resource wealth as justification for annexation, arguing that American access to Canadian oil, minerals, and water is essential for America’s national security, despite the fact that a strong majority of Americans have no interest in Canada becoming the 51st state. However, this rhetoric, amplified on social media and in nationalist circles, reflects a growing sentiment within parts of the American political landscape that Canada’s resources should be controlled by America.

In this context, Canada must adopt a posture of strategic resistance. Economic countermeasures are one component of this strategy. Canada has already imposed retaliatory tariffs, and Canadians have launched widespread consumer boycotts of American products. In addition, Canadian travel to the US has plummeted since Trump took office, declining by 25% to 30%. These actions have had measurable effects on the US economy in the areas of tourism, agriculture, alcohol, and manufactured goods. Canadian tourism alone accounts for over $20 billion annually, and has declined by $12.5 billion in 2025 with a larger decline expected for 2026. These measures reflect a national resolve to resist economic coercion and demonstrate that Canada is willing to endure economic pain to protect its sovereignty.

Diplomatic realignment is another essential component. For Canada to survive an economic war with the US it must deepen ties with Europe, Asia, Africa, and Latin America to reduce dependence on American markets. This diversification is not a rejection of economic ties to the United States but a recognition that Canada cannot rely on a partner that repeatedly violates agreements and uses economic tools as weapons. Strengthening trade relationships with other regions will help insulate Canada from future American coercion and ensure that Canadian industries have alternative markets.

Military preparedness is perhaps the most sensitive and difficult aspect of Canada’s response. Canada must prepare for scenarios once considered unthinkable. Hardening the land border, expanding intelligence operations against the US, increasing defence spending, and considering nuclear deterrenceoptions, as some experts have suggested, may be possibilities Canada will have to consider. These measures are not signs of aggression but signs of realism. Canada’s current defence posture is built on the assumption that the United States is a reliable ally. That assumption is no longer valid and Canada must therefore develop independent capabilities to deter coercion and protect its sovereignty.

Public mobilization is also a strategic asset. Canadian public opinion has shifted dramatically. Canadians overwhelmingly reject annexation, support boycotts, and view the United States as the top security threat. This unity strengthens Canada’s ability to resist American pressure and signals to Washington that Canadians will not accept subordination. The surge in national pride and the widespread rejection of Trump’s rhetoric reflect a population that understands the stakes and is prepared to defend its sovereignty.

Finally, Canadians must recognize the new reality—the United States, under Trump, is not a partner. It is an adversary led by someone whose increasingly erratic, coercive, and hostile behaviour towards Canada is an existential threat. Trump’s policies are not designed to strengthen alliances but to destroy them. His approach to international relations is transactional, coercive, and driven by short‑term political gain rather than long‑term strategic stability. Canada must therefore abandon the illusion that diplomacy alone can resolve the crisis. The collapse of trade negotiations was the first step. The next steps will determine whether Canada emerges from this crisis as a sovereign nation or as a vassal state.

Canada wasn’t looking for this war, but it is one that it is willing to fight to protect its sovereignty and the Canadian economy. The path forward will be difficult, but the stakes could not be higher. Canada must act decisively, strategically, and with unwavering resolve, because the future of the nation depends on it.

US at “war” with Canada (Part I): Why ending trade talks was the rational choice

The US tried to include provisions in the proposed deal that would give the US a say on which countries Canada could make trade agreements with—a direct attack on Canadian sovereignty.

By Fareed Khan

A version of this article can be found on Substack.

When Canada suspended trade negotiations with the United States on August 22, 2026, it marked a decisive moment in a rapidly deteriorating bilateral relationship. The collapse of talks was not the product of diplomatic miscalculation or insufficient flexibility on Canada’s part. Rather, it reflected a sober recognition of a political reality—under Donald Trump, the United States cannot be trusted to honour any trade agreement it signs. Canada’s withdrawal was not only justified, it was necessary.

The immediate trigger for the breakdown was a set of last‑minute demands from the US delegation that would have sharply curtailed Canada’s economic sovereignty. As Prime Minister Mark Carney explained in a media conference after trade negotiations collapsed, Washington attempted to insert provisions that would “reduce tariff relief for Canadian-made vehicles, restrict Canada’s ability to strike trade deals with other countries, and weaken protections for language, culture and sovereignty.” These demands, Carney said, were “unacceptable.”

But the deeper reason—one that isn’t mentioned openly—that Canada walked away lies in the pattern of behaviour exhibited by the Trump administration since returning to office in 2025. Trump has repeatedly demonstrated that the United States’ signature on a trade agreement is not worth the paper it is written on. The Canada–United States–Mexico Agreement (CUSMA)—the very deal Trump negotiated, signed, and celebrated as “the best trade deal ever”—has been systematically violated by his own government since he returned to office.

