Canada Is Not the Enemy

By Rich Lowry

Sunday, March 09, 2025

 

Canada has always been an inoffensive country, and how is that working out for it?

 

President Trump has made more threatening sounds about Canada than about Russia. He is wielding a weapon — sweeping 25 percent tariffs — that would almost certainly drive our Friendly Neighbor to the North into a recession, while he is making its leaders and people honestly fearful of the United States.

 

The madman theory has much to recommend it . . . when dealing with Hamas or the Houthis. No one heretofore has thought it has similar benefits when handling relations with Ottawa.

 

It’s important to realize the magnitude of the threat Trump is making. As Sean Speer writes at the lively and smart website The Hub, Trump’s tariffs would subject Canadian exports to rates that are “ahistorical.” They’d be higher than the pre-NAFTA rates and higher than the rates prior to the Canada-U.S. free-trade agreement in the late 1980s. The only comparison would be the rates under Smoot-Hawley.

 

About three-quarters of Canadian exports go to the United States, accounting for 20 percent of Canadian GDP. The Fraser Institute, a Canadian free-market think tank, noted that when the 25 percent tariffs seemed imminent, the Canadian economy was about to “absorb the biggest external shock in a century (apart from during the initial phases of the COVID pandemic).”

 

One estimate has the effect of the U.S. tariffs, coupled with Canadian retaliation, reducing “the level of Canadian real GDP by at least 3 percent over 2025-26.” This, the Fraser analysis continues, would represent “a permanent output loss, meaning it is national income we will never recoup. Business fixed non-residential investment falls by 12 percent, with exports dropping by nine percent. Unemployment rises significantly and job creation downshifts.”

 

This is the kind of thing that a much larger country does to a miscreant nation when it is punishing it for pursuing an illicit nuclear weapon, invading a neighbor, or engaging in grotesque human rights abuses.

 

Canada’s sin is to be party to a free-trade agreement — the USCMA — that it negotiated in good faith with the same U.S. president that is now browbeating it.

 

It’s clearly a case of “you f***ed up, you trusted us,” although it’s not as though Canada has anywhere else to go. It has a long border with the United States, not, say, Germany (something to be profoundly grateful for), and it has bridges connecting it with the United States, not Sweden. On sheer geographic grounds alone, a deep trading relationship with the United States makes sense.

 

Defenders of Trump’s approach to trade tend to cite China as an example of how pure free-trade theory doesn’t work in the real world — China is an authoritarian society, engages in massive intellectual theft and other unfair practices, and can’t be trusted not to cut off supply chains in a crisis.

 

None of this applies to Canada, a friendly, English-speaking country that shares our values and fights wars alongside us, not against us.

 

That doesn’t mean that there aren’t legitimate complaints about Canada. But the fentanyl trade and illegal border crossings aren’t among them (whatever its other issues, Canada is not Mexico). It is true that Canada uses protectionist measures to protect politically sensitive sectors of its economy, most notably dairy and lumber.

 

These matters have long been the subject of U.S.–Canadian negotiations. The lumber dispute, which began in the 1980s, is so long-running that the phases of it are known as Lumber I, Lumber II, and so on — a little like the Battles of the Isonzo in World War I.

 

As for dairy, it was part of the aforementioned USMCA. If President Trump couldn’t abide Canada’s dairy arrangements, he could have negotiated differently back in his first term.

Regardless, dairy and lumber are no reason to nuke Canada’s economy (no one is pure on agriculture — certainly not us).

 

All of this could be addressed in an orderly fashion when the USMCA is scheduled to come up for review next year. Instead, we have an on-again-off-again threat to tank the Canadian economy based on ever-shifting rationales.

 

Also, whatever else you think of Canada’s dairy policy, it isn’t an emergency as contemplated under the International Emergency Economic Powers Act that Trump is using as the legal basis for his tariff threats. An ongoing irritant, yes; a crisis, no. An emergency would be Canada launching an amphibious invasion of the upper peninsula of Michigan.

 

If nothing else, President Trump is succeeding in deranging Canadian politics. It’s not just the possibility of ruinous tariffs but the talk of Canada as the 51st state, a somewhat amusing joke that — as Trump keeps talking about it — now has to be considered half-serious.

 

This is disrespectful at best and threatening at worst; it reminds Canadians in a deliberately insulting way of how dependent they are on us.

 

Why should we care that Canadians are scared or angry? Well, it may not prove enough to save Justin Trudeau’s party in an impending election, but it certainly has helped the Liberals, with former central banker Mark Carney replacing Trudeau. An election that was going to be about issues favorable to the Conservatives — cost of living, crime, migration — is now dominated by Donald Trump.

 

It should be self-evident that we’d prefer that a conservative populist, namely Pierre Poilievre, be the next prime minister of Canada rather than another woke progressive, yet we are making Poilievre’s life more difficult.

 

It’s more than the election. Canadians are now discussing truly radical ideas: banning Trump from the coming G7 meeting in Alberta; seeking protection from the U.S. via a European nuclear umbrella; cutting off electricity to the U.S.

 

Canada’s pro-American voices are embattled. Their view that it is important for Canada to be in the U.S. orbit and to embrace free trade with the U.S. as part of a general free-market orientation is harder to defend than it was just a few months ago.

 

The worst case is that Canada returns to the belief that it needs the state to defend it against American economic and cultural influence and begins to cooperate with Europe on defense matters more than with the U.S. — for instance, by canceling its purchase of our F-35s and going with a European alternative.

 

Trump has suggested that he believes he can use economic coercion to induce Canada to submit to annexation. The opposite is likely to be the case; the more we troll Canada and disrupt its economy, the greater the anti-U.S. reaction. The former prime minister Stephen Harper, a level-headed conservative, said recently, “If I was still prime minister, I would be prepared to impoverish the country and not be annexed, if that was the option we’re facing.”

 

If area bombing couldn’t crush civilian morale in World War II, it’s unlikely that Canada is going to give up its independence after a recession.

 

If we play along with this scenario and Canada hypothetically did, in response to sheer economic pain and intimidation, become part of the United States, it would instantly be the most anti-American region of the country. And shortly after its incorporation, the U.S. would surely face the most serious secessionist movement since the Civil War, emanating from the new 51st state.

 

This is all so unnecessary and strategically backward. Our relationship with Canada shouldn’t be like Russia’s with some other Slavic country in its near abroad. We need allies, and none is more a natural one than our northern neighbor, with which we are joined at the hip, historically, economically, and in terms of geography.

 

Together, as the Fraser Institute notes, we make up the world’s largest landmass. Traditionally, this has been considered a boon to be exploited by close cooperation. President Harry Truman said in 1947 that we think of each other “as peaceful and cooperative neighbors on a spacious and fruitful continent,” and he meant it as a good thing.

 

There are things we should want Canada to do, most importantly, to spend more on defense. Yet a Prime Minister Poilievre (should he get there) and President Trump should be looking to deepen what is already an incredibly close defense relationship — with a particular focus on securing our interests in the Arctic — rather than foundering on gratuitous enmity.

 

In the same vein as Truman, John F. Kennedy said of Canada, “Geography has made us neighbors. History has made us friends. Economics has made us partners. And necessity has made us allies. Those whom nature hath so joined together, let no man put asunder.”

 

The man in the Oval Office, unfortunately, has a different idea.