To counter Trump’s tariffs, listen to Doug Ford – but not for the reason you’d think

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Wolfgang Alschner is associate professor at the common law section of the University of Ottawa. He holds the Hyman Soloway Chair in business and trade law.

On Monday night, fears of a Trump administration’s impact on North American trade proved justified. President-elect Donald Trump said he’d impose 25 per cent tariffs on all imports of Canadian and Mexican products.

To counter those tariffs, we must listen to Ontario Premier Doug Ford.

Mr. Ford has a point. Or at least, he’s not entirely wrong when last week he suggested Canada strike a bilateral trade deal with the United States even ahead of the 2026 review of the United States-Mexico-Canada Agreement. Mr. Ford reasoned that such a move would put the target of U.S. president-elect Donald Trump’s anti-trade agenda on Mexico and lets Canada maintain tariff-free access to the American market. Mr. Ford said other premiers agreed with him.

Mr. Ford is right that the election of Mr. Trump is forcing Canada to reset economic relations with its largest trading partner. But rather than prematurely scrapping an existing agreement (which has served Canadians well) and marginalizing Mexico (a close trading partner), a bilateral U.S.-Canada pact should protect our common economic security and build on the USMCA without replacing it.

The USMCA eliminated most tariffs and kept North American trade free. Yet, the deal was negotiated in a different era. The pandemic showed how easily supply chains could be disrupted and Russian aggression against Ukraine suggested that economic interdependence does not prevent war. The USMCA also scarcely addressed electric vehicles, critical raw materials and artificial intelligence, all of which have emerged as key industries needed for tomorrow’s prosperity and security. And while the agreement contemplated steps to curb China’s footprint in North America, it proved insufficient to co-ordinate trade and investment restrictions to counteract Beijing’s economic and security threats. In short, a new economic security pact is needed to ensure that North American trade remains not only free, but also resilient.

Canada can be under no illusions about how easy forging such a pact would be. The election results have made it harder to align with the U.S. on trade.

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The administration of President Joe Biden offered a model that Canada could follow. By emulating U.S. industrial subsidies, Canada could fight climate change while creating local green-tech jobs, including in the auto sector. The U.S.’s commitment to “friendshoring” critical supply chains created opportunities to deepen trade among allies. Finally, restrictions on trade with China focused on a “small yard” of strategic sectors, which made it easier for smaller trading countries such as Canada to join the effort without risking a wider trade war.

Whereas Mr. Biden’s trade policy was cohesive and strategic, the incoming Trump administration is likely to be more contradictory and transactional. The possible rollback of green industrial subsidies, the treatment of allies – including Canada – as rivals and the spectre of across-the-board tariffs on friends and foes will make for a bumpy ride.

But this is why, all the more, Team Canada needs to get ahead of the curve and shift the trade narrative now. Rather than fret over divisive tariffs, the U.S. and Canada should be talking about their common economic security.

Canada should present the incoming Trump administration with a blueprint for an economic security partnership. Aside from addressing Mr. Trump’s concerns over border security and illicit trade, the deal would affirm the recent alignment between Canada and the U.S. on selected China-related tariffs and investment restrictions. It could also include intensified co-ordination on export controls and economic sanctions that at times diverge unnecessarily. Finally, the agreement should intensify co-operation on critical minerals and future technologies. Severe funding shortfalls for Canadian mining projects coupled with the recent bankruptcy of Europe’s battery hope Northvolt, which may have ramifications for a planned Quebec-based battery plant, underscore the need for urgent, decisive and concerted action to mitigate Western dependence on China in minerals and green technologies.

A bilateral economic security partnership would have several advantages. It would change the narrative on U.S.-Canadian trade relations from tariffs to security and introduce a different cast of interlocutors, such as incoming U.S. national security adviser and China-hawk Michael Waltz. Canada, which was sidelined in other economic security initiatives during the Biden administration, such as the Indo-Pacific Economic Framework, could seize on Mr. Trump’s bilateralism to upgrade its relationship with the U.S. Even Mexico would stand to gain. The deal could be structured as bilateral side-letter to the USMCA, opening the door for a future accession by Mexico following the implementation of domestic reforms.

Mr. Biden famously quipped that when he hears climate change, he thinks about jobs. Let’s make sure that Mr. Trump thinks “security” rather than “tariffs” when he hears Canada.