Canada, prepare for the big squeeze. Trump will press on several sensitive fronts

Canada is bracing for the impact of a new Trump administration that is likely to press the country on multiple fronts: trade, migration, and military spending. With Donald Trump’s plan for sweeping tariffs, mass deportation of migrants, and intense pressure on countries to spend more on their own defense, Canada is facing a challenging year ahead in bilateral relations.

The reverberations of Trump’s election win will ripple internationally, with his plan for a minimum 10 percent global tariff posing a significant threat to Canada’s economy. The still-undefined details of this plan have raised concerns about the potential damage, with estimates ranging from less than half a percent of GDP to a staggering five percent. Canadian officials have sought clarity on whether the country might be exempted from these tariffs, but have received no assurances.

In an effort to set a positive tone, Prime Minister Justin Trudeau congratulated Trump on his victory and expressed a desire to work together for the prosperity and security of both nations. However, Canadian veterans of the trade battles with the first Trump administration feel a sense of déjà vu, recalling past tariffs on Canadian steel and aluminum.

One potential scenario is that Trump will announce tariffs on everything early next year to leverage other countries into reorienting certain policies. This could plunge Canada into a painful trade war with its powerful neighbor, leading to retaliatory measures and negotiations over exemptions.

Military spending is another area of concern, as Trump’s administration may pressure Canada to increase its defense spending, particularly in the Arctic. Despite the Trudeau government’s promise to reach the historic military spending target of two percent of GDP, there is skepticism in Washington about Canada’s commitment to NATO.

Immigration is also a question mark for Canada, with Trump’s promise of mass deportations potentially leading to a surge of asylum claimants at the Canadian border. This could exacerbate tensions within Canada, as provinces pressure Ottawa to curb immigration levels. The Quebec government has already hinted at stepping up policing of its own border in response to the migration issue.

As Canada prepares for the big squeeze from the new Trump administration, it will need to navigate trade tensions, military spending pressures, and potential changes in immigration policy. The coming year is likely to be challenging, as Canada seeks to protect its economy and sovereignty in the face of evolving international dynamics.