A couple of months ago, I wrote an article titled “Trump, Trudeau, and the 51st State.” It began with the words, “These are strange days in Canada.” Little did I know—though I suppose I should have predicted—that they would only get stranger.
Two months ago, Justin Trudeau, Canada’s Prime Minister, had become so unpopular that he suspended parliament and announced he would resign as soon as his party—the Liberal Party of Canada—had chosen his successor. Under the parliamentary system, this successor would immediately become prime minister.
At the same time, President Trump had just announced that he would soon put a 25% tariff on all cross-border trade in response to Canada’s lax concern about fentanyl production and exports. Meanwhile, he was also openly stating his intention to deploy economic force to annex the country while also calling Canada the 51st state and gleefully mocking Trudeau by referring to him as the Governor of Canada.1
A New Prime Minister
A lot has happened since then. Trudeau spent two months as a lame-duck prime minister while the Liberal Party went through the process of choosing a new leader. On March 9 the party chose Mark Carney.
In a strange quirk of the parliamentary system, Carney will become Prime Minister even though he is not a Member of Parliament and, in fact, has never been elected to any office or even pursued a political career until a few months ago. He did, however, head up both the Bank of Canada and the Bank of England, so he has been involved in governance on those levels. While Canada must have an election no later than October, he is widely expected to call one sooner. The Canadian electorate tends to quickly turn on prime ministers who come to power this way, so most people think he will try to gain a four-year mandate while he is still relatively unknown and, therefore, relatively well-liked.
Trade War
On the other side of the border, Trump relented on tariffs for a month, then instituted them on March 4 (though a couple of days later he postponed a good number of them until early April). Canada responded by adding retaliatory tariffs on a swath of goods imported from the United States with many more to come in April. This led to a phone call between the two leaders that reportedly included few resolutions but much profanity. This interplay of initiating and responding to tariffs is known as a trade war. At the moment, then, two countries who have long been fast friends are locked in a kind of economic conflict. There is a sense in which, due to the nature of tariffs, each country is hurting itself in an attempt to harm the other. I suppose that’s why you often hear the adage, “Nobody wins in a trade war.”
A tariff is a tax that is levied on goods exported by one country and imported by another. This tax is charged to the importer in the destination country and paid to that country’s government. Hence, when President Trump instituted tariffs on all goods crossing from Canada to the United States, it is American businesses that now have to pay a 25% tax and remit it to the U.S. government. They pass this cost to consumers, thus raising the cost of goods within the United States. The theory behind tariffs is that they will make foreign goods more expensive, thus spurring American resource extraction and manufacturing. Eventually, America will have no need for Canadian goods and the economy will thrive as American companies fully create everything American consumers need. A little short-term pain is meant to lead to great long-term gain.
Canada’s retaliatory tariffs will be paid by Canadian companies that import American goods. The companies will then pass the costs to consumers, ultimately elevating costs for Canadians. The theory is that this will lower demand for American goods, thus harming American manufacturers and causing them to express their dissatisfaction to the president, eroding his popularity and causing him to relent. Of course, there is a massive disparity in the size of the two countries and their level of economic dependence upon one another, so America maintains a significant advantage in this trade war. The current Canadian response represents merely a tiny fraction of America’s GDP. However, America does rely on significant imports of crucial products such as oil, potash, nickel, and electricity, and these are regarded as key leverage if and when the conflict escalates.
It is my understanding that President Trump wants his legacy to be one of initiating a new golden age for America, making her wealthier and more powerful than ever before. There are significant governmental expenses involved in running a nation as big as the United States and this cost is primarily covered by income taxes. While Elon Musk and his DOGE attempt to reduce governmental size and waste, Trump is attempting to fund the government in a new way—by the tariffs that will eventually allow him to remove income taxes. Essentially, he means to have other nations pay the costs involved in running a government in return for giving them access to America’s economy. It’s a bold plan.
I have far too little expertise in economics to judge whether his theory is sound. And because I am not American, I pass no judgment on his actions and policies—he was elected by the American people to spur the American economy and he is convinced this is the way to do so. The American political system provides plenty of accountability and the electorate will ultimately pass favorable or unfavorable judgment, which is as it should be in a democratic nation.
