December 15, 2025
Version Published in The Conversation, December 17, 2025
US President-elect Donald Trump’s November 25th tweet threatening to impose 25% tariffs on Canadian and Mexican exports to the United States, has thrown Canadian politics into a state of chaos not seen for decades. Rather than presenting a unified response to Trump’s threats, as had been done in the past, Canada’s responses have been profoundly fragmented. In the context of a weakened minority federal government, individual provincial premiers have sought to pursue what they perceive as their economic and personal political interests through the Canadian and US media. Some have even made direct approaches, uncoordinated with either the federal government or each other, to the incoming administration.
[Mexico, Canada’s putative trade partner and potential ally in dealing with the United States through the North American Free Trade Agreement (NAFTA) and the successor US-Mexico-Canada Agreement (USMCA) has been summarily abandoned, if not thrown under the oncoming Trump bus.
Ontario Premier Ford, trying to present a unified front on behalf of his fellow provincial leaders, found himself denounced by his colleagues over threats to cut off energy exports to the US if the Trump administration followed through on its threats. Alberta Premier Danielle Smith is [proposing to establish a team of “sheriffs” to patrol her province’s southern border independently of the federal government.
These improvised, fragmentary and contradictory responses will do nothing but encourage Donald Trump to engage in these sorts of threats and behaviours. That point has been repeatedly emphasized by members of Trump’s own previous (2016-2020) administration and others.
Canada needs to present a united front in dealing with the incoming Trump administration, and make effective use of the substantial negotiating assets it holds in this situation. There are serious doubts about the legal authority of a US President to actually implement the threatened tariffs without Congressional support. There the Republican majority in the House of Representatives may be down to a single vote due to Trump’s appointment of many sitting members to his administration, and the Republican hold on the Senate is almost as tenuous. The threat is also a flagrant violation of the USMCA, and earlier US-Canada Free Trade and NAFTA agreements. These agreements were designed, from Canada’s perspective, precisely to prevent the US from engaging in the sort of unilateral trade action that Mr. Trump is threatening.
Central to that bargain had been the concept that Canada would guarantee the United States access to its energy resources in exchange for the Americans being bound to a dispute resolution mechanism where trade issues arose, and not to engage in unilateral trade actions. Given the portion of US energy supplies, principally in the forms of oil, gas and electricity that flow from Canada, this provides an obvious point of leverage. Canada’s position in this regard has actually reinforced by the previous Trump administration’s agreement to remove the energy proportionality provisions contained in the original US-Canada Free Trade Agreement and the NAFTA, from the USMCA. These provisions had guaranteed Canada energy exports to the US.
In this context, Mr. Ford may have had the right idea in suggesting restrictions on Canadian energy exports to the US in retaliation for US tariffs. But he was too direct in his approach, suggesting outright export bans, a notion immediately rejected by his fellow premiers.
Ford's idea was even impractical for his own province, given Ontario’s relatively modest electricity exports to the US, and that those exports are essentially transactional and necessary for the management of the province’s own electricity grid. Specifically, there are times when Ontario needs to export electricity, sometimes at ‘negative’ prices, particularly when the output from Ontario’s inflexible nuclear power plants exceeds the province’s grid demand and needs somewhere to go.
That said, Trump’s threats do break the fundamental premises that have defined the Canada-US trade over the past four decades, and a response in the area of energy would be justified and strategic in that context. A more effective approach could be, rather than imposing direct export restrictions on Canada energy, to threaten a retaliatory charge on Canadian exports to the US of oil, gas and electricity. Such a charge would significantly increase energy costs in the US. An export charge could be applied directly by the federal government, by-passing the objections of provincial premiers and imposing a degree of unity on Canada’s approach.
The premiers, for their part, rather than engaging in their own ‘freelance' diplomacy, would do well to focus on engaging with their subnational counterparts in neighbouring states. In particular, they need encourage the governors of those states to emphasize to the incoming administration, and their Congressional representatives, the extent to which Trump’s proposed tariffs would do at least as much harm to their economies as Canada’s.
Ontario Premier Doug Ford is particularly well positioned to engage in this sort of subnational diplomacy. The level of integration between his province’s vehicle manufacturing sector, and the manufacturing economies of the formerly 'blue wall’ states that now lean Republican states around the Great Lakes mean that Trump’s tariffs would be enormously disruptive to economies on both sides of the border.
Nationally, Canada needs to recognize that the assumptions that have underlain the Canada-US trade relationship for the past forty years are in the process of being shattered buy a single, pre-inaugural tweet. If Canada is to avoid simply offering itself up as a fragmented and compliant resource colony of the United States, it needs to formulate a strategy that both leverages its assets with respect to the US, but also strengthens its wider economic and political alliances with the rest of the Americas, Europe and Asia.