Few countries have more to lose economically from a hostile Donald Trump administration than Canada. The country’s prosperity is largely dependent on privileged access to the US market: about 75 percent of Canadian exports are sold in the United States, representing one-third of Canada’s GDP and providing for one-fifth of Canadian jobs. Canada’s most essential
Few countries have more to lose economically from a hostile Donald Trump administration than Canada. The country’s prosperity is largely dependent on privileged access to the US market: about 75 percent of Canadian exports are sold in the United States, representing one-third of Canada’s GDP and providing for one-fifth of Canadian jobs. Canada’s most essential economic interest is, therefore, to avoid being targeted with protectionist measures by its southern neighbour.
In practice, candidate and President Trump’s ire has been mostly targeted at others, especially China and Mexico. Still, the Trump presidency poses daunting challenges for Canada: it has much to lose and little to gain. The best Canada can hope for is the continuation of the status quo, which has benefitted its prosperity and security tremendously. At worst, Canada could suffer devastating economic damage should trade become significantly hampered.
The government of Canada has performed very well in managing this unusual political situation. Most obviously, Trump’s rhetoric has largely spared Canada so far. Another positive indicator for Canada was Liberal Prime Minister Justin Trudeau’s productive visit to Washington in February: discussions were friendly without the iciness that marked other high-profile visits, such as that of German Chancellor Angela Merkel. Trump has also ignored that oldest of irritants, defense spending. He has criticized European allies and partners such as Japan and Saudi Arabia, but not Canada — despite the fact that Canada does not even spend 1 percent of GDP on defense, an issue which has bothered successive US administrations.
Trump did have an outburst on Canada’s “disgraceful” trade practices in April, singling out the dairy and softwood lumber sectors, but this has not been consequential so far. Softwood is the subject of an old dispute that has tainted bilateral ties since the days of Ronald Reagan, and would have likely picked up in a Clinton presidency as well. The Canadian media seized on the dairy issue with some anxiety given the intensity of agricultural politics in the country, but Canada actually has a trade deficit with the United States in this sector, and the numbers are very small: Canadian dairy exports to the US market barely total $100 million, while imports reach $630 million.
Canada has a recipe for dealing with Trump. The central pillar has been a highly organized centrally planned strategy coordinated by a newly established “war room” in the prime minister’s office. The highest levels of the government, on the political and on the non-partisan civil service sides, have all been mobilized. The message is clear: the United States needs to trade with Canada; hampering this would hurt the US economy. Underlying this campaign has been Canada’s deep knowledge of US political institutions and culture and its extensive networks in the country’s government, business, and civil society.
The charm offensive has been led by Prime Minister Trudeau. His visit to the White House in February 2017 was, even according to the US media, a success. The visit was planned down to the last detail and showcased Canadians’ ingenuity in managing the relationship. Trudeau and Trump, for example, attended a roundtable on the role of Canadian and US women in business co-chaired by Ivanka Trump. Trudeau even later attended a Broadway play about welcoming outsiders with Ivanka. The symbolism was unmistakable: the play was about a small Canadian town’s role in hosting thousands of stranded Americans in the wake of the 9/11 attacks.
Canadian officials have been in hyper-drive lobbying their US counterparts at every level of government and in multiple sectors. This started early during the transition as channels were established with the new players. Notably, the two most senior officials in the prime minister’s office spent five hours with Jared Kushner and Stephen Bannon in early January, one among more than 10 such meetings during the transition. At least a dozen federal cabinet ministers have travelled to the United States since November, some more than once, to make the case for the importance of ties with Canada. Few, if any, other countries can claim that four months into the Trump era, all their senior ministers had already held face-to-face meetings with their US counterparts. Provincial leaders have also joined in, at Trudeau’s request. Saskatchewan Premier Brad Wall (a conservative who has clashed with Trudeau on domestic issues), for example, travelled to Washington, DC, and Iowa in early April.