‘Donald Trump is seeking to erase history and the bonds of family that tie us to our American friends. He will not succeed,’ writes Thomas d’Aquino/Shutterstock

By Thomas d’Aquino

February 13, 2025

President Donald Trump has declared economic war on Canada. His threats to impose crushing tariffs have been repeated to audiences in America, in Canada and throughout the world. Beyond tariffs, he has called for Canada to become the 51st state and has spoken of the use of “economic force” to achieve his aims. To many of us who have been long-time admirers of the Great Republic, of its ideals and of its leadership of the free world, his utterances have caused hurt and deep dismay, not to mention profound disruption of the economic order that has guided Canada-United States relations for many decades.

Presidents and prime ministers have lauded the relationship, which Republican President Ronald Reagan summed up as follows: “It’s hard to imagine any better friends than our neighbours, the Canadians. Our two peoples have lived side by side in peace and with a spirit of goodwill for the better part of two centuries.” Trump is seeking to erase history and the bonds of family that tie us to our American friends. He will not succeed.

Of all Trump’s rants, the most brazen and galling is his call for a de facto annexation of Canada ‑ a great democracy, 40 million strong and shaped by centuries of daring and hard work, high ideals and stunning achievements in peace and war. His words, reeking of entitlement and couched in the imperialist notions of manifest destiny, have stirred Canadians, who have responded with a patriotic fervour unmatched since the Second World War. One word sums up the Canadian reaction: “NEVER!”

In more immediate terms, Trump has threatened 25% tariffs on all Canadian imports, paused those tariffs for one month, announced another set of unjustified, additional 25% tariffs on aluminum and steel, which will disproportionally hit Canada. And, at this writing, he has signed an executive order enabling “reciprocal tariffs” on all major U.S. trading partners.

In the few short weeks since Trump unleashed his threats and articulated his designs on Canada, there has been a huge outpouring of thoughtful public commentary in this country from political, economic, academic and community leaders alike on how to deal with the cold new reality we are facing. The business community is rattled and feeling deeply vulnerable.

As the Founding CEO of today’s Business Council of Canada and drawing on my experience as one of the private sector leaders in advancing the Canada-United States Free Trade Agreement (FTA) and its successors, the North American Free Trade Agreement (NAFTA) and the Security and Prosperity Partnership of North America (SPP), here are some thoughts I am sharing with business colleagues and leaders of business organizations on how we should respond:

1. Don’t bet against America

The Canada-United States economic relationship is like no other. Our economies already enjoy a deep level of integration. Despite dangerous Trumpian protectionist policies, this level of integration, driven in part by geographical proximity and in large measure by market considerations, cannot be unwound by a wave of the hand or executive order. Existing continental supply chains would take years to reverse and be enormously costly to replace. Besides, Trump is in his second and final term and the explosiveness of his aggressive agenda may result in a major backlash and eventual electoral reverses for the Republicans.

My advice to Canadian businesses, is to hold on to what you can in the US market and grow your businesses as best you can. Change will come. Also keep in mind that all politics in the US is local and Canadian investment will always be welcome if it generates growth and jobs. As for attitudes towards Canadians, tens of millions of Americans have a positive disposition towards Canadians and tens of millions more do not share the MAGA philosophy. Bottom line: count on America as a sound long-term bet.

2. Don’t bet against Canada

Trump threats and the uncertainty they have spawned are already doing damage to Canadian investment activity and levels of business confidence. Some businesses are seeking to relocate to the United States. Others are curtailing growth plans. Some perspective is needed here. Canada has the second-largest land mass in the world, among the world’s largest supply of energy, food and critical minerals, a highly skilled and diverse work force, one of the most advanced educational systems of any country, and a legal and judicial system second to none. Bordered by three oceans, it has 15 trade agreements in force with 51 different countries around the world covering 1.5 billion consumers. The country’s potential is enormous.

