A Puck cartoon published circa 1887 with the caption, ‘It’s Only a Matter of Time – Old Fogyism may hold her back for a while, but she is bound to come to us’, referring to Canada as an object of US economic acquisitiveness/Library and Archives Canada.

By Asa McKercher

February 26, 2025

Among their myriad pre-implementation consequences, President Donald Trump’s threatened “economic force” tariffs and clumsy annexation overtures have reversed a trend among Canadians of declining pride in their country. The euphoric peak of that reversal so far, Canada’s February 20th victory in the 4 Nations hockey tournament, captured the bilateral Zeitgeist in a way no Truth Social tweet could douse.

Moreover, a growing consensus views the nationalism of this moment as having the potential to transform the current crisis into an opportunity to take much-needed moves such as building east-west energy links, increasing defence spending, and doing away with interprovincial trade barriers. That the president’s threats have spurred a nationalist reaction is no surprise. Nor is the sense that, grave effects aside, the upshot of Trump’s open hostility may be a Canada made great again; his agenda may be crazy, but at least it’s not hidden.

Canada’s life as a country has always been bound up in its relations with the United States, with economic subjugation and political domination central themes running through that relationship, especially in historic hinge moments such as the present crisis. In that sense, history provides some insights into this inflection point and how Canadians might weather the storm.

Given the gravity of a potentially ruinous protracted trade war with Trump, it is worth recalling that Canada came into being partly because of tariffs and threatened American expansion. In 1854, Britain had concluded a reciprocity agreement between its North American colonies and the United States, entrenching cross-border trade. A decade later, with perceived British backing of the South during the US Civil War, Washington announced its annulment of the deal. The move spurred the founders of Confederation to action. So did fears of victorious Union armies marching north.

Indeed, in 1866 British North America faced invasion by the Fenians, Irish Americans bent on seizing the colonies and trading them to Britain for Irish independence. Other issues drove John A. Macdonald and his fellow fathers of confederation, but the American factor was important. Nor did it cease to matter after 1 July 1867. That March, Washington purchased Alaska from Russia, and talk among Americans turned to linking this new territory to the rest of the United States.

Macdonald perceived a threat here, as well as one through the prairies: “I would be quite willing, personally, to leave that whole country a wilderness for the next half century,” Macdonald wrote to British MP and railway magnate Sir Edward Watkin in 1865, “but I fear if Englishmen do not go there, Yankees will.” In 1869, Ottawa purchased Rupert’s Land (much of northern and western Canada) from the Hudson’s Bay Company for $1.5 million, and then brought British Columbia into Confederation and built the Canadian Pacific Railway. In short, America figured prominently in Canada’s formation.

The American factor was central to other early nation-building efforts. Cognizant of the southward pull of geography in 1878, Macdonald won election with a call to build Canada’s economy on an east-west axis behind a tariff wall. “The welfare of Canada,” he boasted, “requires the adoption of a National Policy, which, by a judicious readjustment of the Tariff, will benefit and foster the agricultural, the mining, the manufacturing and other interests of the Dominion.” Shrewdly combining the National Policy with the railroad, Macdonald linked economic growth to nationalism, with an overt anti-American tone that appealed to Canadians. As he had told voters: “You cannot get anything by kissing the feet of the people of the United States.”

The National Policy failed to bring quick results. As yet, Canada’s population was too small to support an exclusively ‘Buy Canadian’ economic program. Throughout the 1880s, more than a million people in Canada decamped for the booming industrial centres of Gilded Age America and the homesteads of the Great Plains.

In 1890, Congress imposed the punishing McKinley Tariff (named for its author and Trump’s stated tariff hero, William McKinley, later president) leading Macdonald to broach with the Americans the notion of a reciprocity agreement. A resolute annexationist, Secretary of State James Blaine rejected the notion. “I am opposed, teetotally opposed,” he proclaimed, “to giving the Canadians the sentimental satisfaction of waving the British flag, paying British taxes, and enjoying the actual cash remuneration of American markets. They cannot have both at the same time.”