The Impact in Canada
What does concern me, of course, is how Trump’s policies impact life on this side of the border. If the tariffs remain in place over the long term, Canadian economists predict that due to the interconnectedness of our economies, it will cost hundreds of thousands of Canadian jobs and send the country spiraling into recession. The government has already indicated its willingness to respond as it did during the pandemic with relief policies that will pour vast sums of money into the economy. While this may mitigate some of the initial pain, it will inevitably also increase the national debt, spur new waves of inflation, and further erode the already-declining standard of living.
Meanwhile, Trump’s policies have ushered in a new and unexpected wave of Canadian patriotism, some of which is manifested as anti-Americanism. Many Canadians are angry at America and are responding by canceling trips to the United States and deliberately buying Canadian products instead of American ones. They are also booing the American national anthem before sports games. I don’t think it would be an exaggeration to say US-Canada relations are lower now than they have been for centuries. (I’ll go on record and say I intensely dislike people booing the anthem, especially since this means they are often booing a musician who was given the honor of singing the anthems. Shop Canadian if you are so inclined, but don’t boo another nation’s anthem!)
Trump’s policies have also transformed the political scene in Canada. Two months ago it looked like Trudeau’s Liberal Party would be devastated in a forthcoming election, but economic uncertainty and the choosing of a new leader has given it fresh life. At the same time, Canada’s left-leading parties and media have been trying to portray the leader of Canada’s Conservative Party as a Trump imitator or sycophant. Canada tends to treat the Liberals like our default party, so unless there is a strong force compelling people away from it, it tends to gain and retain power. Still, current polls mostly do show Pierre Poilievre’s Conservative Party maintaining a lead, albeit a narrowing one.2
And then these policies have left Canada in a place of uncertainty and perhaps even fear. Though it may sound melodramatic, many people are genuinely concerned that Trump intends to invade or otherwise annex Canada, especially if the trade war begins to negatively impact the American economy. It is too early for Canadians to feel significant pain related to tariffs, but we have been warned that when the increases come, they will be fast and steep. They will apparently impact produce and hygiene products first since many of these are sourced primarily from the United States. Other products will follow as the Canadian government ratchets up the retaliatory tariffs. Again, it’s the strange strategy of a trade war that Canada’s government intends to double down on the harm to its citizens in an attempt to force the issue to its climax.
The reality is that Canada is essentially at the mercy of Donald Trump, his keep-them-guessing style of leadership, and his protectionist policies (which, you may correctly surmise, are proving how shortsighted Canada’s government has been in failing to diversify our trade in favor of putting almost all our economic eggs in the American basket). The country is waiting to see whether his back-and-forth policies are a tactic for renegotiating USMCA—the trade agreement he negotiated and celebrated in his last term—or an indication that he actually does intend to press forward with across-the-board tariffs. As I said initially, these are interesting days—interesting and very uncertain.
It doesn’t much matter who is president or prime minister when we know that God is King.
They are ideal days, then, to remember that governments rise and fall, rulers are elected and deposed, and policies come and go, but God oversees and superintends it all. Uncertainty is merely a human perception based on our limited knowledge. Nothing is uncertain to the God who knows the end from the beginning. He is the one who steers and directs the hearts of kings, presidents, and prime ministers alike. He is the one who, in one way or another, will ultimately be glorified. So whether on this side of the border or that, we can have ultimate confidence in him. It doesn’t much matter who is president or prime minister when we know that God is King.
Prayer
If you’re in the habit of praying for Canada, here are some prayer points you might keep in mind.
- Pray that Canadian Christians would not despair over bad government or have idolatrous hope in better government, but fix their ultimate trust on God. And then pray that in the coming weeks or months, Canadians would elect a government that enables Christians to “lead a peaceful and quiet life, godly and dignified in every way” (1 Timothy 2:2).
- Pray for peace between Christians in Canada and the United States. Political pressures have often been known to disrupt relationships and it would be a great sorrow if disunity on tariffs or international politics in any way interrupts the much more important unity we have in Christ. (See Darryl Dash on this.)
- Pray that if and when the country and economy totter, the hundreds or thousands of faithful local churches in Canada will continue to boldly proclaim the unchanging and always-stabilizing gospel of Jesus Christ.
- Politics and economics are not my standard fare at this site. However, so many people have asked me about this situation that I thought it was worth writing out my thoughts. ↩︎
- It is an irony of this situation that Trump may have driven Canada away from electing a politically conservative government in favor of essentially re-electing an extremely progressive one. ↩︎
