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What to expect when you’re expecting Trump 2.0? Can he live up to the great expectations he set and alleviate the grave concerns? Let’s spell it out, in true T.R.U.M.P. style.
1. Tariffs and Taxes
Expectation: Donald Trump will quickly ratchet up his America First tariffs policy, potentially slapping 10% to 20% tariffs on all goods coming into the United States — and much higher duties on goods from China, especially cars. The bet is that this will stimulate job growth in the United States and stop the hollowing out of manufacturing caused by globalization and free trade. The Trump promise: Tariffs are “not going to be a cost to you, it’s a cost to another country.”
Concern: In reversing decades of Republican free trade policy, expansive tariffs will drive up the cost of goods for US consumers and increase inflation, as 16 Nobel prize-winning economists wrote in June. The Peterson Institute for International Economics — an independent nonprofit research group — wrote a paper arguing that Trump’s tariffs and tax cuts will push inflation up four points higher by 2026 than it would otherwise. Make America expensive again is one way to see it.
To counteract that, Trump will extend the major tax cuts which he put forward in 2017 and are set to expire next year. That will keep stimulating the economy alongside new tax cuts for corporations and individuals, but it won’t be enough to stop inflation. It also raises another concern: deficits.
According to studies like this one from Wharton, Trump’s deficits could reach between $3 and $7 trillion, up from $1.83 trillion today. “We project that conventionally estimated tax revenue falls by $5.8 trillion over the next 10 years, producing an equivalent amount of primary deficits. Accounting for economic feedback effects, primary deficits increase by $4.1 trillion over the same period,” the Wharton report says.
What will Trump do with big industrial policy programs like Biden’s Inflation Reduction Act, which so far has provided over $240 billion in spending and has earmarked another $60 billion for various green industries? Kill it and rescind all the unspent dollars. “To further defeat inflation,” he said recently, “my plan will terminate the Green New Deal, which I call the Green New Scam.” For the green tech world and industries like wind, solar, and even electric cars, this will be a major setback. There will be quick deregulation for oil and gas companies, and new and fast “drill, baby, drill” offshore leases will open up, along with more fracking and pipelines. Not all tax credits from the IRA will be removed, but support for buying EVs will. Expect this to be where Elon Musk makes a dramatic impact.
Prediction: Trump acts fast on some tariffs but not all. He will get a lot of internal pushback as members of his party worry that a series of international trade wars will be triggered, hammering their crucial exports and hurting their economies. Biden will scramble to get the Inflation Reduction Act money out the door, but I am already hearing reports that departments are freezing funds to prepare for the new administration.
2. Retaliation and Revolution
Expectation: With a strong mandate, Trump will have few checks and balances to stop him from taking action against those he has labeled “enemies of the people” or “the enemy within.” What’s more, Trump believes the Supreme Court has given the president total immunity from prosecution for actions undertaken as commander in chief.
An NPR investigation lays out over 100 threats that Trump has made in the last few years, ranging from prosecuting political opponents like President Joe Biden to taking away licenses from news outlets like CBS, NBC, and ABC.
Concern: Trump will try to dismantle what he calls the “Deep State” by reviving his infamous “Schedule F,” which would allow him to fire bureaucrats he doesn’t like and hire ones who agree with his policies.
Trump’s new team is much more experienced and ready than they were in 2016, and the agenda for a radical overhaul of the US government will be led by folks like Elon Musk and Robert F. Kennedy Jr. While there will be massive deregulation, the biggest concern will be a government that launches investigations into any group that challenges its policy.
Prediction: Mass layoffs in the federal government, overhauls of the Department of Education and the FBI, and legal challenges with multiple news organizations.
3. Ukraine
Expectation: While lame-duck Biden will try to get as much money and material to Ukraine before January, Trump will cut it off and try to force a peace. He promised to end the war within 24 hours and to do that he would have to force Ukraine to cede a massive amount of territory to Vladimir Putin.
Concern: NATO allies are in no shape to fill the US gap in aid. Without US assistance, Russia — now with the support of North Korean troops — will start to grab more land. How far will they go before they make a deal? That is up to Trump, but it is bad news for Ukraine.
Prediction: The war grinds on for a year, but eventually Ukraine — running low on equipment and money – will be forced to give up huge swaths of territory in the east. Putin has waited out the US and now has a sympathetic ear in the White House.
4. Mexican Border and the Middle East
On the Mexican border
Expectation: Trump will rapidly end birthright citizenship and begin a massive deportation program of up to 20 million people, which will require building detainment camps. Also, expect the so-called Muslim ban on certain countries to be revived from his first term.
