US Tariffs and What’s Next for Canada: Trump’s Strategy Through a Canadian Lens

U.S. President Donald Trump’s push to assert U.S. dominance—marked by trade tensions and uncertainty—should not be viewed simply by the “chaos” those actions appear to create, says Brian Lee Crowley, managing director of the Macdonald-Laurier Institute, a Canadian think tank.

Instead, he argues, they reflect Trump’s broader goals, his negotiating style, and Canada’s role in U.S. strategy.

Brian Lee Crowley Courtesy of Brian Lee Crowley

Trump’s election last November and his repeated tariff threats shaped much of the Canadian political landscape in recent months, becoming one of the top federal election issues and quickly reversing the fortunes of the governing Liberal party after it had become “deeply unpopular,” said Crowley in a recent interview with Jan Jekielek, host of The Epoch Times’ “American Thought Leaders” program.

In addition, he said, Trump’s ideas of wanting Canada to become the 51st U.S. state made many Canadians “deeply anxious,” prompting calls to reduce economic dependency on the United States or even join the European Union—a possibility Crowley says is unfeasible due to the deep economic integration between Canada and the United States.

“Donald Trump is looming so large in the Canadian consciousness right now,” Crowley said. “I have seen a lot of my compatriots running around like chickens with their heads cut off saying, ‘oh my God, Donald Trump is a madman, you can’t understand what he’s doing.’” 

But Crowley argues Trump’s strategy makes more sense when viewed through his priorities: restoring America to its “top nation status,” standing up to China as its “great rival,” recovering the promise of America “for the people who were left behind,” and bringing an “energy renaissance” to the American economy.

As for his negotiating strategy, Crowley says Trump inherited the American tradition of a “showman,” describing himself as a deal-maker and appearing unpredictable.

“I think he’s scaring the pants off the people that he wants to make deals with and bringing them to the table frightened out of their wits—this is just the way he works,” Crowley said.

“They’re letting him distract them with the shiny object up here, and getting caught up in his tactics, and forgetting to think about his strategy. And I think his strategy is quite clear.”

An ‘Existential’ Relationship

The economic relationship between the United States and Canada is of a different nature for both sides, Crowley says. Unlike the United States, Canada’s economy relies largely on exports, which made up about one-third of its GDP in 2023. In contrast, U.S. exports accounted for just 11 percent of its economy that year.

At the same time, more than 75 percent of total Canadian exports went south of the border in 2023, while Canada received only 18 percent of total U.S. exports that year.

“While for Canada, the relationship with the United States is existential, for America the relationship with Canada is convenient—nice, not existential,” Crowley said.

Trump has on many occasions said the United States does not need Canadian products, including its oil and gas, auto sector, lumber, and other resources. Crowley says Trump “exaggerates” how little the United States relies on Canada, noting that while America could source these products elsewhere, “it would be painful for America to do without Canada.”

“He knows Canada’s vulnerability to the United States, and he knows that for Canada, there is no realistic alternative, and he’s basically signalling to Canadians [that] he knows this, and he’s going to have high expectations of any negotiations that will take place between Canada and the United States over the nature of our trade and other relationships,” Crowley said.

He also pointed to the centuries-old “deep” integration between the two economies, describing them as a single North American economy that “happens to fall under the jurisdiction of two separate nation states.”

He says fully decoupling the two would be difficult, and said Canada would benefit more by reaching a deal with its southern neighbour that maintains the same market access.

China Would Use Canada as a ‘Storehouse of Natural Resources’

The United States may require Canada to align with its China trade policy as a condition for continued access to the U.S. market, says Crowley, particularly to ensure Canada does not become a “backdoor” for Chinese goods entering America. He argues it would be “the perfectly legitimate thing for America to ask for.”

“That will be a tough pill for the Liberal Party of Canada to swallow because they have, to a considerable extent, hitched their wagon to China as a rising power,” he said, arguing that the Liberal Party “has been an active promoter of China as an important partner for Canada for many years.”

In addition to aligning with the United States on trade policy, Crowley says Canada must also contribute more on security and defence. While he thinks Trump “exaggerates” Canada’s role in drug trafficking, he says “there’s no doubt that Canada is part of the international network that is flooding the United States with fentanyl.”

“I think the biggest role that we play in that is that we have become a haven for money laundering, for the people who are actually behind the drug trade, which is mostly China,” he said.

On the defence front, Crowley highlighted the longstanding U.S. concern that Canada has not met its NATO defence spending commitment, which Prime Minister Mark Carney has pledged to fulfill by 2030. In his first meeting with Carney in Washington on May 6, Trump criticized Canada, saying it doesn’t spend enough on defence, but also said America will “always” protect Canada militarily.

In 2024, Canada’s defence spending was 1.37 percent of its GDP, short of the 2 percent commitment for member nations.

“We have not been a reliable ally on defence,” Crowley said. “We have not been looking after the Arctic flank of North America.”

He added that Canada should “sit down with Trump” and negotiate on the full range of issues affecting both countries.

“I have been urging people on both sides of the border to think about what I call a ‘grand bargain’ between Canada and the United States,” Crowley said. “Let’s not get caught in the weeds on the trade relationship, that’s very important. Let’s make sure we get that right.”

On the idea of Canada turning to China as a new top trading partner to replace the United States, as some have floated amid trade tensions, Crowley said China could never offer Canada what the United States does.

“On almost every level, China is, in my view, a poor partner for Canada,” he said, adding that China wants to benefit from Canada’s resources but is not interested in a serious partnership involving Canadian manufacturers or processed goods.

“If we were to deepen our relationship with China, I’m here to tell you that China would only care about us as a storehouse of natural resources that they would be able to dominate,” he said.

“So in every way, China is a poor, indeed not just a poor substitute, a completely impossible substitute for our relationship with the United States.”

He said there is a misconception that Canada’s relationship with the United States is “all about natural resources,” without considering wider trade, security, and defence ties.

Canadian Identity

Trump’s comments about making Canada part of the United States and questioning the country’s existence “drove the anxiety levels of Canadians who cared about these issues to unprecedented heights,” said Crowley, adding it led to questions about Canadian identity.

The difference between Americans and Canadians is hard to define, he said, not because it doesn’t exist, but because “the differences are subtle and hard to express.” He noted that the United States was born from a revolution against the Crown, while some territories that would later become Canada remained loyal to it.

“We tend to be people who believe more in the quiet, thoughtful evolution of institutions,” he said, contrasting it with a “radical break.”

“Canada has chosen an evolutionary path in which we put a little more emphasis on the idea of the common good [and] a little less emphasis on the idea of individual liberty,” he said, adding that Canadians are “great believers” in individual freedom in the context of an ordered society.

He noted that to people from outside North America, like Europeans, the differences between Americans and Canadians may not seem significant, but there are differences.

“From the inside, the differences to us are quite obvious, and without in any way feeling that it means that we’re superior to America, it does make us feel that we’ve chosen a slightly different path in North America,” he said.

“It’s one that our ancestors fought and suffered and paid for and that we have inherited, and it’s ours and that matters to us.”