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‘Welcome to the post-America world’: The Hub reacts to the threat of Trump’s on-again, off-again tariffs

Commentary

President Donald Trump speaks in the James Brady Press Briefing Room at the White House, Jan. 30, 2025, in Washington. Alex Brandon/AP Photo.

The roller coaster ride continues. Monday started with the looming prospect of President Donald Trump’s tariffs against Canada, Mexico, and China set to be enforced at midnight. By mid-afternoon, following discussions between Trump and his North American neighbours, it was announced that there would be a 30-day delay before the implementation of any such measures.

In exchange, both Canada and Mexico committed to implementing stronger border security plans as well as steps to combat illegal drug shipments and the entry of migrants into the U.S., two of Trump’s most pressing priorities and the stated rationale for the tariffs.

We’ve gathered a host of The Hub’s experts and insiders to make sense of where things stand, how Canada should react to Trump’s tariff threats, and where we go from here.

A battle between Canadians’ heads and hearts

By David Coletto, founder, chair, and CEO of Abacus Data

As Canadians watch intently as Trump’s on-again, off-again tariff drama continues, the immediate public response has been a surge of solidarity and national pride.

In response to the still-looming tariffs, many Canadians will vow to buy domestic goods and boycott as many American products as possible. However, that wave of patriotism will soon confront stark economic realities. Essential items may become harder to find, prices could rise sharply, and the anxiety around job security will deepen. I expect many are asking friends and family, “What does this mean for us?”

With an already heightened sense of scarcity, Canadians will increasingly look to government for both reassurance and protection. There will be a deep tension between emotion and pragmatism.

Demands for concrete measures—be they rebate cheques, economic safety nets, or further retaliatory actions—will grow louder.

From my vantage point, I see a clear shift in public sentiment happening: Canadians expect their leaders to stand up for them and protect them. In this climate, leaders—in government, at work, and in the community—that respond swiftly and effectively, offering tangible solutions and reassurance, will earn the trust of voters.

Let’s focus on self-help, not self-destruction

David Pierce is vice-president, government relations at the Canadian Chamber of Commerce

Canada has now been twice burned by the hot stove of relying too much on the United States for our trade and prosperity.

As happened with China during the last Trump administration, our weaker dollar will partially cushion any impact of President Trump’s tariffs if or when they are finally enacted—which might give us just enough runway to get our economy in order.

Regardless of whether or not Trump does go through with his threats, we must learn from the mistakes that led to this moment. For decades, Canada has failed to invest in core infrastructure to get our products and our resources to markets overseas. We have more trade agreements piled up on the hot desks at Global Affairs than we have infrastructure projects underway to expand or renew our ports, rail, airports, multi-modal hubs, and yes, pipelines. If our steel mills have capacity, and we’re looking for stimulus, embarking on a Build and Trade Canada infrastructure plan is an obvious next step.

Our businesses and people are overtaxed. Regulation in almost every province is so cumbersome and inconsistent with its neighbours’ regulations that it’s extremely difficult to trade interprovincially. We need to fix that, and quickly. If President Trump’s tariffs are in fact implemented in 30 days, that over-regulation and taxation could lead to a real flight risk for our businesses.

Probably the most important but least talked about development of this whole situation is defence. Is Canada still so sure the Americans will come to our rescue? By now, we should have all the evidence we need to invest seriously in our armed forces. Perhaps our overdue action will be an olive branch for the next American administration—maybe even this one.

Canadians are right to be angry. Not only is President Trump threatening the most successful trading relationship the world has ever seen, but he is doing it very rudely. But let’s channel that anger into setting Canada up to compete on the new world stage.

Don’t let Trump’s tariff threats distract from what’s going on at home

By Jay Goldberg, Ontario director of the Canadian Taxpayers Federation

One billion dollars a month.

That’s how much Ontario taxpayers are currently stuck paying in interest on the provincial debt.

That money doesn’t go to health care. It doesn’t go to fund new roads or schools. It goes to bondholders on Bay Street.

Ontario voters shouldn’t lose sight of that as Premier Doug Ford and other provincial party leaders tour the province and announce billions of dollars in new spending plans ahead of this month’s provincial election, being held in the midst of a trade war.

Over the past 20 years, successive Ontario governments have only balanced the budget twice in 20 tries. At the same time, the province’s debt has more than doubled.

Ontario already has more debt than any other non-national government in the world, at over $425 billion.

As voters, it’s up to us to demand better.

If the provincial debt isn’t already an elephant in the room during this campaign, it should be.

Ontarians should demand accountability. For every new dollar in spending politicians promise during this campaign, they should also commit to a dollar of specific spending cuts.

Ontario’s finances won’t get back on track until politicians start to pay for their promises. Even during a time of turmoil, as conflict with our biggest trading partner continues, it’s important for voters here at home to hold politicians’ feet to the fire.

We’ve learned nothing from history

By Vincent Geloso, assistant professor of economics at George Mason University and senior economist at the Montreal Economic Institute

In 1928, Herbert Hoover was elected on a strong tariff platform. When tariffs increased in June 1930, Canada retaliated by raising duties on sixteen U.S. products, covering 30 percent of American exports to Canada. The trade war had begun. In 2025, we are set to do the same thing, having learned nothing.

