What Trump’s Victory Could Mean for Canada
The relationship between Canada and the United States is one of the closest in the world, defined by shared values, a lengthy border, and extensive trade links worth over a trillion dollars. When Donald Trump won the presidency, Canadian Prime Minister Justin Trudeau quickly offered congratulations, but the two nations’ relationship is far from smooth, with challenges ahead.
Here’s a look at how Trump’s re-election could impact Canada, America’s northern neighbor.
Canada-U.S. Diplomatic Relations
In the hours following Trump’s victory, Canadian leaders were cautiously optimistic. Prime Minister Trudeau expressed eagerness to collaborate with Trump, acknowledging the increasingly complex global environment. The two leaders have worked together before, notably during the renegotiation of the USMCA, the North American trade agreement.
However, their relationship hasn’t always been harmonious. Trump has criticized Trudeau in harsh terms, calling him a “far-left lunatic” and “two-faced,” while Trudeau mocked Trump during a 2019 NATO summit. With Canada’s political future uncertain—Trudeau faces a potential snap election due to his party’s slipping popularity—this could complicate Canada’s diplomatic efforts with the Trump administration in the short term, said former diplomat Louise Blais.
Deputy Prime Minister Chrystia Freeland acknowledged that many Canadians might feel unsettled but emphasized the deep-rooted ties between the two nations. She reassured citizens that Canada would remain secure and prosperous, even amid these political shifts.
Trade and Economic Impact
Trade between Canada and the U.S. is a cornerstone of both economies, with Canada exporting about 75% of its goods and services to its southern neighbor. Trump’s past threats of tariffs—such as a blanket 10% levy—could severely impact Canada’s economy. Economist Trevor Tombe expressed concern over the potential consequences of such tariffs, including a possible $7 billion hit to Canada’s GDP and a devaluation of the Canadian dollar.
With economic growth already slowing in Canada, the country may struggle to absorb such shocks. The future of the USMCA is also uncertain, as the three countries must decide in 2026 whether to extend the agreement for another 16 years. Policy adviser John Dickerman suggested Canada could draw from its experience renegotiating the deal to address these concerns but may have to make concessions to navigate a more challenging trade relationship.
One area where this could play out is in Canada’s Digital Services Tax, a 3% levy on foreign tech giants like Google and Amazon. The previous Trump administration strongly opposed this tax, and experts expect Trump’s renewed leadership could amplify that opposition.
Defence Spending and NATO
Trump’s administration was vocal about its desire for NATO allies to meet defense spending targets. Canada, currently spending 1.29% of its GDP on defense, has committed to reaching the alliance’s target of 2% by 2032. However, former U.S. Ambassador Kelly Craft has called this timeline insufficient, stating that Trump would demand more immediate action.
To meet these expectations, experts like Louise Blais suggest Canada might need to get creative, leveraging its natural resources—especially critical minerals—in support of defense initiatives.
Border Security and Migration
Trump’s stance on immigration and his previous threats of mass deportations raised concerns in Canada, especially regarding the shared border. Although there was a significant increase in asylum seekers crossing into Canada through unofficial points like Roxham Road during Trump’s first term, the countries have since closed a loophole in their border agreement. Still, some individuals continue to attempt illegal crossings.
Freeland assured Canadians that Canada’s border security remains a top priority, and any potential challenges would be addressed in close collaboration with U.S. officials. With over 5,500 miles of unguarded border between the two nations, the issue of enforcement remains complex.
Conclusion
Trump’s victory could bring both opportunities and challenges for Canada. The two countries share a deep economic and diplomatic bond, but political, trade, and defense differences could create friction. Canada will need to navigate these hurdles carefully, with a focus on maintaining its sovereignty while working closely with its powerful neighbor.
