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US President Donald Trump speaks during an executive order signing in the Oval Office of the White House in Washington, DC, on Feb. 10, 2025. He ordered a 25% tariff on steel and aluminum imports, escalating his efforts to protect politically important US industries with levies hitting some of the country's closest allies.
A Trump economy caution light begins to flash
US inflation rose to 3% in January, surpassing the expectations of many economists. This increase is driven at least in part by a sharp jump in egg prices, the result of an avian flu outbreak. But there may be other pressures at play that can create serious political challenges for President Donald Trump and two of his policy priorities.
Eurasia Group, our parent company, warned in its Top Risks report for 2025 that Trump’s use of tariffs would put upward pressure on the prices Americans pay for goods and services. When US consumers face fewer affordable options on many goods, the report warned, inflation will rise again, leaving interest rates higher and slowing growth.
But Trump’s immigration policy, which could deport up to 1 million people in 2025 and as many as five million over his four-year term, could be even more inflationary. Mass deportations, the report warns, “will shrink the US workforce, drive up wages and consumer prices, and reduce the productive capacity of the economy.”
If this forecast is correct, investors will put downward pressure on stock market performance in the coming months in anticipation that higher inflation will encourage the US Federal Reserve Bank to leave interest rates higher for longer — and perhaps even to raise rates late in 2025.
History shows that when inflation rises, stock prices fall, and interest rates are high, US presidents see a drop in their approval ratings. If the inflationary pressures reflected in January’s inflation numbers have staying power, and tariffs and deportations really do make inflation much worse and send Trump’s approval numbers south, will the president alter policy course on two of his signature campaign promises? That’s a question that will be watched closely by governments around the world.
President Donald Trump before the Super Bowl.
Opinion: The world plays Two Truths and a Lie
Over his first month in office, President Donald Trump has presented a range of policy prospects as possible. He has also undertaken a wide number of presidential actions. Together, these measures have shifted the global context, leaving partners and rivals to orient to a vastly changing reality and wonder how seriously they should take him.
Trade dissonance
Despite campaigning on US trade imbalances and promising to impose global tariffs, many doggedly doubted Trump’s intentions as president. When he suggested on Truth Social last December that his administration would introduce 25% tariffs on Canada and Mexico by Feb. 1, with a 10% additional tariff for China, the market held its breath. A common refrain of wait and see made the rounds. Colombia’s near-miss in late January when Trump threatened to escalate tariffs if the country did not accept military deportation flights sparked concern but felt further afield.
The mixed response to Trump’s tariff threats belies a cognitive dissonance that surrounds him and his administration. But there’s one thing anyone who’s followed Trump’s political career over the last decade should know: to believe him when he tells us what he intends to do. When he offers up an idea in a press conference, lists it on a webpage as a promise to be kept, posts about it on Truth Social, repeats it hundreds of times on the campaign trail, puts policy in place around it as president, and establishes a new governmental agency (the External Revenue Service) to execute, it is a pretty safe bet he plans to impose the tariffs.
On Feb. 1, the Trump administration formally announced tariffs on Canada and Mexico, with an additional 10% tariff on imports from China. When both Canadian and Mexican leadership reached out to Trump with commitments on border safety and curbing the flow of illegal drugs, the president agreed to a 30-day tariff reprieve. China offered no such concessions, and now the two are locked in a potentially accelerating dance of trade threats and investigations. With incoming levies on steel and aluminum, the Trump administration has already shown that it plans to rely over and over on pulling the tariff lever to further its trade agenda. This is the truth.
Foreign aid dismantling
As the new administration pursued its trade plan ambitions, details of another policy shift emerged: the apparent unwinding of the US Agency for International Development. The sudden reversal in 60 years of US foreign aid policy caught many working in the agency off-guard and sent ripples across the development community. Global headlines highlighted impacts on health missions, sustainability and climate initiatives, and frontline staff in Ukraine. Long a foundational component of American soft power, a US retrenchment on foreign aid likely opens the door for other global participants like China to step through.
Even with the fallout tally still being counted, the USAID decision was a foreseeable reaction to developing facts on the ground. Trump signed an executive order on his first day in office “reevaluating and realigning US foreign aid.” According to the order, “The United States foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values.” Trump immediately implemented a 90-day pause in US foreign development assistance. Likewise, in his capacity as head of the new Department of Government Efficiency, Elon Musk has persistently targeted USAID as a “criminal organization” and “beyond repair.”
