In a recent opinion piece in the Globe and Mail, columnist Andrew Coyne argued that when Canada must choose between a bad trade deal and no deal at all, the only good move is “not to play.” We have now seen the details of the deals Trump made with the UK, EU, Japan, and South Korea, and he’s right. Signing such an agreement with our largest trading partner would be a terrible mistake.

Dealmaking with Trump is treacherous. Even after the threats, insults, and theatrics, the deals themselves are shamelessly rapacious. What’s more these so-called deals exist in a diplomatic grey area. They are not legal agreements ratified by the parliaments of all parties like the Canada-US-Mexico-Agreement (CUSMA) on free trade goods. They’re memoranda backed by executive order, and that’s the way Trump wants it. He can revise them whenever he feels like it, and smaller economies must keep their heads down and accept it.

Bad deals

After much ballyhoo, Japan made a painful handshake deal in July. Details came out in September, including a 15 per cent tariff on Japanese cars, and a pledge to invest a whopping $550 billion of public money in the US over the next three years. The number is so enormous, that Japan’s new government is already rethinking its commitment.

Even more significantly, that money will be managed by the United StatesInvestment Accelerator, a new office in the Commerce Department. The US government decides where to invest, not Japan.

At the end of October, South Korea was pushed to sign a deal, too. A pattern has begun to emerge. Hyundai and Kia automobiles will now enter the United States with a 15 per cent tariff. Washington again demanded a massive injection of cash. Korea will invest $200 billion in the United States and split the profits with the Americans. A further $150 billion in investment will go towards a shipbuilding partnership.

At the signing ceremony, Korea gave Trump a golden crown. The symbolism wasn’t lost on anyone.

What can Canada expect?

All these deals have four features: punishing tariffs, massive investments in the US, over the top security and military spending commitments, and privileged export access for American goods and industries.

So far, the Carney government hasn’t buckled under pressure. But Trump is demanding something similar for Canada, with the added humiliation of dismantling the auto industry. He wants Ford, General Motors, and Stellantis to transfer their production back to the US. In October, the automakers began to comply when Jeep and other production lines moved to American factories in the Midwest.

We shouldn’t be surprised. The Royal Commission on Canada’s Economic Prospects in the 1950s, the Watkins Report of 1968, and the Canada Development Corporation created in 1971, all predicted that American ownership operates in the interests of the United States, not Canada. The branch plant will always march in step with the head office when the chips are down.

In a Wall Street Journal article on the tariff state-of-play, Canada came second among a dozen major economies with an imposed tariff of 35 per cent, plus the extra 10 per cent promised by Trump for the crime of quoting Ronald Reagan. We should expect the Administration’s final offer to include tariffs ranging from 15-50 per cent. Eye-watering rates on softwood, topping 50 per cent, will stay sky high, as will tariffs on Canadian metals.

Our steel and aluminum industries are in serious trouble and workers across Ontario and Quebec are losing their jobs. If we want a deal that preserves some access to the American market, we will need to do what the EU, Korea, and Japan have already done, and offer hundreds of billions of dollars in cash that the Americans will invest in whatever they want.

Furthermore, we will be required to pay tens of billions into American security arrangements like Golden Dome, over and above increased spending on our own military. In exchange, Trump may agree to decrease tariffs on crucial sectors. Or he may not. Or he might change the deal whenever he thinks he can squeeze more out of us.

Canadian energy producers with high foreign ownership levels will receive a lowball tariff rate of 10 per cent, to keep American gas prices low while strengthening Premier Danielle Smith’s hand in the forthcoming referendum on Alberta independence.

Things can always get worse

Seasoned trade watchers know that Canada has few options. We can agree to a bad deal and call it a win. Or we can walk away from the negotiations and hope that Trump doesn’t bully Congress into dumping the CUSMA.

The Carney government is taking a middle road, playing for time while negotiating a smaller deal. Cabinet hopes the midterm elections and the Supreme Court reduce Trump’s capacity to harm the Canadian economy. It’s a big gamble but the alternatives are worse.

Rallying support

Major Canadian industries have taken a pounding from Trump’s trade bombs. Forestry exports have fallen by 25 per cent due to US tariffs. Exports of metals and minerals have lost market share. Automotive exports fell by close to 10 per cent over the year in June. Consumer goods fell by 15 per cent in April.

Beyond the outrageous deals signed so far, there is no meaningful policy process in Trumpland, no deep consultation, and no clear path forward. Nobody knows where the authoritarian personalization of power will lead in the United States. And nobody knows what role the key institutions of Congress and the Supreme Court will play in Trump’s tariff revolution.

Significantly, the Canadian public, after nine months of negotiations, knows next to nothing about our positions on the key issues. We know more about Trump‘s negotiations with China than we do about Ottawa‘s negotiations with Washington.

If we want to get through the Trump years with our economy intact, it’s time to start thinking outside the box. But we need the right sort of creativity. So far, all we’re seeing from our friends in Europe and Asia are variations on the theme of capitulation.

Carney needs to mobilize Canadians for what comes next. We need to know what our government’s red lines are, and what we may need to walk away from. With 76 per cent of our exports going to a single market, Canada is easy pickings for Trump. Rallying public support to oppose the American behemoth isn’t a guaranteed thing, but quiet conversations over the negotiating table clearly aren’t working.

We are quickly coming to the point where making a lot of noise may be our last, best card to play. To put it another way, with highly visible active public support and a focused strategy for collective action, Carney might just acquire the badly needed leverage to pull off the deal of the century. Lying flat is no longer an option.

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