Concern: Besides the key questions about the legality, morality, and practicality of mass deportations, there is the economic impact.
The American Immigration Council wrote a study saying that the deportation program would cost over $315 billion and be extremely difficult to manage. At the height of deportation efforts in recent US history, the country deported approximately half a million people in a single year — and most of those were turned away as they tried to cross, rather than being forced out of the country after they had settled. The long-term impacts of mass deportation on the US economy could add to a crisis. “Due to the loss of workers across U.S. industries, we found that mass deportation would reduce the U.S. gross domestic product (GDP) by 4.2 to 6.8 percent,” according to the AIC. “It would also result in significant reduction in tax revenues for the U.S. government. In 2022 alone, undocumented immigrant households paid $46.8 billion in federal taxes and $29.3 billion in state and local taxes. Undocumented immigrants also contributed $22.6 billion to Social Security and $5.7 billion to Medicare.”
Prediction: This is a core promise of the Trump 2.0 administration, and despite the fury this will cause, deportation programs will be set up quickly.
On the Middle East
Expectation: Trump is a strong supporter of the policies of Israeli Prime Minister Benjamin Netanyahu and his fight against Iran and proxies Hamas and Hezbollah. Trump will tell Bibi that he has a clear road ahead to finish the war — though what that means strategically remains unclear — but he will likely demand that the heavy fighting stop before the inauguration. Trump wants to fulfill his promise to end the war in Gaza and, in the process, defeat Iran’s Jihadist allies and ambitions.
Trump’s greatest foreign policy accomplishment in his first term was the Abraham Accords, in which both Bahrain and the United Arab Emirates recognized Israel’s sovereignty and established full diplomatic relations. Could his hard line on Iran build on this and turn the terrible war into a larger peace? That is the hope.
Concern: The biggest issue is that Trump’s unfettered support for Netanyahu will encourage Bibi to double down on his most aggressive strategic goals and undermine any possibility for a two-state solution by continuing massive bombardments in Gaza and Lebanon and by moving more settlers into the West Bank. It could trigger a major war with Iran and light up the entire region. It could also push the Iranians to finally build a nuclear bomb, which would incentivize the US to take military action.
Prediction: The war ends before Trump’s inauguration, but there is no plan for what comes next. Who governs Gaza or southern Lebanon? What is the plan for any rebuilding? What happens to the refugees? The hostages? The festering wounds of this bloody war are not going away soon, and expect ongoing protests in the US and around the world. Other terror groups, like the Houthis in Yemen, will continue to upend any attempt at peace. Worst-case scenario, the war on the battlefield turns into asymmetric terror attacks around the world. Things will get worse before they get better.
5. Pomp and Partisanship
Expectation: 2026 marks the 250th year of the great American experiment in democracy, and Trump has planned for a yearlong celebration that will include parades, a full-year US fair in Iowa, and multiple other events.
This will be the ultimate American and MAGA moment, twinning his remarkably resurrected political movement with the key US anniversary. The Trump dynasty will be tied to the American destiny.
Concern: This year would be celebrated by any president, so there is no over-concern in principle, but President-elect Trump is also the commander in chief of the culture war against what he calls wokeness. The culture war has animated his entire movement and its loudest proclaimer, Tucker Carlson. Expect these celebrations to reflect the administration’s values and to be strategically allied with the anti-woke messaging that has been so divisive across the country.
Prediction: Great parties in places like Iowa, increased tourism, and probably a military parade in Washington, which Trump has always wanted — but also big controversy. In a country where athletes quietly kneeling during the singing of the national anthem before a football game can become a major battle in the culture wars, there is a real risk that partisan politics will turn a year of unity into one of deep divisions. Let’s hope not.
A water treatment pond at the McKay River Suncor oil sands in-situ operations near Fort McMurray, Alberta, as seen in 2014.
Canada’s oil and gas industry is the country’s top pollution emitter, and critics, including Environment and Climate Change Minister Steven Guilbeault, say it’s not doing enough to reduce emissions.
The draft regulations are a step forward in the fight against climate change – and fighting words. Alberta Premier Danielle Smith, who leads a province dominated by the oil and gas industry, said she was “pissed” about the proposed regulations and vowed to challenge them in court. She also claimed Guilbealt “has a deranged vendetta against Alberta.” Predictably, the oil and gas industry also opposes the rules.
The Liberals are staking their claim on the climate file ahead of the 2025 election, which is due by October 2025. Conservative Party leader Pierre Poilievre, who is up in the polls by about 20 points, says he’ll scrap the regulations, which means the Liberal plan faces long odds against seeing the light of day.
