The carefully staged images of Prime Minister Mark Carney and President Donald Trump sharing coffee in the Oval Office masked a far more sobering reality for Canadian trade policy. What was billed as a breakthrough meeting represented not the beginning of meaningful negotiations, but rather the opening gambit in what promises to be the most consequential trade reckoning Canada has faced in a generation. The uncomfortable truth we must confront is this: our political and business elites remain dangerously unprepared for the hard compromises needed to protect Canadian interests in the Trump era.
President Trump’s penchant for theatrical distractions—from floating the absurd notion of Canadian statehood to dismissing our auto and aluminum exports—should not obscure his consistent, decade-long trade priorities. Since his 2016 campaign, his fixation has remained clear: repatriate manufacturing jobs to the Rust Belt at any cost. This isn’t mere political posturing; it’s cold electoral calculus. Having traveled extensively through Pennsylvania, Ohio, and Indiana, I’ve witnessed firsthand how the economic devastation of former factory towns created the conditions for Trump’s rise. His political survival depends on delivering for these communities, which puts Canada’s 1.3 million vehicle annual production squarely in the crosshairs.
The numbers paint a sobering picture of our vulnerabilities. Once ranked in the world’s top ten auto manufacturer, Canada has fallen to the eleventh position. Industry leaders warn that Trump’s proposed 25 percent tariffs would render domestic production economically unviable. Yet rather than developing contingency plans, Ottawa clings to nostalgic fantasies—as if earnest appeals to NAFTA’s legacy will sway an administration that views all trade through a zero-sum lens.
If Prime Minister Carney hopes to secure even modest concessions, he must first prepare Canadians for painful trade-offs. Our supply management system, which protects dairy, poultry and egg producers through restrictive quotas and tariffs, has long been a prime target for Trump negotiators. Similarly, the digital services tax‘s protectionist barriers and the Bank Act‘s treatment of foreign financial institutions inflame American grievances. While these policies may enjoy domestic political support, they have become unsustainable luxuries in an era where Washington demands strict reciprocity.
The alternative path—one we’ve been reluctant to contemplate—might follow Australia’s experience. When its auto industry collapsed in the late 1990s, predictions of economic catastrophe proved overstated. Today, Australians enjoy higher per capita wealth than Canadians, having successfully transitioned to mining, agriculture and service industries. This isn’t an argument for capitulation, but rather a plea for clear-eyed realism. If Trump follows through on his automotive threats, Canada needs a credible ‘Plan B’ that doesn’t involve pretending we can resurrect the 1965 Auto Pact through sheer force of nostalgia.
Prime Minister Carney’s solo diplomatic efforts, while symbolically important, remain woefully insufficient. He must urgently mobilize an unprecedented cross-border coalition—Canadian premiers engaging U.S. governors, business leaders lobbying Congress, and civil society groups highlighting economic interdependence in key swing states. The renegotiation of USMCA demonstrated this approach can work—when American agricultural interests feared losing access to Canada’s dairy market, they became powerful allies in watering down Trump’s more extreme demands.
Yet building such alliances requires acknowledging uncomfortable truths about our own economic mismanagement. Our natural resource sector—systematically weakened by a decade of regulatory paralysis and policy uncertainty—could have provided valuable leverage in these negotiations. Instead, we approach the bargaining table with atrophied energy infrastructure and an international reputation for anti-development zealotry. When President Trump boasts about American energy dominance, his claims expose our self-inflicted weaknesses.
History teaches us that successful trade negotiations require two essential elements: strategic clarity and domestic consensus. Former Prime Minister Brian Mulroney spent years preparing Canadians for the disruptive realities of free trade, building the political capital needed to secure a landmark deal. Prime Minister Carney, by contrast, appears trapped between Trump’s aggressive maximalism and his own party’s reluctance to confront powerful progressive interest groups. His vague rhetoric about “elbows up” diplomacy cannot mask the absence of a coherent strategy for these high-stakes negotiations.
The path forward offers no easy solutions. With the USMCA scheduled for review in 2026, Canada faces a binary choice: negotiate from a position of weakness now, or gamble on the possibility of a second Trump term. Either scenario demands something our political culture has conspicuously lacked—the courage to tell voters that the rules-based international order we cherish is being replaced by an era of transactional power politics.
The coming months will reveal whether the Carney government can rise to this formidable challenge. But one reality has become inescapable: in the age of Trump, nostalgia is not a strategy. Canada must either adapt to these new realities or resign itself to economic decline. The time for wishful thinking has passed; what we need now is clear-eyed leadership willing to make hard choices in the national interest.
Generative AI assisted in the production of this article.
