As a youth, I was deeply involved in politics. I even campaigned and appeared nationally on CTV in support of free trade during Prime Minister Brian Mulroney’s re-election campaign in 1988. Having lived on both sides of the border, I witnessed firsthand the benefits of the longstanding Canada–U.S. partnership, an alliance admired worldwide. Over the years, my political views have shifted in different directions, but one thing has remained constant – my belief in the value of free trade and cooperation. That’s why it has been both disheartening and infuriating to watch these benefits put at risk by the current US administration policies that distort the truth about trade’s impact. The relentless and unnecessary assault on Canada is as baffling as it is reckless, driven by greed and a stunning lack of understanding.
“Geography has made us neighbors. History has made us friends. Economics has made us partners. And necessity has made us allies.”
President John F. Kennedy
Many dismiss Trump’s aggressive stance toward Canada as just another round of his “economic poker,” believing it’s all part of a hardball negotiation strategy. The assumption is that once the dust settles, trade will return to normal, and Canada will remain a reliable partner. But this isn’t just a bluff. This is a fundamental shift in how the U.S. treats its closest ally, and the damage is already done.
Canadian businesses aren’t waiting to see how this plays out; they’re actively diversifying, strengthening trade ties with Europe and Asia to reduce reliance on an unpredictable U.S. Meanwhile, American industries dependent on Canadian imports are already feeling the strain, with rising costs and supply chain disruptions. Trust, once broken, is difficult to rebuild. If the U.S. continues to treat Canada as expendable, it may find itself watching from the sidelines as Canada moves forward without it.
The bigger issue is that this may end up hurting America more than Canada. We are a resilient nation, built on determination, with vast natural resources and a reputation for economic goodwill worldwide. While Canada strengthens its position through new partnerships, the U.S. could find itself struggling to replace a trading relationship it has taken for granted for far too long.
One thing that is true is Canadians are united in this like never seen before in modern history. In weeks, Trump managed to mobilize a nation to work together when our own politicians couldn’t for decades.
A Long History of Trading
Let’s start with a brief history lesson. Canada and the United States share a deep history of trade that stretches back centuries. Long before Canada was an independent nation…and while America was comprised of the Thirteen Colonies…robust exchanges took place: lumber, fur, and farm products were traded across the border. After the American Revolution, these economic ties only deepened, driven by a vast shared border and complementary natural resources.
“We too often talk about trade while using the vocabulary of war. In war, for one side to win, the other must lose. But commerce is not warfare. Trade is an economic alliance that benefits both countries.”
President Ronald Reagan
Over time, these early interactions evolved into formal agreements. The Canada–U.S. Free Trade Agreement (CUSFTA) marked a significant step by reducing taxes and tariff barriers, laying the foundation for further economic integration.
A Milestone: NAFTA
In 1994, the North American Free Trade Agreement (NAFTA) expanded this partnership by including Mexico alongside Canada and the United States. NAFTA quickly became one of the world’s largest trade deals, dramatically boosting cross-border commerce. While critics argued it contributed to job losses in certain sectors, numerous studies have shown that it spurred innovation, helped businesses grow, and kept prices lower for everyday products.
After more than two decades, the need for modernization led to the United States–Mexico–Canada Agreement (USMCA) in 2020. This updated framework largely retained NAFTA’s successful structure while incorporating new provisions on digital trade, fair wages, and environmental standards. However, if an administration were to dismantle these gains by raising tariffs or attempting to force a unilateral economic reordering decades of progress could be undone almost overnight.
Major Economic Benefits for Americans
Canada: A Key Market for U.S. Exports
Canada is one of the largest buyers of American goods, ranging from automobiles and electronics to agricultural products. This robust demand not only supports American companies but also sustains factories and creates jobs across the United States. In addition, Canada’s steady supply of natural resources…oil, gas, lumber, and minerals…provides essential raw materials that help American industries remain competitive and avoid the volatility of distant markets.
More Choices, Lower Prices
Without high tariffs between these two nations, American consumers enjoy lower prices on everyday items. This free flow of goods boosts consumer purchasing power and fosters a competitive market where innovation thrives. U.S. companies that depend on Canadian parts…from airplane manufacturers to computer chip makers…risk higher production costs and reduced global competitiveness if these trade ties weaken.
Modern trade agreements like the USMCA have created a more level playing field by promoting fair labor practices and higher wages. They also open doors for young professionals and students, particularly in tech and engineering, by encouraging cross-border collaboration and innovation. Canadian tech hubs…such as those in Toronto and Vancouver…offer a reservoir of talent that benefits American startups and established companies alike.
“Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.”
Prime Minister Pierre Elliott Trudeau
How Trade Shapes Society and Culture
Robust trade between Canada and the United States has long fostered cultural exchange. When companies operate across borders, their employees and customers engage in shared experiences that build mutual understanding. Artists, musicians, and filmmakers frequently cross the border, enriching the cultural landscape on both sides and reinforcing the bonds between the two nations.