Spurned by Washington, Macdonald ran on “The Old Flag, The Old Policy, The Old Leader” as the famous campaign poster put it, leaning into the 76-year-old prime minister’s political longevity. Pointing to American annexationists and to the pro-reciprocity sentiments of Liberals, including party leader Wilfrid Laurier, Macdonald alleged “a deliberate conspiracy, by force, by fraud, or by both, to force Canada into the American union.” This anti-American nationalism resounded at the ballot box. Macdonald won his last majority, and died from a stroke three months later, on June 6, 1891.

When Laurier and the Liberals did form government in 1896, they did so in support of the National Policy. Indeed, as a means of countering American protectionism, the Liberal government reduced tariffs on British goods, counterbalancing the United States. Moreover, the Liberals made the National Policy work through mass immigration, bringing in huge numbers of farmers and workers. Amid the resulting economic and population boom, Laurier was right to boast of the 20th century belonging to Canada.

Under these circumstances, by 1911 the Liberals felt self-assured enough to enter into reciprocity talks with the William Howard Taft administration. Like many wealthy Americans at the time, Taft had a summer home in Canada at Murray Bay, now known as La Malbaie, on the north shore of the St. Lawrence (otherwise best known as the site of the 2018 Charlevoix G7 that served as a preview of Trump’s second-term hostility toward democratic multilateralism). As the unofficial “Mayor of Murray Bay”, Taft had fond views of Canadians, and an agreement was hammered out.

As the deal passed through Congress, nationalist suspicions were raised when incoming Speaker of the House James “Champ” Clark expressed his hope of seeing “the day when the American flag will float over every square foot of the British North American possessions, clear to the north pole.” The statement confirmed Canadian nationalists’ fears of economic annexation. In the federal election of 1911, the Tories successfully painted Laurier’s Liberals as traitors. As in 1891, an anti-reciprocity, anti-American message rallied Canadians at a moment when their economic future seemed on the line.

The experience of 1911 cast a shadow over Canadian politics. Having lost his seat in that election, throughout the 1920s William Lyon Mackenzie King was careful about pursuing reciprocity. There was some reciprocal relaxation of tariffs that decade as cross-border trade boomed. Then came the crash of 1929, and the Smoot-Hawley tariffs the following year. The tariffs rivaled what Trump has proposed in 2025 – and King’s government responded in kind. The combined effects on the Canadian economy were brutal. But a sea change came with the arrival of Franklin Delano Roosevelt in 1933.

FDR won congressional approval to pursue reciprocal trade agreements; his top trade official, Harvard economics professor and leading trade theory specialist Frank Taussig, affirmed a commitment to pursuing a deal with Canada, “our nearest neighbor, our best customer, the country that should be our warmest friend”. Mackenzie King and Roosevelt signed a trade agreement in 1935, inaugurating eight decades of steady continental economic integration. Cautious to a fault, and mindful of 1911, King agreed to the deal out of necessity. In the midst of economic crisis, Canadians displayed none of their past nationalism.

The Second World War furthered the trend of closer Canada-US economic ties, with King’s Canada and Roosevelt’s America moving closer together militarily, too. After the war, relations grew closer still. Even as Canada benefitted from proximity to the booming postwar United States, concerns were voiced about the extent of American ownership of Canadian industry and natural resources. Prairie populist John Diefenbaker and the Tories rode this sentiment into government in 1957. Parroting Macdonald, Diefenbaker had campaigned on reviving the National Policy and on reversing the drift toward Canada becoming what then would have been the 49th state.

Reversing course proved too difficult, as George Grant recognized in his 1965 Lament for a Nation. Thinking along the lines of nationalists in 1911, Grant contended that the Canadian business community and successive Liberal governments had sold the country’s independence. This message captured the attitude of older Tories but also a new generation of left-leaning nationalists seeking to shift public policy along anti-continentalist lines.

