US President Donald Trump has mused about destroying Canada’s economy as a prelude to annexing the country and making it America’s “51st state.” Trump threatened to increase tariffs on Canadian products after seeing an anti-tariff TV advertisement sponsored by the government of Ontario.
Most Canadian goods entering the US remain tariff-free, provided they comply with the Canada-US-Mexico Free Trade Agreement (CUSMA). However, that agreement is under review in 2026 and was being renegotiated before Trump’s outburst led him to suspend the talks. The American ambassador to Canada, Pete Hoekstra, regularly threatens and insults Canadians.
Canadians are anxious about the US as it declines into authoritarianism and government-sponsored racism. A president willing to unleash the National Guard on American cities, ignore judicial orders, use the Justice Department to pursue his political opponents, assault and corrupt American higher education, execute people in international waters and attack the liberal democratic foundations of the state may indeed use the US military against Canada.
Canadians have discussed how to organize insurrections against American military invaders and even suggested establishing a nuclear deterrent against American aggression. Unlike many American allies, such as Japan, South Korea and the European Union, Canada has resisted capitulating to American bullying.
Prime Minister Mark Carney declared that Canada’s previous relationship with the US is over. He wants to diversify Canadian trade to reduce the country’s overwhelming dependence on the American market. Over the next ten years, Carney wants Canada to double its non-American trade.
There has been some notable progress. Canadian interprovincial trade barriers are coming down. Foreign investors are paying attention. The United Arab Emirates plans to invest US$1 billion in Canadian critical minerals development and a further $70 billion in Canada over the long-term. Sweden’s SAAB has pledged to invest in Canada’s aerospace industry if Canada chooses Sweden’s Gripen fighter jet for its defense.
Carney has announced “nation-building projects” to strengthen Canada’s economic and technological independence. Canada aspires to develop its resources into higher-quality products at home, rather than simply exporting them.
It remains to be seen how successful Canada’s measures will be. Carney’s “nation-building” includes exporting fossil fuels, especially to Asia, apparently ignoring the realities of climate change (despite massive wildfires every year in Canada), fomenting political tension at home and being oblivious to burgeoning global electrification as Chinese renewable energy technologies spread through the Global South and into Europe. The government is relying on the private sector to further its agenda. So far, the private sector has been a fickle partner.
Canadian trade diversification depends on strengthening economic relations with the rapidly growing states of Asia. Canada signed a Comprehensive Economic Partnership Agreement with Indonesia, its first with an ASEAN state. Canada is considering buying submarines from South Korea.
Canada has tried to reset its tense relations with China and India. Good relations with China, in particular, are necessary if Canada is to fully benefit from Asia’s economic and technological expansions.
However, Canada’s efforts at diversification are threatened by the Trump administration’s stated intention of dominating the Western hemisphere. The new US National Security Strategy (NSS) asserts a “Trump corollary” to the Monroe Doctrine.
The US intends for the entire hemisphere to serve the resource and economic needs of the American hegemon. The best jobs and industries will be reserved for the US alone. The US intends to monitor neighboring states’ trade relations with states outside the region. American violence against Venezuela and interference in Honduras, Argentina and elsewhere speak to this crude ambition.
Article 32.10 of the Canada-US-Mexico Free Trade Agreement (CUSMA) gives the parties a veto over their partners entering free trade agreements with a “non-market country”, a measure targeting China.
When CUSMA negotiations eventually resume, the US will try to lock Canada into the dependent relationship Canada is trying to break by blocking Canada’s economic relations with China. This situation is presaged by Mexico’s current plans to impose up to 50% tariffs on Chinese and other Asian imports.
If Canada is cut off from China, it will be deprived of access to a vital and innovative economic and technological powerhouse at the heart of Asia’s economic development. China leads in most of the world’s cutting-edge technologies. As the US dismantles its Department of Education, undermines its universities and makes its population sicker and more vulnerable as it wages war on science, China surges ahead in educating scientists and engineers.
In 2024, Canada levied 100% tariffs on Chinese electric vehicles (EVs) to align with the Biden administration. China retaliated against Canadian agricultural and seafood products. The Trump administration has declared it intends to strip the auto industry out of Canada, leaving only dregs behind.
Some auto manufacturers have moved their Canadian production to the US. However, the North American auto industry cannot compete with Chinese EVs. It will probably end up moldering behind protectionist trade barriers. Why should Canada support an uncompetitive industry that the US is determined to take?
Canada is reviewing its EVs tariffs. Allowing Canadian consumers access to high-quality, low-cost Chinese cars would help Canada reach its faltering climate change goals and open the possibility of collaboration with Chinese EV manufacturers. Chinese markets would re-open to Canadian food products.
All of these possibilities are threatened by the new American NSS. If the US successfully chains Canada and the Western hemisphere to its economic interests and political whims, the entire region will be sucked down as the American empire sinks.
Trump’s economy is weak and showing increasing strain. Small businesses are cutting jobs. American consumer spending is increasingly driven by the wealthy few, while the majority of Americans get more desperate. The entire economy is relying on an AI bubble that may burst at any moment.
An American economic crisis that shatters US hegemony would hurt Canada but may weaken the US enough to prevent it from blocking Canada’s long-term goals and strengthen the imperative for Canada to diversify its economic and political options. But what is clear is that the only existential threat Canada faces is from the United States.
Shaun Narine is professor of international relations and political science at St Thomas University in Fredericton, New Brunswick.