Drowned out by attention on some of the administration’s more headline-grabbing maneuvers like an end to “Birthright Citizenship” and an extended pause on the TikTok ban, the impact on US foreign aid was initially overlooked. But the underlying context was there. This is another truth.
Middle East dismay
Trump saved the boldest declaration of his young administration for the arena of US hard power. Last week, Trump proposed an alternative trajectory for the Middle East: He repeatedly called for Egypt, Jordan, and others to accept millions of Palestinians from Gaza. At a press conference following meetings with Israeli Prime Minister Bibi Netanyahu, Trump took it a step further, suggesting that “The US will take over the Gaza Strip, and we will do a job with it too.”
Trump’s plan to “own” Gaza and convert it into the “Riviera of the Middle East” stunned the global audience. While Trump’s plans struck like lightning, they were not without prior seeding. According to reports, a thread of redeveloping Gaza has been woven at times throughout the Trump presidential campaign, including by the president’s son-in-law Jared Kushner early last year. In response, voices ranging from the Crown Prince of Saudi Arabia Mohammed bin Salman to the French foreign ministry raised deep concerns. Even still, as farfetched as Trump’s Gaza ambitions may seem, they provide a barometer of how far the current administration is willing to push the envelope. A fabrication, for now, but with designs on converting some kernel – “a concept of a plan” – into reality.
In describing the “historic proposal” for the US to take over Gaza, White House Press Secretary Karoline Leavitt explained that “Insanity is doing the same thing over and over again and expecting different results.”
Through a breakneck pace of policy change and action, the Trump administration has demonstrated a willingness to rethink the “same thing.” Everyone else is left to calibrate to the new dynamics, pondering if it just might all turn out to be truths.
Lindsay Newman is a geopolitical risk expert and columnist for GZERO.
President Donald Trump speaks to reporters aboard Air Force One en route to New Orleans to attend the Super Bowl, on Feb. 9, 2025.
Hard Numbers: Trump to unveil steel tariffs, Paris AI summit begins, Ecuador faces runoff election, Maoist rebels killed, Baltics energized by Europe, Eagles soar over Chiefs
25: Donald Trump says he plans to announce a 25% tariff on steel and aluminum imports from all countries, including Mexico and Canada. It’s unclear when the tariffs will take effect, but the US president said Sunday that he would make a formal announcement on Monday.
80: Government and industry leaders from at least 80 countries are convening in Paris on Monday and Tuesday as the AI Action Summit gets underway inside the historic Grand Palais. This year’s summit, the third following similar gatherings in Bletchley Park (UK) and Seoul, Korea, is co-hosted by France’s President Emmanuel Macron and India’s Prime Minister Narendra Modi,and it will feature an open dialogue about AI regulation and innovation at a critical time for both geopolitics and the technology itself. US Vice President JD Vance is attending as he begins his first official trip abroad. GZERO’s Tony Maciulis will be reporting from the summit and bringing us an interview with Paris Peace Forum Director General Justin Vaïsse on Tuesday.
1: Ecuador’s President Daniel Noboa was expected to prevail in Sunday’s election and avoid a runoff, but the race against his leftist opponent, Luisa Gonzalez, proved extremely close. Up less than 1% at the time of writing, and with nearly 80% of the ballot boxes counted, Noboa had 44.5% of the vote compared to Gonzalez's 44.1%. If neither candidate secures an outright majority, a runoff will be held on April 13.
31: Security forces battled Maoist rebels in the Bijapur district of Chattisgarh in central India on Sunday, killing 31 insurgents. The left-wing communists, part of the Naxalite movement, have been fighting with India’s government since 1967. Two Indian commandos were also killed in the clash.
3: The three Baltic countries have bid farewell to Russia’s power grid. Estonia, Latvia, and Lithuania completed their switch from the Russian to the European grid on Sunday. European Commission President Ursula von der Leyen called the move — amid heightened security owing to suspected sabotage of underwater cables and pipelines in the Baltic Sea — a new era of freedom for the region.
