By Colin Robertson

August 8, 2026

Donald Trump did not invent America’s turn toward economic nationalism. He accelerated it.

Strategic competition with China, anxiety over supply chains, industrial policy and domestic politics have transformed Washington’s approach to trade.

Tariffs are no longer temporary bargaining chips. In one form or another, they will remain part of American economic policy after Trump.

Bank of Canada Governor Tiff Macklem has warned that the tariffs are having a negative impact on key sectors, consumer confidence, business investment, and inflation expectations.

They also undercut Prime Minister Mark Carney’s pitch for foreign investment, something he will have to address at the Canada Investment Summit in September.

The most urgent issue is the looming August 19th deadline for Trump’s coercive 50% tariffs. Canada should trade reversible measures for reversible measures and permanent concessions only for durable, enforceable gains.

But looking forward, Canada’s objective must be broad: preserve privileged access to the world’s largest market while building a more productive and resilient economy at home.

These goals are complementary. Canada’s response should therefore rest on five principles.

1. Keep Team Canada United

Washington understands Canada’s regional divisions perfectly well.

Ontario worries about automobiles and manufacturing; British Columbia and the North about natural resources; the Prairies about energy and agriculture; Quebec about aluminum and aerospace; Atlantic Canada about seafood and offshore resources.

These differences reflect our vast geography.

But they can become strategic liabilities, especially when American intervention becomes interference, as when Treasury Secretary Scott Bessent weighed in on Alberta separatism and the American appetite for energy.

In response to American threats, Prime Minister Carney has declared that we will stand together “taking the necessary actions to support our economy”.

2. Negotiate Selectively, Retaliate Intelligently

Our negotiating objectives are relief both from existing sectoral tariffs and the new 338 tariffs, while pursuing a “modernised CUSMA.”

All negotiations involve concessions in return for gains. The question for Canada is no longer simply whether to make concessions, but whether the concessions purchase sufficiently broad, durable and enforceable relief to justify them. Retaliation, when necessary, must be purposeful rather than performative.

Every Canadian tariff is also a tax on Canadian businesses and consumers. Its purpose should be to change American behaviour, not advertise Canadian anger.

3. Build Coalitions Inside the United States

Which American industries matter electorally? Which congressional districts would feel the greatest pressure? Which Canadian products are indispensable to American manufacturers? What measures would influence Washington while doing the least harm at home?

That requires better intelligence: Canada needs a permanent economic security war room secretariat within the Privy Council Office. It would complement the Advisory Committee on Canada–U.S. Economic Relations, drawing its small staff from federal and provincial governments, business, labour and experts on the United States.

Economic diplomacy increasingly depends upon economic intelligence. If all politics is local, so is trade. Working with the provinces, our regional consulates become our front line for intelligence and advocacy.

We have American allies that we must cultivate.

Opposition to tariffs is growing inside the United States. The United Steelworkers and the International Association of Machinists and Aerospace Workers have urged U.S. Trade Representative Jamieson Greer to reconsider tariffs on Canada. Their members understand that integrated North American manufacturing sustains, rather than threatens, American jobs.

Twenty-five states have also challenged the administration’s latest tariffs in court, arguing that the White House exceeded its statutory authority and imposed needless costs on businesses and consumers. Canadian exporters are already owed $10 billion in compensation for the IEEPA tariffs ruled illegal by the U.S. Supreme Court in February.

Canada’s strongest coalition therefore lies not in foreign capitals but inside America: among governors, attorneys-general, unions, manufacturers, importers and consumers who pay the price of protectionism.

Led by Canada’s consuls-general, our advocacy should concentrate relentlessly on local jobs, prices, supply chains, and competitiveness.

But the most important response begins in Canada.

4. Accelerate Nation-Building at Home

Canada’s internal trade barriers continue to obstruct its economy decades after governments promised to remove them. While the Carney government has made progress, including with the One Canadian Economy Act,  premiers must finish the job now.

A genuinely integrated domestic market would raise productivity, reduce costs and strengthen Canada’s bargaining position more effectively than symbolic retaliation.

Ottawa and the provinces must also accelerate nation-building infrastructure: ports, railways, pipelines, electricity transmission, critical-mineral corridors and digital networks connecting Canadian producers with Europe and the Indo-Pacific.

5. Treat Critical Minerals as Economic Security

“Build Canada” is not merely an infrastructure program. It is an economic-security strategy. Energy and critical minerals are critical to success.

American defence manufacturers need secure supplies of scandium, germanium, rare earths and other minerals whose supply chains are currently dominated by China. (Policy‘s new Asia Pacific Foundation of Canada Series on Canada’s Critical Minerals Advantage captures the essence and depth of the role this crucial sector plays in our economic future.)

Canada should seek long-term procurement agreements, invest in critical minerals refining and processing, and secure recognition of Canadian producers as integral to the North American defence industrial base. The prize is not simply more mining, but more high-value production.

There is already support for such an approach.

The Pacific NorthWest Economic Region, representing regional American states and Canadian provinces and territories, has endorsed tariff-free Canada-U.S. energy trade and proposed a CUSMA Energy Security and Critical Minerals Subcommittee.

Ottawa should champion the proposal.

Institutionalized cooperation would make energy and minerals foundations of continental security rather than recurring sources of friction. This is the practical agenda that CUSMA negotiations need.

Privileged Access in a Global Horizon

Diversification remains essential, but it is a complement to the American market, not a substitute for it. No other economy can match the advantages created by geography, investment and deeply integrated supply chains. More than three-quarters of Canadian merchandise exports still go south.

The goal is therefore not decoupling but greater freedom of action.

Canada should deepen its Comprehensive Economic and Trade Agreement (CETA) with Europe, make fuller use of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), expand its strategic partnership with Mexico and continue to pursue the opportunities throughout the Indo-Pacific that Mark Carney has prioritized.

Diversification should increase Canada’s choices without permanently diminishing its American relationship. Canada cannot control Washington’s choices. We are into a new era of tariffs, managed trade, and coalitions of like-minded.

Canada’s answer should be disciplined economic statecraft: unity at home, selective retaliation, alliances inside America, national infrastructure, continental energy security and wider global markets.

We have cards.

Our pluralism works and we continue to attract global talent. We feed and fuel ourselves and export the surplus abroad. We are rearming to defend ourselves and contribute our share to collective security.

We can make ourselves harder to divide, harder to pressure and more valuable as a partner. That is how we will preserve both prosperity and strategic autonomy in a continental economy.

The era of American-led globalization and free trade is over. Canada must adjust.

Contributing Writer Colin Robertson, C.M., C.D, a former career diplomat, is a fellow and host of the Global Exchange podcast with the Canadian Global Affairs Institute in Ottawa.