Trucks cross the Blue Water Bridge between Port Huron, Mich., and Sarnia, Ont. amid ongoing trade and tariff uncertainty in December, 2025.Emily Elconin/Reuters
Matt Malone is a scholar at the Balsillie School of International Affairs.
The battle to assert American economic leadership in the 21st century is being waged in two very different sites of power, according to Jacob Helberg – a former Google policy lead who is now an under secretary of state in the U.S. State Department.
He broke them down in his 2021 book, The Wires of War: Technology and the Global Struggle for Power.
The first site is the front end of software, defined by the apps we use, the algorithms and aggregators that filter what we consume online, and the social media platforms that connect and divide us.
The second is the wires themselves: The actual hardware that makes digital connectivity possible. Crucial here are the economic security policy levers that regulate this hardware, such as investment reviews, sanctions, export controls and policies around critical supply chains.
Canadian legislators and policymakers have expended significant energy responding to the former. Trudeau-era laws such as the Online News Act and Online Streaming Act – and anticipated moves by Prime Minister Mark Carney’s government, such as a revised Online Harms Act and potential social media ban for children – focus on the unwelcome effects of software, where Silicon Valley companies have spread their technological might with little oversight or accountability.
But the economic security controls governing the actual hardware that makes up the digital world’s back end are no less relevant – and may come to define Canada’s future prosperity even more.
In much the same way President Donald Trump’s administration deployed aggressive (and indiscriminate and illegal) tariffs as a tool of economic coercion, it is also seizing the throttle of other economic security controls to assert its power.
Speaking after the U.S. Supreme Court’s tariff ruling that deemed many of Trump’s tariffs unconstitutional – but before the outbreak of the war in Iran – Edward Fishman, author of Chokepoints: American Power in the Age of Economic Warfare, warned about what lay ahead.
“If Trump doesn’t have his favourite tool, which is tariffs, at his disposal, other tools that he very clearly has authority over, like sanctions, like export controls, and like the use of military force, will become more attractive by comparison‚” Fishman said during a Council on Foreign Relations’ panel discussion on Feb. 20.
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Just days after Fishman uttered those words, Trump ordered attacks on Iran. When that bombardment created an oil crisis, the U.S. abruptly provided sanctions relief to Russia, while also lashing out at Cuba with export controls.
It is now a defining feature of U.S. foreign policy that these economic security levers are seized arbitrarily. And with further legal setbacks to Trump’s trade strategy last week, these other tools are only likely to become more important.
For its part, China also has a history of weaponizing these tools against Canada. And, as a sign of their growing importance, Beijing recently issued new regulations that consolidate the country’s supply chain and industrial oversight mechanisms within a national security-focused framework.
Canada must pay much closer attention to how this kind of economic warfare is being waged today.
That requires us to do two things.
First, Canada should avoid harmonizing its own economic security tools with the United States. Recent trade moves suggest doing so may be a demand of the Americans in the renegotiation of the United States-Mexico-Canada Agreement, or USMCA, known in Canada as CUSMA. That is because new reciprocal trade agreements signed between the U.S. and countries like El Salvador, Cambodia, Bangladesh and Indonesia all contain language about bolstering policy alignment with the United States in these matters.
As Under Secretary Helberg recently made clear, the objective of these trade provisions is to assert American control over the key technological and industrial domains of the future. Canada should resist that.
Canadians should also view with concern Carney’s recent appointment of Janice Charette to lead Canada’s trade negotiations. Charette comes to the job from a senior advisory role at the Business Council of Canada, a group that last fall proactively proposed USMCA include provisions further harmonizing Canada’s economic security policy tools such as export controls and foreign investment review rules with the United States.
Canada should reserve the right to determine for itself what is a threat to our economic security – not have it dictated by the U.S.
Second, we should be engaging in some much-needed governance cleanup at home. When investment review policy, import and export controls, and critical supply chain strategies are all set by different ministries with different mandates, bolstering Canada’s economic security is an even greater challenge.
This disarray creates confusion over priorities and generates delays in process. For example, Canada’s national security review into TikTok stretched on for years and, to put it lightly, lacked sophistication, while the ban on Huawei products and services announced four years ago still lacks a legislative framework to enforce it. In Taiwan, a governance leader in this domain, these kinds of economic security policy tools are all administered by a single centralized agency.
Canada urgently needs to recognize and adapt to how China and the U.S. are dictating control via digital technologies, trade pacts and economic security regimes. On the front and back end alike, Canada must maintain its independence and fix its governance shortcomings.