40-22: The Kansas City Chiefs were hoping for a historic hat-trick Super Bowl win last night in New Orleans, but it wasn’t to be. The Philadelphia Eagles dominated from the start, closing out the first half at 24-0, and finishing the game 40-22, with their quarterback, Jalen Hurts, winning MVP.
The end of US soft power?
The world’s wake-up call came at 3 a.m.
In the early darkness on Saturday, Feb. 1, USAID was suddenly shut down. “This site can’t be reached,” read its homepage. The end of the great age of American soft power began.
It was shocking, but not surprising. When Elon Musk pulled the rip cord of his verbal chainsaw and declared that USAID was a $40 billion “criminal organization” that “must die,” the deep-cut result was inevitable. President Donald Trump agreed, saying the organization was run “by a bunch of lunatics.”
Today, the website message is more stark. “On Friday, February 7, 2025, at 11:59 p.m. (EST) all USAID direct hire personnel will be placed on administrative leave globally, with the exception of designated personnel responsible for mission-critical functions, core leadership and specially designated programs.”
The remnants of USAID will be rolled into the State Department.
Is this really the end of American soft power and, if so, how should allies respond?
Created by President John F. Kennedy back in 1961, USAID was meant to be the bicep in America’s muscular arm of diplomatic power. According to the Congressional Research Service, USAID “provides assistance to strategically important countries and countries in conflict; leads US efforts to alleviate poverty, disease, and humanitarian need; and assists US commercial interests by supporting developing countries’ economic growth and building countries’ capacity to participate in world trade.”
It was a broad mandate covering over 131 countries and hundreds of programs.
What did they do? At its best, USAID helped fight deadly diseases through programs such as the Malaria Council in Uganda, or the President’s Emergency Plan for AIDS Relief. It supported NGOs working to stop the spread of Ebola and Marburg virus and to feed hungry people in Sudan.
The hyperpolarized culture wars rang the death knell of proportionality long ago, so when Musk dismissed the entire agency as “a radical left political psy ops” program, it fit the moment. Everything is now either the worst or the best. The middle ground is gone. But for all that, the facts remain and they are worth mentioning.
For example, the White House currently has a website up outlining its claims of waste and abuse at USAID, chronicling things like $70,000 for a DEI musical in Ireland and $32,000 for a “transgender comic book in Peru.” Those are making headlines in the culture war media. There will be other examples of programs the current administration chooses not to fund or accuses of corruption, but how many?
Turns out, the website only gives concrete examples of about $12 million worth of programs they don’t like, along with allegations but no data on “hundreds of millions” of others. Of USAID’s annual budget of $40 billion, that adds up to less than 2%. Is the best answer to a broken toe the complete amputation of a leg? Apparently so.
USAID was an important instrument of what Joseph Nye called “soft power,” achieving national security and goals through attraction, not coercion. “When you can get others to admire your ideals and to want what you want, you do not have to spend as much on sticks and carrots to move them in your direction,” Nye wrote in “Soft Power: The Means to Success in World Politics” back in 2004.
USAID was just that, projecting the ideals of the US in places where chaos, poverty, and insecurity are fertile grounds for malevolent forces that endanger the United States. It did this by supporting multilateral institutions, such as the World Health Organization and the Paris Climate Agreement. Soft power is a form of security and is supposed to work in conjunction with hard power. But if you think the cost of soft power is high, try the costs of hard power. Americans know that all too well from experiences in Iraq and Afghanistan.
What is striking about all this is that the Trump administration is not just trying to recalibrate US soft power to promote its own agenda. If that were the case, they would simply reform USAID, not kill it. This is radically different. What is now clear is that the Trump administration doesn’t believe in the value of soft power at all. It simply has no use in their political playbook.
There are no countries happier with the retreat of US soft power than China and Russia. Their influence in developing countries will now grow dramatically. Democracies are in retreat all over the world, as the Freedom House map shows, and the sunset of US soft power will make it worse.
But this is not the only example of the twilight of US soft power. The threat of 25% percent tariffs on allies like Canada is another. There is no closer ally to the US than Canada, with a shared border, a free trade deal, and deeply connected cultures. The tariff threat suddenly upended that, leading to scenes I have never witnessed in my lifetime, such as Canadians booing the American national anthem at hockey games.