First, recent economic research shows that half of the Great Depression’s severity in Canada stemmed from the trade war. Import taxes function the same as export taxes, raising input costs for firms and disrupting trade relationships. Businesses turned to less efficient methods due to higher costs, exacerbating the downturn. Retaliatory tariffs only repeat the bad chapters of our history.

At least in the 1930s, some tariffs were lowered: the government cut duties on 270 Commonwealth goods to reduce input and consumer costs. Today, we are not even copying the least harmful aspect of the dunderheaded policies of the 1930s.

The only real solution is to boost productivity so Canadian firms can compete regardless of tariffs. This requires fiscal discipline, tax cuts, deregulation in key industries, attracting investment, and eliminating our own tariffs. Yet, none of these superior (and only) options are being discussed—confirming H.L. Mencken’s insight that for every complex problem, there is a clear, simple, and wrong answer.

Welcome to the post-America world

By Raquel Garbers, visiting executive at the Centre for International Governance Innovation

We are living in the most historically significant moment since the fall of the Soviet Union. The shift in global power away from the United States has reached the point where the payoff that comes from “running the world” is not worth the cost. In upending how it engages in the world, the United States declared, “We’re out.”

In the post-America world, the United States will rebuild its national power as it readies itself for the risk that today’s economic war with China will slide into full-scale war. It will tackle its internal rot (drugs, illegal migration), rebuild its economic base (resetting its trade deals), and focus its military power (renegotiating its membership in NATO, building its defence and industrial base, and deploying its military sparingly).

Rich in natural resources, geographically connected with the United States, and deeply integrated into its critical sectors, Canada is on the frontlines of the Unites States’ contest with China. To secure ourselves, we must: make our economy competitive; unleash the resource sector to capitalize on the manufacturing renaissance triggered by states moving away from hyper-globalization and towards intangibles; and rebuild our industrial base to serve as a secure source of supply for states on the frontlines of the contest with China and Russia.

We can make ourselves a strategic powerhouse in the post-America world, or we can let ourselves grow weaker and poorer. Canadians deserve a say in that choice. Canadians need a new prime minister.

The big problem with Trump’s end game

By Alicia Planincic, director of policy and economics at the Business Council of Alberta

One of the most striking charts from the Bank of Canada’s recent Monetary Policy Report was one showing the number of times a product can pass back and forth across the Canada/U.S. border en route to completion. This may be well-known when it comes to the auto industry. But it’s surprisingly common across other industries as well.

This is an important reminder that modern trade isn’t the simple Econ 101 model where a product is made in one country and sold to another. Now, the lines are blurred. Businesses purchase various inputs at various stages from around the world, all to make the best product for the lowest price. In the U.S.’s case, about half of all imports are between “related parties”, especially when it comes to trade with the U.S. and Mexico.

This interdependence is a problem for President Trump and his presumed end game: reviving American manufacturing, and the good jobs assumed to come with it.

Economic theory tells us that a tariff on imports would make local manufacturers more competitive relative to international competitors who now face a higher cost. But that ignores this new reality: many of the inputs of American manufacturers are themselves from foreign companies. In other words, not only will tariffs raise costs for American consumers, they’ll also raise costs on the industry they are meant to help.

Sorry, folks—we’re going to be at this a while

By Jennifer Robson, associate professor of political management, Carleton University

The story of the Trump 1.0 term was that this guy talks a big game but doesn’t always deliver. Remember when we all kept waiting for an “Infrastructure Week” that never came? When you look at all of the published projections for 2025 from the big U.S. investment firms, the bet they made was that he wouldn’t actually do what he had promised on tariffs during the campaign. The early hours of trading on Monday saw sharp losses as investors braced for the worst. Perhaps that market upheaval was a useful guardrail that convinced Trump to delay his threatened tariffs.

Trump 1.0 did have some guardrails and was in fact often diverted from pursuing his worst ideas. But now, in regime 2.0, as we were warned, we cannot count on any guardrails save for Trump’s own ego. In the short time he’s been back in office so far, there are just three measures where he has so far slowed down or backed down—birthright citizenship in contravention of the Constitution, an immediate spending freeze in contravention of the will of Congress, and calling off extraordinary sanctions on Columbia over landing two planes of deported migrants.

It remains to be seen if tariffs will be the fourth, or if he is just prolonging the pain and will bring down the hammer in 30 days’ time.

The common factor is not that Trump will back down when persuaded that he shouldn’t do something, but instead when satisfied that his chosen action has gone as far as it can go, for now. There is nothing to gain in trying to persuade him. In his own words, there are no concessions he’s after. Worse, the pretext for his executive order on tariffs is not well-supported by reality, and Trump’s other explanations have been a fantastical set of moving targets, from alleged trade deficits to border security and drug policy to access to our financial services sector to annexation.

Whatever it is he or his aides claim is the issue this time, it will be something else tomorrow and again the day after that. We have won a delay today, but we shouldn’t expect this is the end of it. In fact, you can be certain we will be at this for a while.

The Hub Staff

The Hub’s mission is to create and curate news, analysis, and insights about a dynamic and better future for Canada in a single online information source.

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