Beginning in March 2025, Trump imposed sweeping tariffs on Canadian steel, aluminum, autos, lumber, and dozens of other goods, despite CUSMA’s explicit prohibitions on such unilateral measures. He escalated these tariffs throughout 2025 and 2026, threatening 35% duties on Canadian imports, as well as a threat of 100% tariffs if Canada pursued independent trade ties with China. These actions shredded the agreement he once touted as a triumph of American deal‑making.

The pattern is unmistakable. Trump negotiates agreements for political theatre, then disregards them when they no longer serve his immediate interests. This behaviour mirrors his decades‑long record in private business, where he was notorious for breaking contracts, stiffing contractors, and using litigation as a weapon to avoid fulfilling contractual obligations. The same tactics now define his approach to international diplomacy.

Canada entered trade negotiations fully aware of Trump’s history. Any new agreement would have been vulnerable to the same fate as CUSMA—signed with fanfare, then violated at will. In this context, walking away was not an act of defiance but an act of prudence. As Carney and other Canadian leaders said repeatedly, “No deal is better than a bad deal.”

The stakes for Canada in any deal are enormous, and Carney decided to pull the plug after some last minute American demands that Canada found unacceptable. The US attempted to include provisions that would have restricted Canada’s ability to negotiate trade agreements with other countries—a direct attack on Canadian sovereignty—as well as demanding a restriction on provisions to protect the French language and Canadian culture. Accepting such terms would have subordinated Canada’s economic future to the whims of an unpredictable US president who has repeatedly mused about annexing Canada as the “51st state.” These comments, dismissed by some in Washington as jokes, are taken seriously in Canada because they align with Trump’s broader pattern of coercive behaviour.

Trump’s tariff policies are not merely economic measures, they are instruments of pressure designed to weaken Canada’s economy and force political concessions. As one article noted, Trump has pursued “a calculated campaign of economic coercion, rhetorical intimidation, and internal destabilization against Canada.” The comparison to Adolf Hitler’s “cold Anschluss” strategy toward Austria—incremental pressure, propaganda, support for separatists, and economic strangulation—is not made lightly.

Experts across Canada’s academic and policy communities have warned that Trump’s actions represent a structural threat to Canadian sovereignty. International security scholar Aisha Ahmad stated bluntly: “There is no political party, or leader, willing to relinquish Canadian sovereignty over economic coercion, and so if the US wanted to annex Canada, it would have to invade.” Her warning reflects a growing consensus that Trump’s ambitions extend beyond trade.

Public opinion data reinforces this shift. Multiple polls conducted in late 2025 and early 2026 show that Canadians now view the United States—not China or Russia—as the greatest threat to national security, a dramatic reversal of decades of public sentiment and a reflection of how deeply trust in the bilateral relationship has eroded. A Nanos Research survey found that 55% of Canadians identified the United States as the single greatest security threat, making it more than three times more likely to be named than China and far ahead of Russia, which stood at 14%. Another poll conducted by Léger revealed that 49% of Canadians believe the United States poses the greatest threat to world peace, outpacing Russia by nearly 20 points and marking one of the most striking shifts in Canadian geopolitical perception since the end of the Cold War. Even more alarming, an Angus Reid Institute survey in early 2026 reported that 57.9% of Canadians consider a direct American military invasion plausible in the near term, a finding that would have been unthinkable only a few years ago and underscores the extent to which Trump’s rhetoric and policies have shifted public perception of the US.

The economic consequences of Trump’s tariffs have been severe on both sides of the border, producing cascading disruptions across industries, supply chains, and household budgets. The Tax Foundation estimates that US households will pay an additional $1,253 annually due to tariff‑driven price increases, a burden that falls disproportionately on lower‑income families who spend a greater share of their income on imported goods. Analysts also note that tariffs function as a regressive tax, raising prices on essential goods while offering no compensatory benefit to consumers, and warn that prolonged tariff escalation could reduce real household income nationwide. The automotive industry—one of the most integrated sectors in North America—has been hit particularly hard, with Trump’s tariffs on Canadian and Mexican auto parts increasing production costs by approximately $3,000 per vehicle, a figure that ripples through assembly plants in Michigan, Ohio, Ontario, and Mexico.

Canada has not stood idle. Canadians have launched a widespread boycott of US goods, with 71% pledging to buy fewer American products. Liquor stores in Quebec, Ontario, and British Columbia have removed US wines and spirits from shelves. Tourism from Canada to the US—worth over $20 billion annually—has plummeted, costing the US an estimated $12.5 billion in 2025 alone. These actions reflect a national resolve to resist US economic coercion.