The northern sense of confusion and betrayal is being amplified by the election cycles in Canada, with politicians now stoking a patriotism that comes at the expense of affection for the US. It is not a good trend but in context, completely understandable.
At this moment, the ubiquitous soft power of American culture has gone from inspiring to infuriating, the American beacon of freedom is now fried up into Canadian bacon. It will take a long time to reestablish trust between the friendliest of all neighbo(u)rs.
Let’s not overstate things. US soft power is not gone; it’s just diminished. American culture, innovation, and institutions remain resilient to challenges and attractive to billions of people. And for all the talk of diversifying trade, Canada will be economically tied to the US forever. There is simply no escaping geography.
But the end of the golden age of American soft power means that hard power options — militarily and economically – are now the most prominent tools on the table. Trump’s repeated claim that Canada should become the 51st state while threatening to economically destroy the country has gone from a bad joke to an ominous warning. How to respond?
As the US abandons its soft power strategy, its allies are having to develop their own versions of it to avoid punishment. Taking on Trump in a hard power fight is, after all, a lose-lose. A trade war may hurt the US, but it would hurt Canada much more.
The strategy now is to use soft power levers to try to convince the US president that what Washington wants, Ottawa wants too, without giving up too much in the process. So spending $1.3 billion at the border to stop illegal immigration and fentanyl is money well spent if it can help stave off tariffs that would likely push Canada into a recession. Of course, the tariffs aren't solely in response to fentanyl and immigration, but those are low-hanging fruit and, so far, addressing those issues has worked.
Then what? What are the rules of soft power in dealing with President Trump? Don’t celebrate and gloat over a win. Stay cool when threats don’t materialize. Don’t make it personal because with the president the personal is political. This is not a strategy of appeasement but simply using carrots, not sticks. To twist an old David Frost saying, soft power is the art of letting someone else have your way.Stacked containers in American and Chinese national colors symbolize a trade war between the US and China.
Beijing and Brussels react to Trump tariffs
Of greater interest are nontariff measures, including anti-monopoly investigations launched into Google and the placing of Calvin Klein’s parent company, PVH, on China’s “unreliable entities” list, limiting the brand’s operations there. Beijing also imposed export controls on 25 rare metals, including tungsten, critical for electronics and military equipment.
In the US, consumers might not like Trump’s cancellation of the “de minimis exemption,” which allowed the purchase of goods under $800 without duties. The move is expected to hurt low-income Americans who rely on direct shipping from online vendors while having a minimal impact on Chinese firms. While Trump has said he’s in “no hurry” to talk to President Xi Jinping, we’re watching whether public backlash in the US changes his tune.
Next, the European Union? Trump has put Brussels on his hit list but has not given any dates or specifics. EU trade chief Maros Sefcovic said on Tuesday, "We are ready to engage immediately“ and hoping “to avoid the measures which would bring a lot of disturbance to the most important trade and investment relationship on this planet.”
Canada's Prime Minister Justin Trudeau is joined by Finance Minister Dominic LeBlanc, Minister of Foreign Affairs Melanie Joly, and Minister of Public Safety David McGuinty, as he responds to President Donald Trump's orders to impose 25% tariffs on Canadian imports, in Ottawa, Ontario, on Feb. 1, 2025.
Trump ignites trade war. Will there be a legal response?
On Saturday, US President Donald Trump signed an executive order applying 25% tariffs on all Canadian and Mexican imports, excluding Canadian energy, which will be tariffed at 10%. The order, which takes effect on Tuesday, also imposes a 10% tariff on all Chinese imports. Trump threatened to escalate tariffs further if any of the countries retaliated, which Mexico and Canada have already done.
Canada will apply 25% tariffs on $155 billion of American goods, from orange juice to appliances to car parts, phased in over three weeks. Ottawa will also consider nontariff measures relating to energy and procurement, and provincial liquor monopolies areremoving American alcohol from their shelves. Mexican President Claudia Sheinbaum also retaliated with “tariff and non-tariff measures in defense of Mexico's interests,” without specifying the rate.
China has responded with plans to implement “countermeasures” and called Trump’s tariffs a “serious violation” of international trade rules, which it will contest before the World Trade Organization.