The Port of Vancouver, in British Columbia, where the International Longshore and Warehouse Union Local 514 members are locked out amid a labor dispute.
The economic costs of the deadlock will add up quickly. Roughly US$800 million in goods pass through the West Coast ports every day, including a fifth of cross-border US-Canada trade. Past port strikes have snarled exchange, gummed up supply chains, and frustrated businesses and consumers alike. This one threatens to do the same.
The strike puts the governing Liberals in an awkward position. The government wants to keep commerce flowing but is hesitant to step in and force a resolution, perhaps with legislation ordering workers back to work. The New Democratic Party, on whom the Liberals rely to remain in power, is against circumventing the collective bargaining process, which means the port strike isn’t the only showdown to watch.
For now, Labour Minister Steve MacKinnon is urging the parties to strike a deal at the bargaining table and says federal mediators are “on site, ready to assist the parties.”Sarah McBride, Delaware state senator and candidate for United States Representative, speaks to a voter outside of a coffee shop in Wilmington, Delaware, on Oct. 26, 2024.
The United States has elected its first openly transgender member of Congress. On Tuesday, Democrat Sarah McBride, a state senator from Delaware, won the state’s at-large seat in the House of Representatives. The seat has been a reliable win for the Democrats, but McBride won a competitive primary.
Her win comes against the backdrop of a Trump campaign and broader Republican anti-transgender push, including tens of millions of dollars in advertising. In recent years, Congress and state legislatures have advanced bills to restrict transgender health care, limit the discussion of transgender issues in schools, and block transgender athletes from participating in organized sports.
The Republicans secured the White House and Senate on Tuesday and may end up winning the House. The Trump administration and Congress could then further push for anti-transgender legislation, a fight into which McBride may be drawn front and center.
Trump has promised to ask Congress to ban the registration of any gender at birth except male or female and to repeal the transgender Title IX protections enacted by the Biden administration.House of Commons in the Canadian Parliament building in Ottawa, Ontario, Canada.
The government has provided initial documents on the program, but the Conservatives want more handed over to the Commons so they can share them with federal police. The government argues sharing more documents would be illegal and prefers that the matter be studied by a House committee.
Why it matters? Since the Conservative demand falls under parliamentary privilege, most House business is on hold until it’s resolved. But the government can’t end the stalemate without the support of at least one other opposition party, the NDP or Bloc Quebecois, to join them in ending the showdown. But neither wants to do so.
The Conservatives are happy to let the scandal drag on, delaying the government’s agenda and painting them as crooked ahead of a federal election that’s due by October 2025. The showdown indicates an increasingly dysfunctional legislature and weak government, and it suggests that the coming months won’t be as productive as the Liberals would hope – and the country would expect.
The foreign-born populations in the US and Canada have been steadily rising for decades. Both are countries of immigrants, with millions upon millions arriving on their shores from distant lands over the centuries, and this is ingrained into their national identities. But polling shows that in recent years a majority of Americans and Canadians want to see less immigration — including legal immigration.
Politicians have taken notice. President-elect Donald Trump has made curbing immigration a central aspect of his platform and has pledged to conduct mass deportations of undocumented immigrants once he takes office.
Prime Minister Justin Trudeau also recently took steps to reduce the number of new immigrants coming into Canada. “Immigration is essential for Canada’s future, but it must be controlled and it must be sustainable,” Trudeau said late last month.
Are these trends driven by xenophobia or a product of people feeling financially vulnerable and concerned that more immigrants will place strains on the economy? Or is it both? We would love to hear your thoughts!
Donald Trump is returning to the White House. Winning the presidency, along with control of the Senate and possibly the House of Representatives, means Republicans have a long runway for policy reform — which is making Canada nervous as the Trudeau government stares down possible challenges from the next administration on trade, defense, immigration, and more.
Trump’s tariff threat looms large
Sitting atop Canada’s pile of worries is Trump’s threat to impose a minimum 10% tariff — and possibly as high as 20% — across the board on US imports, which would drive consumer prices higher in the US and could cost Canadian trade partners billions. Canada will try to finagle an exemption, but there is no guarantee it’ll succeed.
If slapped with tariffs, Canada may be forced to retaliate with its own protectionist measures, ensuring a trade war. Roughly CA$3.6 billion in goods move across the border daily, and nearly 80% of Canada’s exports go stateside.
