By Patrick Gossage
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December 29, 2025
There has been nothing like the mobilization of our country since we went to war against Hitler “for King and Country.” Now we are mobilizing in a new war against Trump’s depredations with renewed patriotic fervour. Our building a resilient sovereignty against the word’s most irrational and powerful regime - who believe we have no right to exist - will require an enormous dedicated and concentrated effort to redefine our nation. . Make no mistake. We are not seen as important in Washington, a lesson I learned as the Minister of Information at our embassy in the Reagan years. Like Trump’s disparaging attitude to Justin Trudeau, Reagan had little use for his crusading father, Pierre Ytudeau. The difference is that with Prime Minister Brian Mulroney r Reagan actually became a key figure in establishing the Canada-U.S. Free Trade Agreement (FTA), signed in 1988. Ironically, it is precisely the success of this pact that led to 75% of our trade going to the US, a dangerous dependence which is now under extreme threat. The future of the successor to the FTA is at dtake. The US Canada Mexico Agreement (USMCA) is about to be renegotiated and is by no means secure. Bilateral trade discussions on the sectorial tariffs that are destroying our steel, automobile, aluminum and lumber industries were going well but were cancelled on October 23 after Trump, in a fit of pique was annoyed by Ontario TV ads using a Reagan clip to decry tariffs. Prime Minister Carney clings to the hope that these issues will be addressed in the context of the USMCA talks. They are supposed to begin in January. We live in hope. Make no mistake. Trump recently suggested that USMCA’s future was not certain. His strong belief that Canada would be better as a US state _ “and there would be no tariffs” – seems unshakeable. Perhaps the most striking evidence of what low repute Canada is held in the White House comes from Vice President Vance. He has publicly criticized Canada's our generous immigration policies, blaming them for the country's "stagnating" living standards and referring to our approach as "immigration insanity". Vance pointed to a chart from IceCap Asset Management showing that Canada's GDP per capita growth has fallen behind that of the U.S. and the U.K. in recent years. He argues this stagnation is a direct result of Canada's approach to immigration and not U.S. trade policies. He specifically targeted Canada's multiculturalism model, contrasting it with the U.S. "melting pot". Vance claimed that "no nation has leaned more into 'diversity is our strength’... immigration insanity “ than Canada". The White House recently released National Security Strategy (NSS) which also note how immigrants can destroy our democracies. Thomas Friedman, a New York Times columnist signaled this: “It cites activities by our sister European democracies that “undermine political liberty and sovereignty, migration policies that are transforming the continent and creating strife, censorship of free speech and suppression of political opposition, cratering birthrates, and loss of national identities and self-confidence. “‘Should present trends continue,” it goes on, “the continent will be unrecognizable in 20 years or less.” These views are totally inimical to Canadian values. As is this, Trump’s most outrageous recent anti- immigrant outburst as reported by NBC : “For a second day in a row, President Donald Trump launched into a hate-filled rant against Somalia and Somali immigrants living in the US, saying they’ve “destroyed Minnesota” and “our country.” Minnesota, Trump said, is “a hellhole” right now. “The Somalians should be out of here. They’ve destroyed our country.“ The NSC also can affect Canada in its focus on the Western hemisphere. an area to be dominated by US interests. The US will secure critical supply chains in its own interests; and insists on the right of the US to have access to “strategically important locations.” The US National Security Council is to identify strategic points and resources in the Western hemisphere with a view to their protection and joint development with regional partners. Obviously, Canada as a source of critical minerals, will be under US scrutiny. Some observers fear that Trump wants Canada to become a “vassal state”. A December Toronto Star editorial states coldly that “Thanks to Donald Trump, we know that nothing about our country is guaranteed anymore, not our sovereignty, our democracy, our prosperity.” We now know the Canadian policies standing in the way of a new USMCA agreement. US Trade representative Jamieson Greer said our online Streaming Act, which will make profitable US streaming services support Canadian programming is a major irritant as is our sacrosanct supply management regime for dairy and poultry products. These both are very difficult bargaining chips for Canada to play. Trump’s love affair with tariffs is unlikely to subside so Canadian products may continue to be frozen out of the US. Prime Minister Carney’s ambitious strategy of finding alternate markets for these may work. And his new policy framework for rebuilding a successful economy, major infrastructure projects and attracting important foreign investment is a significant redefinition of our national political priorities. He enjoys wide public support for his strategy which also receives good business and media support. There is already some optimism about the economy in 2026 - take Bank of Montreal’s recent outlook paper: “We’re looking for a stronger economy in 2026 than 2025. Consumer spending has helped prop up the economy. The “Buy Canadian” campaign has helped, and more people are travelling closer to home. Also, there’s no question that federal government spending has also supported economic growth. As we move into the latter part of the year—boosted by firmer economic growth and lower population growth—we expect the unemployment rate to fall in the second half. “Canada’s position in the trade dispute isn’t as bad as it appeared earlier in the year. The average Us tariff rate on imports of Canadian goods is between 6% and 7%, compared to the 17% rate the U.S. charges the rest of the world on average. (these rates are goods under the existing CUSMA) Sectorial tariffs are heavily focused on certain targeted industries, such as steel and aluminum, lumber, and auto imports and non-USMCA auto parts. These are important sectors, but they represent a relatively narrow slice of the economy. “ In addition there is good news on the overall trade front. Canada’s trade swung to a surplus of C$0.15 billion in September 2025 from a C$6.3 billion deficit the month before and well above expectations for a C$4.5 billion deficit, Exports rose 6.3 C$ 64.231 billion, the largest monthly increase since February. Nine of 11 product sections posted gains. Metal and non-metallic mineral product exports jumped 22.7% driven by a 30.2% surge in unwrought gold; aircraft and other transportation equipment rose 23.4% and crude oil exports climbed 5.8%. We just may have a more resilient economy than we thought. Nevertheless, we cannot count on Trump agreeing to a new trade regime that is as good as the original NAFTA – and the cost of reducing tariffs on key sectors may be too high, Trump’s love for tariffs and distain for us won’t change. We can only hope that a smart, well connected and determined Prime Minister can rebuild an economy that will be immune to the vagaries of our neighbour.