On what basis did Trump issue the order? Trump expanded the scope of the national emergency he declared on Jan. 20 at the southern border of the United States, due to “the sustained influx of illicit opioids and other drugs” that is “endangering lives and putting a severe strain on our healthcare system, public services, and communities.” It now covers both Canada and China, which he accuses of not doing enough to combat fentanyl production, money laundering, drug gangs, and transnational crime.
Could legal challenges derail Trump’s tariffs? To declare this emergency, Trump invoked the US International Emergency Economic Powers Act, or IEEPA, the National Emergencies Act, or NEA, as well as sections 604 of the Trade Act of 1974 and section 301 of Title 3, United States Code.
But the IEEPA hasnever been used to justify tariffs. It allows for the imposition of sanctions, suchas those imposed by the Biden administration against Russia, which can be invoked immediately. Trump chose the IEEPA because it allowed him to bypass the lengthy investigations and consultations required by other trade laws he invoked during his first term.
It also allows him to claim the tariffs are legal under World Trade Organization rules, as the General Agreement on Tariffs and Trade’s Article XXI designates a national security exception. President Richard Nixon similarly invoked the Trading with the Enemy Act to impose 10% tariffs after the US quit the gold standard in 1971 to stave off a balance-of-payments crisis.
This may not bode well for a challenge by China before the WTO. But if American courts rule against Trump on his use of the IEEPA, his emergency declaration could be considered invalid, opening the door to penalties under global trade rules.
Finally, there’s the USMCA. A Congressional analysis found that tariffs would violate the tripartite treaty, but with Trump already threatening to withdraw from the agreement, it would appear he does not care. Trump said on Truth Social on Sunday that Americans will feel “SOME PAIN” but that “IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”
We’ll be watching to see who might challenge the US president in court – and whether they succeed. Meanwhile, the markets were taking a hit as of early Monday with stock futures lower and the dollar and oil rising.
Exclusive New Poll: US-Canada – Tariff-ied of What’s to Come?
Won’t you be my … frenemy?
It’s not a beautiful day in the North American neighborhood. Two days before the Feb. 1 deadline Donald Trump set to impose tariffs on Canada, Abacus Data and GZERO Media have an exclusive new poll on American attitudes toward their closest ally and neighbor. The upshot? This is the dawn of the new age of the political frenemy. Longtime American allies like Canada have reshaped their view of their largest trading partner into something much more threatening, going from friend to frenemy.
The Abacus Data-GZERO poll surveyed 1,500 Americans on politically radioactive issues like tariffs, fentanyl, and immigration. On the big one, tariffs, 47% of Trump voters support a 25% tariff on Canadian goods, while 67% of Democrats oppose it. Why the split? Republicans see it as a pain-free exercise. Only 19% of Trump voters believe tariffs on Canada will have a negative impact on them, as opposed to 65% of Democrat voters. “It’s striking how many Trump supporters appear unfazed by the impact of tariffs or Canadian retaliation,” says David Coletto, CEO of Abacus. “They may see it as cost-free now, but that blind spot could become a real liability if people start feeling the economic hit.”
Abacus Data
Canadian officials have made an extraordinary effort to convince Americans that punishing Canada with high tariffs will drive up the cost of their goods, but it’s worked about as well as using winter boots to skate on ice. “Everything the American consumers buy from Canada is suddenly going to get a lot more expensive,” Prime Minister Justin Trudeau told CNN a few weeks ago, using examples like energy. “Canadian energy powers American manufacturing, businesses, and homes,” he said.
Clearly this has not landed with Trump voters, who not only see tariffs as a net benefit to Americans but also believe that Canadians are taking advantage of them. That’s right, even though the free trade deal was negotiated by Ronald Reagan and Trump, somehow crafty ol’ Canada pulled a fast one on both of them. According to the poll, 67% of Trump voters believe the free trade pact benefits Canada “way more” than it does the US. Overall, 50% of Americans believe there is a huge trade deficit between the US and Canada, which means that Americans are basically “subsidizing” their northern neighbor.
Abacus Data
That’s not true, by the way. The trade deficit between the US and Canada is not $250 billion, as Trump repeats, but less than $100 billion, mainly because Canada supplies the US with 24% of its energy, at a discounted price.
