Trump’s trade war demands a radical response from Canada
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Donald Trump’s threat of a 25 per cent tariff on Canadian imports looms over the economy like a guillotine. If the blade drops, the country could be pushed into a deep recession, wiping out thousands of jobs and reversing decades of economic cooperation with the United States.
Even if Trump delays the move—as he did with his latest 30-day extension—the message is clear: Canada is at the mercy of the former U.S. president’s trade whims. Whenever we displease him, the hammer may fall.
This is more than a routine trade dispute. Trump’s threats amount to economic warfare, especially given his past statements about annexing Canada as a “51st state” or seizing control of our borders and resources. There is no room for complacency. Canada must be prepared to fight back—not just with retaliatory tariffs that could do as much harm to Canadian consumers as they do to the U.S. economy, but with a broader strategy to reduce economic dependence on the U.S. and shield Canadian workers from the worst effects of Trump’s trade aggression.
 Trump’s economic warfare could push Canada into recession. |
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One approach is to target Trump’s inner circle. Just as Canada imposed sanctions on Russian oligarchs after the invasion of Ukraine, similar measures could be applied to members of Trump’s cabinet and family. Billionaires like Elon Musk, whose businesses—including Starlink, Tesla and X (formerly Twitter)—have interests in Canada, could be affected by government policy decisions. Ontario Premier Doug Ford briefly floated the idea of cancelling the province’s contract with Starlink. Though he backed down, the concept remains viable as part of a broader effort to hold powerful business figures accountable.
Another measure would be freezing or seizing American corporate assets in Canada. It cannot be business as usual for U.S. companies operating here while their government actively undermines Canadian sovereignty. Repatriating strategic sectors—such as natural resources—by taking public control of private U.S. holdings would both weaken corporate America and reinforce Canada’s ability to control its own economy.
Energy exports offer another point of leverage. The U.S. depends on Canadian oil, gas and electricity, which is why Trump has only threatened a 10 per cent tariff on the sector. The Canadian government could introduce its own 15 per cent export tax, driving up energy costs south of the border while generating more than $20 billion per year in revenue. Instead of absorbing the funds into general revenues, Ottawa could channel them directly to provinces where the resources are produced, supporting worker transition programs and economic diversification.
Intellectual property rights present yet another opportunity for countermeasures. Canadians pay a premium for brand-name American drugs that could be manufactured domestically as generics. By limiting U.S. pharmaceutical patents, Canada could reduce drug costs, create new business opportunities, and deliver an economic counterpunch to the American sector.
These ideas are just the beginning. Additional options include “Buy Canadian” procurement policies, restrictions on foreign acquisitions of Canadian firms, and greater investment in Canadian cultural industries to reduce U.S. media influence.
With Trump’s trade threats escalating, Canada cannot afford to be caught off guard. There is no rational negotiation with a bully. If we don’t act now, we may not get another chance.
Hadrian Mertins-Kirkwood is a senior researcher with the Canadian Centre for Policy Alternatives.
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