May 15, 2025
Incoming Prime Minister Mark Carney’s meeting was US President Trump last week was widely regarded as a success. Mr. Carney avoided a ‘Zelinski’ moment in the Oval Office, and was seen to have successfully fended off the US President’s 51st state rhetoric – for now.
But the disruptions that Mr. Trump has brought to Canada’s economic, environmental, trade and security relations have raised major questions about Canada’s future pathway with the US and the rest of the world.
In reflecting on these questions, three potential directions seem to have emerged.
The first would be to seek to deepen Canada’s economic and security integration with the US. These arguments, sometimes presented as a ‘grand bargain’ option, would accelerate the pathway Canada has followed in a North American context since the signing of the original Canada-US Free Trade Agreement in 1988. At its root, this option seems based on the notion that deeper integration will create a situation where the US can’t harm Canada without harming itself in at least equal measure.
The problem with this approach is that Canada is already deeply integrated with the US in economic and security terms through trade agreements like the North American Free Trade Agreement (NAFTA) and Canada-US-Mexico Agreement (CUSMA), and the North American Air Defence (NORAD) and NATO alliances.
The consequences of disrupting these relationships seem to have had no discernible deterrent effect on the behaviour of the Trump administration so far. It is unclear why deeper integration would produce better results. At the same time, Canada would be intensifying its economic and security dependency on an increasingly unstable and unreliable partner, and one which many see to be an irretrievable pathway to deepening economic, social, intellectual, political, and environmental decline. Some might even see the notion of deeper integration as a de facto surrender to Mr. Trump’s 51st state ambitions.
A second potential pathway might be to focus on our relationships with other nations and communities seeking to maintain some degree of a rules-based trade, security, and environmental international order, and looking to bypass an increasingly unstable United States. The European Union is an obvious potential leader of such a pathway, and there have been semi-serious suggestions that Canada should join the Union. Shared values around democratic governance, the rule of law, human rights, and the need to address biospheric threats like climate change could, provide the basis for a grouping among the other non-US members of the Organization for Economic Cooperation and Development, and like-minded nations.
China could be the other major potential participant in such a partnership. It has a strong interest in a stable international trade regime and has shown a willingness to engage around the climate challenge. At the same time, China’s expansionist ambitions and record of political interference represent serious political and security threats to Canada and other countries.
Although the Canada-Europe Trade Agreement (CETA) provides the foundation for a relationship with EU, it is also clear that the EU, and many other nations, tend to see Canada’s international economic role primarily as a geopolitically stable and secure provider of resource commodity exports, like ‘critical’ minerals in place of Russia. There is therefore, a serious risk of Canada being pushed in the direction of a double-down on the resource ‘staples’ export dependency trap that Canadian governments have sought to escape since before Confederation.
There would be other problems as well. Global markets for commodities like critical minerals are uncertain and in deep flux. As a relatively high-cost fossil fuel producer, Canada is unlikely to be among the last standing in a decarbonizing world.
A third option that has begun to draw attention would be for Canada, in the short term, to seek to stabilize its trade relationship with US on a sectoral basis. Vehicle manufacturing and parts are an obvious potential starting point in these terms, leading to an effective return to the pre-Canada-US Free Trade Auto Pact model of sectorally managed trade.
Such an approach would have to be matched with a net-zero economic strategy for Canada. Such a strategy needs to transform Canada's industries from producers of low-value raw materials into producers of higher-value products and services for a world that must decarbonize and advance sustainability. Efforts to expand rules-based trade, security, and environmental relationships with the EU, the rest of the Americas - beginning with Mexico - and other like-minded countries would need to be intensified as well.
In the end, such an approach needs to build systems that pay attention not just to the interests of international capital, but to those of people and the planet. A failure to do so will continue to feed the backlash against the social, economic, and environmental consequences of unfettered global marketization that has led to the emergence of populist authoritarians like Donald Trump.