The Canadian trade dispute has escalated sharply this week. In January Mark Carney, a Harvard-trained and Goldman Sachs employed economist who is now the Prime Minister of Canada, gave a widely-discussed address at the World Economic Forum in Davos, titled “Principled and Pragmatic: Canada’s Path.” The core message of that was that the rules-based international order is effectively over. He argued that Canada was adapting by building strategic autonomy while still holding to values like human rights and sovereignty. He framed it as “a rupture in the world order, the end of a pleasant fiction and the beginning of a harsh reality,” where major powers now operate without limits or constraints. The speech’s central argument was that countries like Canada shouldn’t try to negotiate one-on-one with a dominant power. He argued for avoiding negotiating bilaterally and being forced to “negotiate from weakness”. His proposed alternative was for middle powers to band together, defining a new system of “plurilateralism.” Although Carney never named Trump directly, comments about threats to Greenland combined with a China trade deal Carney had signed the week before led observers to read the speech as aimed squarely at Washington. The broader framing was that the US under Trump had become an unreliable, unpredictable ally, citing tariffs, the unauthorized use of military force to topple a foreign leader, and threats against allies’ territory as evidence that the old rulebook had been discarded. The speech got an outsized reaction and Trump responded directly the next day at Davos, saying “Canada lives because of” the US. That set the stage for the trade war chapter that is now unfolding.
What just happened is that the trade talks between the US and Canada, which had been somewhat productively underway for months collapsed Friday night (Aug 21), with a midnight deadline passing without a deal. The US imposed 50% tariffs on about $20 billion worth of Canadian goods starting August 22. The tariffs hit a broad range of products including dairy, alcohol, electronics, building materials, apparel, and agricultural goods, and notably apply even to goods that comply with CUSMA (the USMCA successor agreement), with no expiry date. The White House frames this as retaliation for Canada’s “discriminatory treatment” of US dairy, alcohol, and motor vehicle exports. The Canadian response has been that Carney says Canada will match the tariffs “dollar for dollar” starting September 8, though he’s since suggested his government may consider a more targeted approach instead. Carney mentioned dairy, appliances, agricultural equipment, pulp and paper, and electronics as sectors likely to see targeted tariff protection. Carney has used unusually sharp language, accusing Washington of using “economic integration as a weapon” and saying “you’re at war when you get attacked”.
For context, the U.S./Canada trade relationship is lopsided. It’s hugely important to Canada, meaningfully important but far more replaceable for the US.. For Canada, it’s generally considered existential. Canada exported $556.6 billion worth of goods globally in 2025, with the US alone taking $403.6 billion of that (72.5% of all Canadian exports). On the import side, Canada gets 46% of its goods from the US. The U.S. is also Canada’s largest agricultural trading partner, buying over 60% of Canada’s agricultural exports. Roughly three-quarters of everything Canada sells abroad goes to one customer. That’s an enormous concentration risk, which is exactly why Carney’s Davos pitch about diversifying toward “middle powers” and deals like the China agreement makes strategic sense for Ottawa. They’re trying to reduce dependence on a single, increasingly unpredictable buyer. For the U.S. the trade relationship is significant but not existential. The US traded $879.9 billion in goods and services with Canada in 2025, making Canada the U.S.’s roughly 2nd-largest trading partner overall (Mexico edges it out in some rankings with China close behind). Canadian trade is a much smaller share of overall U.S. trade/GDP than the reverse. Canada is the largest supplier of US energy imports, and Canada’s share of US crude oil imports grew from 41% in 2015 to 64% in 2025. This is one area where the US genuinely depends on Canada, not the reverse, and it may be more meaningful with the restrictions brought about by the Iran War and the Strait of Hormuz blockage. Still, the bottom line is that Canada has far more to lose in a straight trade war and the U.S. has more room to absorb the pain (except in energy, where it’s genuinely reliant on Canadian supply).
I read a New York Times Op/Ed this morning that described Canada as a country based culturally on survival. The idea of a Canadian “survival mentality” is a well-established thread in Canadian intellectual and literary history, most famously articulated by literary critic Northrop Frye and later popularized by novelist Margaret Atwood. Frye coined the term “garrison mentality” in the 1960s to describe how early Canadian settlers experienced their environment, not as a frontier to conquer (the American mythology) but as a vast, indifferent, often hostile wilderness to be endured. Small, isolated communities (“garrisons”) clustered together against the cold, the land, and the sheer scale of an unforgiving geography. This produced a psychology oriented around endurance, caution, and collective defense rather than individual conquest or expansion. It’s an attitude I became very familiar with during my two years (1990-1991) living and working in Canada.
Atwood’s Survival: A Thematic Guide to Canadian Literature took this further, arguing that “survival” is the central symbol of Canadian literature and identity, as opposed to America’s frontier/self-reliance mythology or Britain’s imperial confidence. She identified recurring patterns in Canadian fiction: characters as victims of nature, of history, of more powerful neighbors; a preoccupation with just getting through rather than triumphing. There is a Canadian ambivalence about heroism itself. This is based on a combination of the geography and climate of Canada. It’s a harsh, sparsely populated northern landscape where survival against nature was a real, literal concern for generations. Also, Canada was never fully independent in the way the US declared itself to be, but rather evolved gradually out of British colonial status, without a revolutionary break, fostering caution and negotiation over rupture. Living beside a vastly more powerful, populous, and culturally dominant United States bred a defensive identity. Canadian nationhood is partly defined by not being American, and by managing a much bigger neighbor without being absorbed by it. This survival-and-negotiation instinct is visibly echoed in Carney’s recent rhetoric. The emphasis on Canada needing “strategic autonomy,” on middle powers banding together rather than being picked off individually by a dominant neighbor, and the framing of the current tariff fight in existential terms.
What this had made me realize is that all of us thinking Americans have now been pushed by Trump into a Canadian survival mentality. We are all playing a waiting game, wondering when this horror of a president and administration will end. We are all becoming Canada. We are all just working on surviving Trump.