Think of the next Trump term as Canada’s cold, harsh shower

TORONTO—The United States presidential and congressional elections, with the victory of Donald Trump, have yielded results that the great majority of Canadians told pollsters they did not want. An even more protectionist U.S.—heavily focused on "America First" and, with a largely zero-sum mindset, disdainful of its allies and indifferent to international rules—will be highly disruptive and potentially quite damaging for Canada and, indeed, for the entire world. The planet could become a much more dangerous place. But it should also be seen as an opportunity for a much-needed national debate on our own future. Think of the next Trump administration as Canada’s harsh, cold shower: a sobering experience where we have to work much more seriously and much more strategically for our own national interest and what we must do if we are to be a prosperous, sovereign nation. We could be faced with an early need to deal with the damage to our economy should the Trump administration quickly implement a proposed 10-to-20-per-cent tariff on all imports to the U.S. A recent TD Economics Study shows the tariffs would slow Canadian economic growth, reduce exports south of the border, weaken our dollar, disrupt supply chains, and increase inflation. At the same time, massive deportation of undocumented immigrants could lead to an inflow of migrants from the U.S. to Canada while Trump's hints that he may interfere with the independence of the Federal Reserve could bring financial instability. We don’t need reminding that Trump and his zealous acolytes are dangerous. We dealt with threats—and insults—during his first term in the White House. What makes them more dangerous this time is that Trump is returning to office much better organized, with carefully chosen loyal aides, and a much clearer agenda. Moreover, the Republican Party has been completely Trumpified so that there will be less restraint from Republicans in Congress. We must understand the core goals of the administration, and the officials who will be charged with its implementation. Fawning over Trump and his followers, obsequious pandering and caving in to every U.S. demand will not work. What will work is a clear understanding of our own national interest, the identification of our own red lines, a strategic identification of what Canada must do to support our own prosperity and sovereignty, quiet diplomacy with allies in other parts of the world to sustain whatever we can of the global governance system, and how, collectively, to respond to the most dangerous risks coming from the Trump administration. Climate change is one example of where like-minded nations need to have a shared strategy to pursue the new energy world at a time when the Trump administration appears dismissive of the urgency. One of his early acts in 2017 was to withdraw America from the Paris Climate Accord. Global health and pandemic risks, global financial stability, food security, and collapse of failing states are all potential threats. Looming ahead is the 2026 review of CUSMA. While the review's goal is to assess how well it is working, it is now accepted that the U.S. will seek new trade and investment concessions for the agreement to be renewed. There will be intense pressure on Canada to significantly weaken—if not abolish—our supply management system for dairy, eggs, and poultry so that American producers can dump excess production here, to even more closely align our trade and investment policies on China with theirs, and to refrain from taxing U.S. big tech firms like Facebook, Google, and Netflix, or compelling them to make a contribution to Canadian productions on streaming services. We can expect significant pressure to please the U.S. from some Canadian business organizations which are prepared to sacrifice our farmers or cultural industries in order to preserve CUSMA. But the bigger issue will be a new understanding of what Canada’s fundamental strategic interests are, and how to best pursue them. In some instances, pressure from the U.S. may create an easy opportunity. For example, we can increase defence spending by focusing on our own Arctic, and through industrial strategy build a domestic capacity to design and construct Arctic icebreakers by Canadian firms, and more broadly expand our shipbuilding capacity. Likewise, we can boost Canadian companies in defence space activities, in electronic systems for shipping, and other forms of surveillance. This would add to the technological strength of Canadian businesses while moving us closer to the two-per-cent defence spending target. But beyond that, we have to think though how we are going to develop our own industries of the future, developing products and services that can be sold worldwide, and are not highly dependent on just the U.S. market. This means we need a serious industrial strategy to develop world-scale Canadian-owned companies, and Canadian-owned intellectual property and data. We are too dependent on the American market, which has made us too fearful of the U.S. and its ability—and, sometimes, willingness—to inflict damage upon us. This is why the arrival of a second Trump administration is an opportunity. Trump and his cohorts are not interested in our well-being, and don’t really care what we think. They will pursue their own objectives regardless. So the cold shower. Maybe this is what it will finally take to shake our nation out of its complacency and too-easy reliance on the U.S. for trade, finance, technology or defence, and in the process force our own businesses to become much more innovative and entrepreneurial, and public policy to be more supportive of our ambitious entrepreneurs. It is in our interest that we have a productive and friendly relationship with our immediate neighbour. But it should be based not on fear and excessive dependency, but on a healthy relationship between two prosperous and sovereign nations based on mutual respect, not a subservient Canada that has become a vassal state. The Trump administration is our cold shower. This is no time to panic bit rather to prepare ourselves for a better and more independent future. David Crane can be reached at crane@interlog.com The Hill Times