President Richard Nixon and prime Minister Pierre Trudeau in Ottawa, April, 1972/White House-National Archives

Pierre Elliott Trudeau enacted some of their program, although not at first. No nationalist, initially Trudeau rejected protectionism, flouting his independence of Washington in foreign, not economic policy. In 1971, Richard Nixon delivered a shock, announcing a 10% import tariff. Alarmed by this threat to Canada’s economy, Ottawa lobbied for an exemption. “If you’re going to be protectionist,” Trudeau told Nixon, “let’s be in it together.” If not, “our whole economy is so importantly tied to yours, we’d have to make some very fundamental decisions.” Nixon withdrew the tariff.

But the extent of economic dependence left Canadians spooked. Trudeau committed to a new course, creating the Foreign Investment Review Agency and Petro Canada, and pursuing the “Third Option“. Written by External Affairs economic officer David Lee and named for its ranking in a government report, the Third Option saw efforts to diversify Canadian economic and cultural links with Europe, Asia, Latin America, and Africa to “develop and strengthen the Canadian economy and other aspects of…national life and in the process reduce the present Canadian vulnerability.” Five decades later, the Third Option remains aspirational.

Trudeau’s economic nationalism did little to upend continental integration. It did upset the business community on both sides of the border, and in 1984 there were sighs of relief when Brian Mulroney and the Progressive Conservatives won a stunning victory. Declaring Canada “open for business”, Mulroney rolled back Trudeau-era protectionism. Then, urged on by the recommendations of the Macdonald Commission on Canada’s economic future, he took up Ronald Reagan’s entreaties to pursue free trade.

Breaking little new substantive ground over what had been steadily established since 1935 but acting as a protection against protectionism and statement of interdependence, the trade agreement represented a huge symbolic step, placing Canada firmly on a common North American trajectory with the United States. In this sense, it was Mulroney’s message about the future.

Conversely, in a 1988 campaign debate, Liberal leader John Turner looked to the past: “We built a country east and west and north. We built it on an infrastructure that deliberately resisted the continental pressure of the United States. For 120 years we’ve done it.” Mulroney, he charged, had “with one stroke of the pen you’ve reversed that, thrown us into the north-south pull of the United States. And that will reduce us, I’m sure, to an economic colony of the United States, because when the economic levers go, the political independence is sure to follow.”

Of late, with Trump questioning Canadian sovereignty and threatening to use economic pressure to fulfill his annexationist designs, much has been made of Turner’s warning. In 1988, many Canadians heeded it in what became a rerun of 1911, only with the party positions reversed. While forming government, Mulroney’s Tories lost the popular vote to the anti-free trade Liberals and New Democrats, indicating, perhaps, that a majority of voters opposed the agreement.

In the decades since, a majority of Canadians have swung around to favour NAFTA, its renegotiated sequel, CUSMA, and the many economic benefits that have accrued alongside a massive increase in bilateral trade. In contrast to so much of the country’s history, since the early 1990s, Canada’s two major political parties have backed a form of economic continentalism. To an extent now all too apparent, this consensus among politicians, executives, and the public bred complacency. Yet who could have reasonably predicted the rise of a figure like Trump? Or that the push to reverse eight decades of continental integration would come from the United States?

Having staked their future on North American free trade, Canadians resent the notion that with the scratch of a Sharpie this president might upend it all and annex us to boot. The big questions involve what comes next for Canada: in its economy, its relationship with the United States, and in its national identity. As in other eras where trade, tariffs, and threats of annexation drove events, Canada sits at a hinge point. For policymakers, channeling Canadians’ resurgent nationalism toward productive purposes is the supreme task.

Asa McKercher is Steven K. Hudson Chair in Canada-US Relations at the Brian Mulroney Institute of Government at St. Francis Xavier University. He is the author (with Adam Chapnick) of Canada First but not Canada Alone: Case Studies in Canadian Foreign Policy and (with Michael Stevenson) of Building a Special Relationship: Canada-US Relations in the Eisenhower Era, 1953-1961.