On immigration, there is another consequential gap between perception and reality. Fifty-four percent of Trump voters think “millions of illegal immigrants” come from Canada (44% of Americans overall believe this). The reality? It’s about 1% of the total number of immigrants crossing illegally into the US. And Canada just spent another billion dollars to stop that amount in hopes of appeasing Trump into calling off the tariffs.
Finally, on the other tariff trigger point: drugs. Thirty-two percent of Americans believe that a lot of the fentanyl that comes into the US originates in Canada. There are drug labs in Canada, for sure, but they account for less than 1% of the fentanyl that comes from places like Mexico, China, and other countries.
You might think from all this that the US really doesn’t like Canada, but here is the weird part:87% of Americans have a positive or very positive view of Canada, according to the poll. An optimist might see the fact that less than half of Trump supporters want these tariffs as evidence that he doesn’t really have a mandate from his base. So what is it?
“These findings paint a portrait of an American public torn between long-standing goodwill toward Canada and the view that Canada may be getting the better end of existing trade deals,” says Coletto. “On one hand, most Americans describe Canada as an ally … On the other hand, more than half believe Canada benefits ‘way more’ from free trade, echoing President Trump’s narrative that tariffs are needed to level the playing field.”
The partisan difference is notable, but geography matters as well. “Americans in border states register deeper anxiety about the fallout from a potential trade war,” Coletto says. “This underlines the importance of these border communities: Their direct exposure to cross-border trade could serve as a bellwether for how the broader American public will ultimately judge the practicality and fairness of tariffs.”
All this leaves a massive challenge in a very short time: Canadian leaders need to somehow convince Americans — or, more concretely, President Trump — that high tariffs on Canada will hurt Americans.
“The more Canadians can demonstrate that these punitive measures undermine shared prosperity, the likelier they are to sway uncertain or moderate Americans and mitigate the worst outcomes of an escalating trade dispute,” says Coletto. “But we also have to be aware that Trump voters are captive to his rhetoric, and what they think and feel is likely all he cares about.”
This is what the age of the frenemy looks like. Won’t you be my neighbor?
___________
To see the full Abacus Data-GZERO poll and David Coletto’s deep dive into the numbers, please click here.
The Trump circus comes to Canada
Donald Trump hadn’t even settled into office before his presidency dominated politics — not only in the United States but also in Canada. His threat of across-the-board tariffs of 25% and musings about conquering the country with which the US shares the world’s longest undefended border startled politicians north of the 49th parallel — as well as journalists, industry leaders, and just about everyone else paying attention.
Trump’s tariffs are still set to kick in on Saturday, Feb. 1, and last week, aboard Air Force One, the president revisited his idea of Canada becoming part of the republic, calling it “a country that should be a state.” Trump claimed that if Canada were to join the US, it would have better health care, lower taxes, and “no military problems.”
The scale at which Trump’s agenda and musings have reshaped politics in Canada is, as the president himself might put it, huge. The president has turned the Canadian political landscape into a circus, affecting everything from the Liberal leadership race and the campaigns for the soon-expected federal election to the just-launched Ontario election and the trajectory of public policy.
“Given that managing relations with the US and keeping the border open to the free flow of goods are Canada’s primary national interests,” says Graeme Thompson, a senior analyst with Eurasia Group’s global macro-geopolitics practice, “there’s little doubt that the specter of Trump is going to haunt Canadian politics — both federal and provincial — for the foreseeable future.”
“Upcoming elections in Ontario as well as federally will, in all likelihood, be framed in terms of Canada’s policy response to the Trump administration,” he adds, “including potential tariffs (which, if they don’t arrive on February 1, are almost inevitable at some point later this year or next).”
Indeed, the Trump circus is already underway.
Everyone is running against Trump
The governing Liberal Party is holding a leadership race to replace outgoing Prime Minister Justin Trudeau, and the winner will become prime minister in March. That race is already, first and foremost, about Trump. The former deputy prime minister and finance minister Chrystia Freeland is running — and promising a summit of nations targeted by Trump, including Canada, the European Union, Mexico, Denmark, and Panama if she wins. The goal of the summit would be to “coordinate a joint response to challenges to our sovereignty and our economies,” she says. Freeland also promises dollar-for-dollar tariffs to match Trump’s duties, casting herself as the tough-on-Trump candidate.