But tariffs aren’t the only trade concern. Trump, who views trade agreements through the lens of zero-sum power politics, says he will (once again) negotiate the US-Mexico-Canada free trade agreement, which comes up for review in 2026. During his first term, the Republican leader replaced the North American Free Trade Agreement with USMCA, which caused considerable headaches for the Trudeau government. Canada made concessions during the renegotiation, including increased market access for the US to Canadian dairy and stricter rules of origin for automobiles — criteria to determine if enough North American production has gone into a vehicle to grant it preferential tariff treatment. During the process, Trump called Justin Trudeau “two-faced” and a “far-left lunatic.”
Pressure to spend, border woes, freshwater demands — oh my!
Canada will also face growing pressure from the Trump administration to increase its defense spending and NATO commitments.
Days ago, former US Ambassador to Canada Kelly Craft gave a sense of just how urgent the spending boost might have to be. This summer, Canada released a plan to grow its share of defense spending to the NATO target of 2% of GDP by 2032. Craft says that’s not fast enough. But to hit that target, Canada would have to doubleits defense spending in the next seven to eight years, which might be tricky if the country is hurting from a trade war with its biggest trading partner.
During the election, Trump also said he would begin a program of mass deportations. The costly idea is a stretch, but as the CBC’s Evan Dyer argued in July, even the notion of such a program could cause problems for Canada, with concerned migrants in the US moving north ahead of a possible deportation blitz.
During the first Trump administration, and into the Biden administration, a growing number of irregular crossings were a challenge, leading to a renegotiated border deal in 2023, which tightened border security.
Trump has also talked about going after Canadian freshwater to solve US water shortages. Canada is one of the world’s largest sources of freshwater — with roughly 20% of the global total. Trump has floated the idea of diverting Canadian water to the US, particularly to drought-prone California.
The president-elect recently touted the idea on Joe Rogan’s podcast, and in September, he said British Columbia has “essentially a very large faucet” that could be turned on “one day” to divert water flows south to California. But there isn’t that much spare water to divert, and the flows are already governed by the Columbia River Treaty — another deal that might be up for (further) review.
All public smiles and reassurances, for now
The first Trump administration was rough for Canada, and the Trump-Trudeau relationship was … not warm. In January, Trudeau warned that a second Trump presidency would be “a step back” for Canada. “It wasn’t easy the first time, and if there is a second time, it won’t be easy either,” the prime minister said.
Indeed it won’t. Some in Canada may be hoping the pain won’t arrive until the 2026 free trade renegotiations, but that’s probably wishful thinking.
“The headaches may come much sooner than the USMCA negotiations," says Gerry Butts, vice chairman and senior adviser at Eurasia Group. “Trump’s immigration and tariff policies will put pressure on an already strained Canadian consensus about immigration and cause swift damage to the economy.”
Nonetheless, Trudeau was quick to congratulate Trump on his second win, emphasizing that the relationship between the US and Canada is “the envy of the world,” and saying, perhaps more in hope than in anticipation, that he knows he and Trump “will work together to create more opportunity, prosperity, and security for both of our nations.”
Canadian Foreign Minister Mélanie Joly noted that Canada has been preparing for either a Democrat or Republican “for months” through networks in the US and globally. She was joined by several Cabinet ministers who at least feigned hope that things would work out given the deep ties between the two countries.
Graeme Thompson, a senior analyst with Eurasia Group’s global macro-geopolitics practice, isn’t convinced the rosy picture the Canadian government is painting reflects reality. “Trump doesn’t care about historic ties; he couldn’t care less.”
Thompson says the relationship between the US and Canada is now as fraught as it has been in a century. But, he notes, Canada is still better off vis-à-vis the US than every other country in the world, which is something at least.
How to manage a forever crisis
The challenge for Canada now is navigating the second Trump administration, particularly as the Trudeau government, down in the polls, faces its own election a year from now — if not sooner.
Canadians prefer the Conservative Party leader over Trudeau when it comes to handling Trump, but for now, the job is Trudeau’s. The plan this time seems to be similar to last time: Rather than going all-in on the White House itself, Canada will work with the Trump administration by lobbying statehouses and governors, especially along the border states, along with Capitol Hill and industry. The government has also reestablished its Cabinet committee on US-Canada relations, chaired by Finance Minister Chrystia Freeland.
Thompson says Canada has an advantage in managing the Trump administration because of the country’s deep familiarity with the US and close connections nationally and at the state level. But history and expertise aside, there’s no guarantee there won’t be challenges and pain for Canada — especially on trade and defense — despite the rhetoric.
“It’s really hard to see how this is not more challenging than at any other time,” Thompson says. “I think that for the next four years, we can expect that any grievance or opportunity to take a hard line to gain something that presents itself, that’s the line the Trump administration will take.”