One of Canada’s most attractive advantages until now has been its access to the giant North American market facilitated by the Canada United States Mexico Trade Agreement (CUSMA), which technically remains in place and is to be re-negotiated in 2026. This agreement encompasses one of the world’s largest free trade zones, with a population of more than 510 million people and an economy of some $30 trillion in nominal GDP – nearly 30% of the global economy. Trump notwithstanding, and certainly in a post-Trump world, I believe some form of cooperation will drive the continental dynamic for decades to come. I submit that no country can match Canada’s overall advantages. My advice – don’t bet against Canada.

3. Strike back at American tariffs and negotiate for the future

Canadian business and our business allies in the United States and Mexico, and across all market economies, know that the Trump tariffs are bad economic policy that will do serious damage to affected enterprises and workers. The United States will not be immune from their effects – far from it. The editorial board of The Wall Street Journal called Trump’s tariff threat against Canada and Mexico “The dumbest trade war in history”.  The Economist has opined, “If dealmaking means threatening catastrophe in order to win small gains, then Donald Trump is the master of the art”.

Until now, and uncharacteristically, the American business community, fearing retaliation from the president, has been extremely restrained in its public condemnation of seriously flawed policies. The Canadian business community, on the other hand, via various business organizations such as the Business Council of Canada, the Canadian Chamber of Commerce and many others, have been extremely vocal. What is particularly disturbing is the rationale for the Trump tariffs. In Canada’s case, the facts bear out that border and drug issues are of relatively little consequence.

The real reason for Trump’s actions is to draw production and jobs to the United States and to raise revenues for the federal government to facilitate tax cuts and increased defence spending. Bottom line, its deficit in 2024 was 6.9% of GDP with a calamitous trajectory for the future. Canadian business should continue to argue against the tariffs, and at least make the legitimate case for exemptions. We should work closely with business allies in the United States and Mexico and push vigorously for a united “all-hands-on-deck” combination of diplomacy and strategically targeted retaliation.

But we must be mindful that in the end, it will be emboldened Americans themselves who must push back against destructive protectionist policies and the drift towards authoritarianism and autarky. As the economic damage mounts, resistance to the Trump agenda is inevitable. In the meantime, and based on the principle that a deal is better than no deal, Canadian business must press for an accelerated re-negotiation of the Canada United States Mexico Trade agreement. Both Canada and Mexico have powerful bargaining chips which we must deploy to maximum advantage.

4. Build a more resilient Canada with wartime fervour

Trump’s economic aggression against Canada and his designs on our territory have unleashed a torrent of ideas on how we can move from defence to offence, many of them now entrenched in public discourse. These include establishing free trade within Canada; fast-tracking strategic infrastructure; expediting project approvals; simplifying regulation; maximizing our food, energy and critical minerals advantage; accelerating our AI investments in key sectors such as advanced manufacturing, agriculture, clean technologies, biotechnology and semiconductors; sharply speeding up the rebuilding and re-equipping of our armed forces and investment in defence production; and doubling down on our unprecedented drive towards trade and investment diversification beyond our continent. This is a brilliant strategy. However, most of these ideas have been part of the Canadian narrative for decades.

As I outlined in my recent book Private Power Public Purpose, Canadians have been adept at generating policy ideas but pathetically inadequate at execution. Complacency, I have argued, is our national affliction. My advice to Canadian business and in particular to our CEO community: think back to past crises when inflation, deficits, high unemployment, American protectionism, constitutional wars, global financial collapse and COVID were serious threats.

Think of the constructive leadership we provided to Canadians in those times with our ideas and our engagement. Whatever the effort then, current circumstances call for a commitment matched only in the past century by what Canadians, supported by Canadian enterprises, were able to achieve in defeating the most powerful of existential threats. Our top priority now? Let’s get on with the job!

Thomas d’Aquino is an entrepreneur and philanthropist, the Founding CEO of the Business Council of Canada, a member of the Order of Canada and the author of a #1 best-selling book “Private Power Public Purpose – Adventures in Business, Politics and the Arts”.