Freeland’s chief rival, former Bank of Canada and Bank of England governor Mark Carney, is setting himself in the same anti-Trump crusader mold, but with a side of seasoned crisis manager to boot. Carney, who is also running on retaliatory tariffs, says the Trump tariffs would “demand the most serious trade response in our history.” He’s promising to stand up Canada against threats from Trump — a requirement now for any politician in the country — and pitching himself as the person best suited to negotiate with the infamously mercurial Trump.
Whoever succeeds Trudeau will continue to campaign for the federal election, where they’ll take on Conservative Party leader Pierre Poilievre, the odds-on favorite to win that election. But the federal contest will almost certainly be about Trump and who’s best suited to lead the country against him. A recent poll found nearly 80% of Canadians want an immediate election so that whichever party wins will have public support for hitting back against Trump’s tariff threat, while 82% support retaliatory duties.
Conservatives caught in an awkward position
The anti-Trump fervor is leaving Conservatives who once supported Trump in an awkward position, including Ontario Premier Doug Ford, who called an early election this week in Canada’s most populous province. With the election call, Ford cited Trump’s threats and the need to “outlive and outlast” his administration. Ford recently received praise for sporting a “Canada is not for sale” hat, and his snap election — with his party campaigning under the slogan “Protect Ontario” — is focused on securing a “strong mandate” to deal with tariff fallout, which could cost the province over 450,000 jobs.
Ford, who once said his support of Trump was “unwavering,” is promising to retaliate against American tariffs, including a threat to halt stateside energy exports worth billions. He’s been leading the anti-Trump charge among Canada’s premiers, and his former praise for the president is now a distant memory, making him a bit of a political contortionist.
He’s not alone.
Poilievre, who’s been cast as pro-Trump and Trumpian himself, is talking of a “Canada first” policy and promising to “hit hard” against the US if Trump goes ahead with tariffs. Poilievre recently declared that Canada can “buy elsewhere to maximize the impact on Americans and minimize the impact on Canadians,” as he argued for the country’s need to build self-reliance. Whatever ideological camaraderie Poilievre might share with Trump, the national interest comes first in politics.
Trump dominates Canadian policymaking too
The Trump administration is already shaping Canadian policy on trade, defense, immigration and the border, climate change, energy, and more, initiating a scramble to adapt quickly. Before Trump took office, Canada was working to change its border policy, and the Trudeau government quickly moved to adopt new border security measures, including drones and helicopters in the face of Trump’s tariff threats. All this comes as Canada expects a sharp rise in the number of asylum-seekers in response to Trump’s immigration crackdown, including an end to birthright citizenship, mass deportations, and suspension of the US refugee assistance program.
There’s now talk of the vulnerability of Canada’s north-south energy corridors, which have become the only show in town. Poilievre is raising the need for Canada to be able to move more of its oil and gas east to west — perhaps using the once-proposed Energy East pipeline, which never came to fruition. That would amount to a new trade and energy strategy for the country — and represent a major shift.
As Trump moves to abandon US initiatives on climate change, such as participating in the Paris Climate Accord, ending new wind power development, exploiting oil and gas deposits in protected areas, and declaring war on energy regulations, industry standards may adjust away from more climate-friendly expectations, thereby impacting Canada’s standards as well.
How long will Canada rally around the flag?
Canada’s Trump focus — and anxiety — is also producing a rally-around-the-flag effect, with a growing sense of patriotism and rejection of all that 51st-state talk. Canadians are gearing up for tough months and years ahead, with governments in Ottawa and around the country already working on relief programs to mitigate the potential damage caused by Trump’s tariffs.
Trump’s threats have even managed to mostly unite the country’s fractious premiers and prime minister in a more or less “Team Canada” approach, though Alberta Premier Danielle Smithand Saskatchewan Premier Scott Moe are holdouts who oppose retaliatory tariffs. Still, that leaves 10 of 13 provinces and territories working together, which is a good rate for Canada.
But with roughly 80% of Canadian trade going to the US, the strong cultural and personal connections, a shared border, and deeply integrated defense policies, Canada will be hit hard by any fight with its neighbor — especially a prolonged one, which this could be.
Canada stands — like the US itself — to become exhausted by the endless focus on Trump and guessing at what his latest plans signify. In short, the Trump circus is just getting started, which means Canadian politicians must get used to walking the tightrope.