The United States and Canada are inextricably entangled, partly due to the world’s longest shared border and the over one-trillion-dollar trade relationship. However, their political interactions have often been complicated. No sooner had Donald Trump been declared the winner of the elections than Canadian Prime Minister Justin Trudeau enthusiastically reached out to him and expressed his wish to co-work with the new administration.

However, their association has been tense. Although Trump and Trudeau have worked in tandem effectively more than once, such as when they renegotiated the North American trade pact (USMCA), their interactions have often been tense. Trump has referred to Trudeau as a “far-left lunatic” and a “two-faced” man and the discord does not diminish there; Trudeau appeared to mock Trump during a NATO meeting in 2019.

Tension will also increase in Canada if there are more political upheavals, especially as the latest polls indicate that Trudeau’s popularity has decreased and there is now a possibility of a snap election. This would then make things complicated in the short term as efforts might also be made to develop a stable working relationship with the new Trump administration.

Trade Tensions: Impact of Trump’s Tariffs on Canada’s Economy

The US is a vital trading partner with Canada, and 75% of the latter’s goods and services are exported to this southern neighbor. Trump’s blanket tariffs on Canadian goods raise considerable questions about their economic impact on Canada, given the details of how these tariffs are to be applied still need to be discovered. The fear is that this policy could strip several billions of dollars from Canada’s GDP, mainly by reducing business investment. Over and above such economic uncertainty, Canada’s growth is already decelerating.

Once again, from the north, pressure is also mounting on the USMCA – the trade agreement between Canada, the US, and Mexico. In 2026, all three nations will determine if they wish to extend the pact another 16 years, and analysts predict that Canada may have to make further concessions to maintain desirable terms in its dealings with the US. One of the hot spots may be Canada’s Digital Services Tax, which is slated to hit companies like Google and Amazon. Experts believe this is one area the previous Trump administration was hard on, and it may become even more challenging with Trump at the helm.

Pressure on Canada from Trump: Defence Spending Among NATO Allies

Another is maybe defense spending. Canada has long been criticized for not doing enough to meet NATO’s prescribed benchmark of 2% of its GDP in defense spending. Even though Trudeau promised that Canada would reach the target by 2032, Trump has been vociferous about expecting the NATO members to “pay their fair share” much sooner.

Canada would need to increase the pace of defense expenditure as part of its integration policy into the NATO defense goals. However, this could prove to be arduous since it faces fiscal constraints and the inability to be flexible in its approach.

According to analysts, Canada may start utilizing its huge deposits of critical minerals as part of its effort to enhance its defense posture and show a stronger commitment to NATO.(More)

Border Security: Challenges Ahead with Immigration Policies

A spooked Canada, at least at its northern border with the United States, has hailed Trump’s immigration policy where there are threats of mass deportations. Even as the US and Canada have moved to close the loophole in a 2004 deal that allowed asylum seekers to cross at unofficial points like the notorious Roxham Road, immigration woes still haunt the situation. Thousands entered the country in 2017 under Trump. With it being under Trump’s presidency, first-timers feared being in the US with the persuasive view that Canada would embrace them.

Canada’s Deputy Prime Minister Chrystia Freeland was required to reassure citizens about border security because it has a plan for taming the immigrant pressure that may become an issue from this porous and undefended 5,525-mile border. Tight collaboration between US and Canadian officials will be essential in pushing through border security with their need to maintain immigration flow respecting both countries’ borders.

Strategy Canada: Navigating the New Relationship with the Administration of Trump

It will, sooner rather than later, be a long and bumpy ride for Canada and the US under the Trump administration. Trade and defense commitments will weigh heavily on that, besides those related to issues of immigration and security. The Trudeau government is enterprisingly uncertain, but Canada has long-term connections that play, at least partially, to its interests in these talks. Tensions and potential challenges notwithstanding, Canadian officials like Freeland have underlined the imperative of maintaining close working relations with their American counterparts.

The next few years will certainly put the US-Canada relationship under test, and Canada will have to take a more strategic and foresighted approach in getting it to work with the new US administration on safeguarding sovereignty, economic interests, and security