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simply outdated.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.
© 2026 The View From Here. © 2026
Fareed Khan. All Rights Reserved.