Canada’s energy leverage is also significant. The US Midwest relies on Canada for more than 60% of its crude oil imports, a dependency that has grown over the past decade as American refineries optimized their operations around Canadian heavy crude. Any disruption—whether through tariffs, export restrictions, or politically motivated supply constraints—would have immediate consequences for American refineries and consumers, driving up gasoline prices, straining industrial production, and destabilizing regional economies that depend on affordable energy. Analysts have noted that even modest interruptions in Canadian supply can produce price spikes of 40 to 50 cents per gallon, with ripple effects across transportation, agriculture, and manufacturing sectors. This vulnerability is compounded by the fact that several Midwestern states, including Michigan, Ohio, Wisconsin, and Minnesota, lack alternative sources of heavy crude that can be substituted without costly refinery adjustments. Energy economists warn that if Canada were to impose retaliatory export taxes or redirect supply to other markets—such as Europe or Asia—US refiners could face shortages lasting months or years, given the time required to reconfigure processing units.

The strategic importance of Canadian electricity exports is equally notable. Provinces such as Quebec and Manitoba supply significant amounts of power to northeastern and Great Lakes US states, meaning any disruption could affect grid stability and consumer prices. In this context, Canada’s energy resources function not only as economic assets but as geopolitical leverage—an often overlooked dimension of the current trade conflict that underscores the risks inherent in weaponizing tariffs against a neighbour.

The broader geopolitical context is equally alarming. Trump’s tariff policies echo the catastrophic Smoot‑Hawley Tariff Act of 1930, which helped trigger the Great Depression, fuelled nationalist extremism, and destabilized global markets at a moment when international cooperation was most needed. Economists and historians have repeatedly warned that large‑scale tariff escalation tends to produce retaliatory spirals, collapsing trade flows and amplifying political tensions between states. The International Monetary Fund, OECD, and World Bank have all issued formal warnings that Trump’s tariff regime risks plunging the global economy into recession or even depression, noting that today’s interconnected supply chains make the world far more vulnerable to protectionist shocks than in the 1930s. Global growth forecasts have been downgraded multiple times since early 2025, with analysts citing Trump’s trade policies as a primary driver of financial volatility, declining investment, and rising inflation across advanced and emerging economies. The stock market crash following Trump’s announcement of a universal 10% tariff in April 2025—erasing trillions of dollars in value—illustrated how quickly markets react to protectionist threats.

International observers have also expressed concern that economic nationalism often coincides with geopolitical aggression, pointing to historical patterns in which trade wars preceded military conflict. French economist Frédéric Bastiat’s maxim, “When goods do not cross frontiers, armies will,” resonates strongly today, as Trump’s rhetoric toward allies—including Canada—has grown increasingly hostile.

Trump’s foreign policy has further destabilized the international order, reflecting a pattern of unilateralism and coercive action that has alarmed allies and international institutions. His administration authorized military strikes in Venezuela in 2025, aimed at forcing regime change after years of escalating sanctions and political pressure—an operation widely condemned by regional governments and international legal experts for violating sovereignty norms. His decision to launch a war against Iran in conjunction with Israel, including strikes on Iranian naval assets and energy infrastructure, severely disrupted the movement of oil and natural gas out of the Persian Gulf, prompting the International Energy Agency and multiple global markets analysts to warn of heightened volatility in global energy prices and supply chains.

The American president also tightened and expanded the US embargo on Cuba, including the unprecedented step of ordering US naval vessels to block fuel tankers from reaching Cuban ports—an action criticized by the United Nations and humanitarian organizations for exacerbating shortages of food, medicine, and electricity for millions of civilians. In addition, he revived earlier ambitions expressed during his first term to take control of Greenland—comments that Denmark’s government described as “absurd” and destabilizing. His administration also signaled interest in exerting greater U.S. control over the Panama Canal, with senior officialsarguing that American strategic dominance in the Western Hemisphere required “direct oversight” of critical infrastructure—remarks that alarmed Panamanian leaders and raised concerns among international observers about a return to pre‑1977 U.S. interventionism.

Taken together, these actions demonstrate a willingness to use force, coercion, and territorial pressure to achieve political objectives—behaviour that many analysts argue has not been seen from a major Western power since the early 20th century. In this context, Canada’s decision to walk away from trade negotiations was not only justified—it was essential. The US under Trump has shown itself to be an untrustworthy partner, repeatedly violating trade agreements, and using economic tools as instruments of political intimidation. Trump’s behaviour toward Canada has been erratic, coercive, and increasingly hostile, marked by threats of 100% tariffs, public musings about annexation, and efforts to restrict Canada’s ability to negotiate trade agreements with other countries. His administration’s willingness to disregard international norms, destabilize global markets, and pressure smaller states into compliance underscores the risks Canada faces in any negotiation with a Trump led US administration.

The question now is not whether Canada should have walked away—it is how Canada should respond to an escalating threat from a neighbour whose leadership has embraced unpredictability, coercion, and a worldview fundamentally at odds with the stability and mutual respect that once defined the bilateral relationship.

Part II will continue this analysis by examining the strategic, economic, and security implications of treating the United States as an adversary—and what Canada must do to protect its sovereignty in the years ahead.