• By: Dan Donovan

Trump is the Economic Carpetbagger-in-Chief and Canada Should Yank His Rug

“True friends stab you in the front.” – Oscar Wilde.


Donald Trump, never one to let diplomacy, facts, or the truth get in the way of a good political stunt, is playing the role of the ultimate economic carpetbagger—slapping a 25 percent tariff on all imports with a separate 10 percent tariff carved out for energy products. This move will wreak havoc on North American supply chains and may cost hundreds of thousands of jobs on both sides of the border. Like a profiteer swooping in to exploit a crisis, Trump is using tariffs not to strengthen the economy but to score cheap political points at the expense of America’s closest ally.

Besides being bad policy and economics, it’s a slap in the face to a country that has stood beside the United States through thick and thin. We’ve fought in wars together, backed each other in crises, and built the largest and most successful trade relationship in the world. Apparently, that is meaningless to Mr. Trump. So be it, EH!

History has shown that messing with Canada economically never ends well for the U.S.—whether it was the 2002 softwood lumber dispute that backfired on American homebuilders or Trump’s 2018 steel and aluminium tariffs that forced desperate U.S. manufacturers to come back to the table and beg for exemptions. This time will be no different.

Canada has the tools, leverage, and global alliances to fight back—and fight smart. America depends on Canadian energy, critical minerals, and supply chains far more than Trump seems to realize. If Trump thinks he can bully his way into a better deal, he may find out the hard way that picking a fight with your closest friend is not only bad politics—it’s just plain stupid.

Canada has a unique opportunity to hit back with a strategic and painful response that the Americans will find hard to ignore.

 

Weaponize Our Critical Minerals Supply

The U.S. relies heavily on Canada for critical minerals like lithium, nickel, and cobalt, which are essential for electric vehicle batteries and clean energy technology. In 2022, Canada supplied the U.S. with approximately 90 percent of its imported potash and 60 percent of its imported nickel. Potash is vital to American farming, while nickel is a key component in lithium-ion batteries, particularly Nickel-Manganese-Cobalt (NMC) and Nickel-Cobalt-Aluminum (NCA) cathodes.

Canada should impose export restrictions or tariffs on all U.S.-bound lithium, nickel, and cobalt, which would significantly increase costs for American EV and battery manufacturers. Further, since over 90 percent of the potash used by American farmers is imported from Canada, this reliable supply is crucial for maintaining the United States’ high agricultural productivity, especially for crops like corn that require significant amounts of potassium to achieve optimal yields. Any disruption in the supply of Canadian potash would have serious consequences for American farmers and their overall food supply chain.

 

A Wake-Up Call for Canada-Diversify

Trump’s tariffs are a wake-up call for Canada to redirect our exports to the EU and Asia. We should make concerted efforts to strengthen partnerships with European and Asian markets, such as Germany and Japan, which are eager to secure stable supplies of critical minerals. This would leave the U.S. scrambling for alternative sources and increasing their production costs. Even if the U.S. backs down, it is in our national interest to diversify our export markets to ensure we are not overly dependent on the United States. In the interim, Canada could make it our national policy that if the U.S. wants continued access to Canadian minerals at stable prices, the EV and clean energy tariffs must be lifted, or access will be cut off.

 

Play the Canadian Energy Card – Threaten U.S. Oil & Electricity Supply

Canada is the largest energy supplier to the U.S., providing over 50 percent of U.S. crude oil imports and 90 percent of America’s imported electricity. With the U.S. facing ongoing energy security concerns, Canada has leverage that few are talking about.

Canada should introduce a “reciprocal energy levy” (REL), a strategic surcharge on oil and electricity exports to the U.S. If Trump is taxing Canadian energy products, Canada should immediately impose a per-barrel export fee on oil and a per-megawatt surcharge on hydroelectricity. This would force the U.S. to either absorb higher costs or seek alternative (and more expensive) energy sources.

Canada should target Republican stronghold states and apply regional export restrictions or higher levies on oil and electricity exports to red states like Texas and Louisiana, which rely heavily on Canadian energy. This would create domestic political pressure on Trump from his own voter base. Canada should also cut off hydro exports to swing states, particularly in the U.S. Northeast, including New York and New England, which rely heavily on Canadian hydroelectricity. A temporary suspension or restriction of exports could create energy shortages and price spikes and would put tremendous pressure on U.S. governors to push back against Trump’s tariffs.