While no trade agreement is perfect, modern deals typically include provisions for workforce retraining. These measures help workers transition into emerging industries, mitigating the negative impacts of global competition. Young people often bear the brunt of economic transitions. Open borders and free trade can create dynamic job opportunities in fields like technology and green energy. However, if drastic tariffs trigger a recession or if entire industries relocate, the prospects for young workers could diminish significantly. A stable and cooperative trade environment is essential for fostering economic opportunity and a culture of openness.
Tourism and Cross-Border Spending
Tourism is a critical, yet sometimes overlooked, pillar of the Canada–U.S. economic relationship. Canadians spent over $20.0 billion in the USA while US residents accounted for less than half those travel expenditures within Canada.
Recent protectionist rhetoric and aggressive tariff proposals have already had a tangible impact on tourism patterns. Uncertainty and negative messaging around U.S. trade policies have led many Canadians to cancel or postpone trips to the United States. This shift not only stems from fears of higher costs due to currency, tariffs and disrupted supply chains but also from broader concerns about the stability of the U.S.–Canada relationship and a desire to “punish” the current administration.
For Canadian visitors, the U.S. remains a popular destination, renowned for its diverse attractions…from major urban centers to natural wonders and theme parks. However, political decisions that undermine trust have made leisure travel a casualty of economic uncertainty. On the American side, reduced Canadian tourism significantly impacts local businesses in border states, which rely on these visitors for vital revenue and employment support.
It is a people-to-people exchange that drives local economies, fosters cultural understanding, and strengthens the overall partnership between the two nations. It’s been damaged already.
Security and Political Factors
Military Partnerships
The economic ties between Canada and the United States extend into the realm of defense. For decades, organizations like the North American Aerospace Defense Command (NORAD) have shown the deep security cooperation between the two countries. Both are also active participants in NATO, also showing their shared commitment to mutual defense.
However, if the U.S. signals that it might withdraw from its military alliances or suggest it would not come to Canada’s aid in the face of threats from rivals such as China or Russia, the long-standing trust between the nations could erode. This is not mere rhetoric; weakening these bonds would have tangible, adverse effects on national security and cooperative intelligence sharing.
Public Opinion and Political Rhetoric
Political discourse around “protectionism” often oversimplifies complex economic relationships. While some leaders argue that drastic measures are necessary to protect domestic jobs, many economists warn that dismantling established trade agreements would lead to higher prices, job losses, and a diminished global reputation for the United States.
“If you think that threatening and insulting us is going to win us over, you really don’t know a thing about us.”
Prime Minister Jean Chrétien
This statement reflects the deep-rooted trust that has been built over centuries…a trust that could be shattered by reckless policy.
Dangers of Breaking Ties with Canada
Immediate Economic Shock
If the United States were to suddenly impose steep tariffs on Canadian goods or withdraw from agreements like the USMCA, Canada would likely respond in kind. This tit-for-tat escalation could quickly drive up prices for American products in Canada and disrupt industries that rely on seamless cross-border supply chains. Already, markets have shown signs of volatility whenever such threats emerge.
If Canada were to cut off trade entirely, the consequences would ripple through nearly every major sector of the U.S. economy, hitting industries that depend on Canadian resources and materials the hardest.
Automotive Industry Collapse: American car manufacturers depend on Canadian-made parts, with components crossing the border multiple times during production. If trade were cut off, factories would shut down, leading to widespread layoffs and price increases. Consumers would face fewer affordable options, and manufacturers might move production to other countries, further gutting the U.S. auto industry.
Agricultural Disaster: U.S. farmers rely on Canadian potash for fertilizer, and without it, soil fertility would decline, leading to reduced crop yields and food shortages. Grocery prices would surge, and farmers already struggling with market instability would face financial ruin. Retaliatory tariffs from Canada on American agricultural exports would further cripple rural economies.
Lumber and Housing Crisis: The U.S. relies heavily on Canadian lumber for home construction. Without it, lumber prices would soar, making housing even more unaffordable. Home construction projects would stall, layoffs would spread across the industry, and mortgage rates would skyrocket, pushing more Americans out of the housing market.
Energy Price Surge: Canada is the largest foreign supplier of oil to the U.S. If Canada redirected its exports to Europe or Asia, U.S. fuel prices would spike, impacting transportation, shipping, and everyday living costs. Higher gas prices would hit American consumers hard and drive inflation across multiple industries.
Electricity and Power Shortages: The northeastern U.S. depends on Canadian hydroelectric power, while American nuclear plants rely on Canadian uranium. If Canada cut off these energy supplies, electricity prices would climb, and major U.S. cities could experience power shortages, disrupting both businesses and households.
Pharmaceutical Supply Chain Disruption: Canada provides key raw materials and active ingredients for U.S. pharmaceutical production. A trade cutoff would lead to shortages of essential medications, including insulin, antibiotics, and cancer treatments. Healthcare costs would rise, and patients who rely on lower-cost Canadian prescriptions would face higher out-of-pocket expenses.
Retail and Consumer Goods Shortages: Many everyday products, from clothing to electronics, include Canadian-sourced materials. A halt in trade would lead to empty shelves, increased prices, and job losses in retail and logistics. U.S. businesses dependent on Canadian imports would struggle to find alternative suppliers, causing further economic strain.
