An Unavoidable Trade War with Canada is Looming – Trigger Date July/August 2025 1/3
May 2, 2025
According to the people present, when former Canadian Prime Minister Justin Trudeau traveled to Mar-a-Lago to meet with President-elect Donald Trump, his primary objective was to inform President Trump his public demands for U.S. trade reciprocity with Canada were unachievable.
Trudeau was not lying. In this outline we will explain a dynamic that is certain to surface this summer.
President Trump has deferred all North American trade negotiations with Canada and Mexico until later in the year, after the priority trade deals with other large trade partners are completed.The USMCA trade pact is due for review and renegotiation this year[BACK STORY]. We should expect an entirely different trade pact as an outcome,quite possibly the ending of the trilateral nature of the current agreement.
A few days ago, Politico noted that Canadian Prime Minister Mark Carney had a reprieve from his prior campaign points about confronting President Trump on tariffs immediately.PM Carney is currently trying to align allies for what will likely be a major confrontation that he cannot win.
♦ BACKGROUND – Following the 2024 presidential election, Prime Minister Justin Trudeau traveled to Mar-a-Lago and said if PresidentTrump was to make the Canadian government face reciprocal tariffs, open the USMCA trade agreements to force reciprocity, and/or balance economic relations on non-tariff issues, then Canada would collapse upon itself economically and cease to exist.In essence, in addition to the NATO defense shortfall, Canada cannot survive as a free and independent north American nation, without receiving all the one-way benefits from the U.S. economy.
To wit, President Trump then said, if Canada cannot survive in a balanced rules environment, including putting together their own military and defenses and meeting their NATO obligations, then Canada should become the 51st U.S state. It was following this meeting that President Trump started emphasizing this point and shocking everyone in the process. However, in the emotional reaction to Trump’s statements,no-one looked at the core issues outlined by Trudeau that framed President Trump’s opinion.
Representing Canada, Justin Trudeau was not expressing an unwillingness to comply with fairness and reciprocity in trade with the USA,what Trudeau was expressing was an inability to comply. Quite simply, after decades of shifting priorities, Canada no longer has the internal economic capability to comply with a fair-trade agreement (FTA). Trudeau was not lying, and President Trump understood the argument; hence his 51st state remarks.
This is where it becomes important to understand the core reason why Trump, Ross and Lighthizer (2017) did not structurally want to replace the NAFTAagreement with another trilateral trade deal. Mexico and Canada are completely different as it pertains to trade with the USA.President Trump would rather have two separate bilateral agreements; one for Mexico and one for Canada.
♦ Firstly, Canada is a NATO partner, Mexico is not. As President Trump affirmed to Justin Trudeau during the meeting, it would be unfair of President Trumpto discuss NATO funding with the European Union, while Canada is one of the worst offenders. Trump is leveraging favorable trade terms and tariff relief with the EU member states, as a carrot to get them into compliance with the 2.0 to 2.5% spending requirement for their military.
If the NATO member states contribute more to their own defense, the U.S. can pull back spending and save Americans money.However, Canada is currently 26th in NATO funding, spending only 1.37% of their GDP on defense (link).
Canada would have to spend at least another $15 billion/yr on their defense programs in order to reach 2.0%. Justin Trudeau told President Trump that was an impossible goal given the nature of the Canadian political system, and the current size of their economy ($2.25 trillion).
https://theconservativetreehouse.com/blog/2025/05/02/an-unavoidable-trade-war-with-canada-is-looming-trigger-date-july-august-2025/