 

Weaponize NAFTA/USMCA and WTO Disputes

Trump’s tariffs violate the USMCA trade agreement, which requires fair treatment of North American goods and services. The Canadian government should immediately launch a WTO and USMCA complaint: file a trade dispute under USMCA’s dispute resolution mechanism, which could allow Canada to impose retaliatory tariffs. While Trump’s administration may try to ignore rulings, it would add international pressure that benefits Canada.

 

Target Trump’s Political Base with Retaliatory Tariffs

Canada should take a strategic approach and focus retaliatory tariffs on goods produced in key Republican-voting swing states like Michigan (automobiles), Pennsylvania (steel), and Wisconsin (dairy). This will force U.S. manufacturers and farmers—many of whom are Trump supporters—to lobby against his tariffs.

Canada should form an anti-tariff bloc with Mexico and the EU, who also oppose Trump’s protectionist policies. Canada should coordinate retaliatory action with these partners, making U.S. exports uncompetitive globally.

Major U.S. automakers—Ford, GM, and Tesla—heavily rely on Canada for manufacturing and materials. These companies do not support Trump’s tariffs because they raise production costs.

 

Engage with U.S. Auto CEOs

Canada should initiate high-level direct talks with U.S. Auto CEOs. Privately engage with GM, Ford, and even Tesla executives to encourage lobbying against Trump’s tariffs, warning them that if the tariffs stand, Canada will impose higher levies on American auto imports.

 

Offer Special Deals to Non-U.S. Automakers

Incentivize European (Volkswagen, BMW) and Asian (Toyota, Honda) automakers to expand operations in Canada at the expense of U.S. manufacturers. This would weaken the U.S. auto sector while strengthening Canada’s. Announce that Canada will allow Chinese EVs into the Canadian market without tariffs if Trump doesn’t drop the American tariffs.

 

Support U.S. State-Level Pushback

Support Democratic-led U.S. states (like California and New York) that oppose Trump’s protectionist trade policies. Canada should coordinate with these states’ governors and trade officials to publicly oppose the tariffs.

 

Use Trump’s Own Playbook and Threaten an Adjustment Tax on American Goods

Implement a 5-10 percent import tax on key U.S. exports to Canada, including:

• Agricultural products (hurting farmers in red states)
• Pharmaceuticals and medical devices (hurting U.S. healthcare companies)
• Tech products (impacting firms like Apple, which relies on Canadian sales)

Announce the tax as a “protection measure in response to unfair U.S. tariffs,” mirroring Trump’s own rhetoric. This puts the pressure back on Washington and gives Canada a negotiation tool.

 

A Strategy that Hits Them Where It Hurts

Instead of being reactive, Canada should be resolute and go on the offensive by leveraging critical minerals, energy exports, NAFTA/WTO complaints, U.S. corporate interests, and state-level opposition. By restricting U.S. access to Canadian critical minerals, imposing energy surcharges on oil and electricity exports, targeting Trump’s political base with retaliatory tariffs, engaging U.S. automakers and states to oppose the tariffs, and hitting back with a Canadian border tax on U.S. imports, Canada can turn Trump’s tariffs into a political liability—or at the very least, make these tariffs so politically costly that they become unsustainable.

In trade wars, the smartest move is to make the other side hurt more than you do. Canada may be small, but we’re mighty—like David to America’s Goliath. By deploying a well-coordinated and strategic response, Canada can not only stand up for its economic interests but also show that messing with us is just plain bad economics. Trump’s tariffs are counterproductive for everyone involved, and it’s high time the Yanks realize that picking a fight with your best friend is not just unwise; it’s plain stupid.

After yesterday’s rather patronizing reprieve, we need to send a message to our Yankee Doodle friends that we are not on bended knee here, waiting for Trump’s 30-day rinse-and-repeat clock to tick down so he can change the goalposts again next month. The Trudeau Liberal government have hollowed out Canada’s reputation and credibility to such an embarrassing extent that we are now being eviscerated by an American President who thinks he can put us on probation like a misbehaving child. It’s high time we remind Trump that Canada isn’t some kid waiting for recess—if he keeps pushing, he’s going to find out what happens when the polite neighbour finally takes off the gloves. Eh?