Rail and Freight Transport Slowdown: The U.S. and Canada share an extensive rail and trucking network that moves goods between both countries. A trade collapse would severely disrupt freight transport, causing supply chain delays that would impact manufacturers, retailers, and consumers. The resulting bottlenecks would push up costs and slow down economic growth.
Tourism and Hospitality Industry Collapse: Canadian visitors spent over $22 billion in the U.S. which is nearly double what Americans spent in Canada. Many Canadians have already canceled U.S. travel in response to protectionist policies. If tensions worsen, border towns and major tourist hubs will feel the strain as hotels, restaurants, and attractions see declining revenue and job losses.
Defense Manufacturing and Security Concerns: Canada supplies materials and components used in U.S. military equipment, including fighter jets and advanced weaponry. A trade war could delay defense production, weaken military readiness, and force the U.S. to seek more expensive, lower-quality alternatives from less stable suppliers, jeopardizing national security.
While Canada would also feel the pain of severing trade ties, it has spent years expanding its markets beyond the U.S. The United States, by contrast, has taken its northern neighbor for granted. If Canada decided to move on, America would be left struggling to fill the gap…and it wouldn’t be easy.
Long-Term Fallout
A prolonged breakdown in trade relations would compel companies to seek more stable partners elsewhere. Once operations shift, regaining that footing becomes extremely difficult…costing jobs and undermining American competitiveness. These repeated breaches of trust will undoubtedly tarnish the U.S.’s reputation in international negotiations, making future partnerships harder to secure. While this emphasizes the scale of the trade deal, it also highlights the risks: unraveling such a massive framework could trigger severe economic consequences.
“The agreement will govern nearly $1.2 trillion in trade, which makes it the biggest trade deal in the United States’ history.”
President Donald Trump
Worst-Case Scenarios: What the U.S. Stands to Lose
Complete Withdrawal from Trade Deals
If the U.S. were to completely pull out of the USMCA and other trade agreements, tariffs would spike and disrupt the flow of goods. Such a shock could trigger a broader recession, force major companies to relocate, and reduce American influence in critical sectors like technology and clean energy. Future partners will be wary of engaging with a nation that habitually abandons its trade commitments.
A Full-Blown Trade War
A trade war between the U.S. and Canada would be damaging for both sides, but the U.S. might suffer more. Canada could target key American exports, hitting industries that are already vulnerable, while American companies reliant on Canadian resources would face skyrocketing costs…leading to layoffs and relocations. This erosion of trust would further complicate future negotiations in areas beyond trade, including defense and energy.
“The United States remains Canada’s most important ally, closest friend and largest trading partner.”
Prime Minister Stephen Harper
In a scenario where trade is completely shut off, both nations would face severe hardship, but the United States is likely to hurt more. The U.S. economy depends on a complex, vast network of supply chains—ranging from agricultural inputs like potash to high-tech components and raw materials—which means that even a brief disruption could have wide-ranging and cascading effects. Meanwhile, while Canada would also experience significant economic pain, its smaller and more nimble economy would adapt faster by seeking alternative trade partners. In the “survival game,” the scale and complexity of the American economy make it more vulnerable to a complete severing of trade ties.
Damage to Defense and Joint Security
Economic instability tends to ripple into the security domain. If Washington signals that it will no longer uphold its longstanding military alliances, Canada may be forced to reassess its security strategy…potentially seeking new alliances or significantly increasing its defense spending. This breakdown in coordination could leave both nations more exposed to emerging threats, from cyber-attacks to conventional military challenges.
The Canada–U.S. trade relationship in decline
The Canada–U.S. trade relationship has evolved over centuries…from modest colonial exchanges to sophisticated frameworks like NAFTA and the USMCA. These agreements have delivered tangible benefits: lower consumer prices, job creation, cultural exchange, and strong defense cooperation. Yet the recent push for extreme protectionism and aggressive rhetoric threatens to undo decades of progress.
While political leaders may present drastic measures as necessary to protect domestic interests, the evidence suggests such actions would backfire—raising costs for American consumers, disrupting key industries, and diminishing the U.S.’s standing on the global stage. In an increasingly interconnected world, the best path forward is to resolve differences through measured negotiation and cooperation, rather than through policies that risk severing the bonds that have made North America one of the most prosperous and secure regions on Earth.
Canada and the United States share more than just a border; we share a history of resilience, collaboration, and mutual support that has shaped the modern world. From standing side by side in times of war to building the largest trade relationship on the planet, our partnership has been defined by trust and shared prosperity. That foundation is now being tested, but it does not have to be permanently fractured.
Moving forward, both nations must recognize that their economic and security futures are deeply intertwined. Instead of threats and division, we should focus on strengthening our partnership, modernizing trade agreements where necessary, and reaffirming our commitment to each other as allies. The alternative is a fractured North America where economic uncertainty breeds instability. It serves neither country’s interests. It’s time to put this manufactured trade dispute behind us and work toward a future where cooperation, not conflict, defines the relationship between Canada and the United States.
This article is based on a range of Stanford University sourced studies, economic analyses, and historical records regarding the Canada–U.S. trade and defense relationship, along with verified statements from leaders on both sides of the border.
