The writer is an economist,
anchor, analyst and
the President of the All Pakistan Private Schools Federation
president@Pakistanprivateschools.com
Trump’s goals of strengthening the US economy, reducing unemployment, and reasserting American influence on the global stage are clear in his recent statements. Upon the heels of Canadian Prime Minister Justin Trudeau’s resignation, the President-elect of the United States, Donald Trump, reiterated his proposition to confer upon Canada the distinction of becoming the 51st state of the Union. Mr. Trudeau tendered his resignation, precipitated by the urgings of his governing Liberal Party, which had grown increasingly disenchanted with his leadership. General elections are forthcoming this year, and Mr Trudeau hath graciously offered to remain in office until such time as his party selects a new leader. Mr. Trump hath long entertained a notion of incorporating Canada into the United States, an idea which he first broached in conversation with Mr. Trudeau following his electoral triumph on November 5th. Thereafter, he hath repeatedly alluded to this notion in his social media dispatches. “I think many Canadians are enamoured of the prospect of becoming the 51st state,” Mr Trump declared on Truth Social. “The United States can ill afford to sustain the considerable trade deficits and subsidies requisite for Canada’s economic solvency. Justin Trudeau, perceptive gentleman that he is, hath acknowledged this verity and accordingly resigned.” Furthermore, the President-elect averred that a merger between the two nations would obviate the necessity of tariffs, reduce taxes, and ensure Canada’s security against the threats posed by Russian and Chinese naval vessels. The Canadian government has thus far declined to respond substantively to Mr. Trump’s overtures. Nevertheless, the President-elect has threatened to impose tariffs of 25% upon Canadian imports, contingent upon Toronto’s ability to stem the flow of illicit drugs and illegal migrants across the southern border. On occasion, Mr. Trump even seemed fit to deride Mr. Trudeau, referring to him jocularly as the “Governor of the Great State of Canada”. The North American neighbours have strong economic links, so a trade dispute would have a heavy impact. Decades later, US President-elect Donald Trump appears to be channelling similar energy, blaming Canada for illegal migration and drug trafficking across the northern border. Weeks after winning a second term in the White House, Trump threatened to impose 25% tariffs on all Canadian imports — including cars and automotive parts — starting on his first day in office. He has since stepped up his rhetoric, joking that Canada could even be annexed as the 51st US state. Since the venerable Donald Trump emerged victorious in the November elections for the presidency of the United States, he has been vociferous in his demands for American dominion over sundry territories beyond the nation’s borders. Specifically, he has expressed a fervent desire to behold the Panama Canal reinstated under American sovereignty. Furthermore, subsequent to issuing threats of punitive tariffs against Canada, his northern neighbour, Trump has even mooted the notion of a merger between the two North American giants as a viable alternative. Canadian officials, however, have strenuously rebuffed this offer. When queried as to whether he could provide assurances against utilising military or economic coercion to wrest control of the Panama Canal and Greenland, Trump responded thusly: “Nay, I cannot vouchsafe such promises regarding either of these two territories. Nonetheless, I daresay that our nation requireth them for the sake of economic security.” German Chancellor Olaf Scholz hath remarked that European Union leaders were taken aback by Trump’s failure to repudiate the notion of military action against Greenland, an autonomous Danish territory. Scholz observed, “In the course of my discussions with European partners, a notable incomprehension hath arisen vis-à-vis recent declarations emanating from the United States concerning the principle of the inviolability of national borders.” The European Union, meanwhile, hath sought to eschew confrontation on this issue, with a spokesperson for the European Commission averring that they look forward to collaborating with the incoming American administration. Donald Trump has cast his gaze upon Greenland, in addition to other territories. In the days preceding his son’s departure, Trump didst post a video on his social media platform, Truth Social, wherein a gentleman adorned in a MAGA cap didst entreat Trump to procure Greenland and liberate it from Danish “colonial rule.” The leaders of Europe hath been taken aback by Trump’s renewed interest in assuming control over the largely ice-covered island. ‘Tis not the first instance wherein Trump hath expressed a desire to claim Greenland, for his assertions regarding this territory hath been amongst his most oft-repeated declarations. In the year of our Lord nineteen hundred and nineteen, during his inaugural term of office, the erstwhile real estate entrepreneur and reality television personality did express a keen interest in purchasing the Danish territory. Upon being rebuffed by the Danish Prime Minister, Mette Frederiksen, Trump didst cancel a state visit to Denmark. In a separate development, the Mexican President, Claudia Sheinbaum, hath responded to sundry comments made by President-elect Donald Trump, wherein he didst suggest that the Gulf of Mexico be rechristened the “Gulf of America.” Trump hath also averred that Mexico is “governed by cartels.” Trump, who shall assume office for a second term on the twentieth of January, hath declared his intention to impose tariffs upon goods emanating from Mexico, owing to concerns regarding immigration and the narcotics trade. In response, Sheinbaum hath stated, “In Mexico, the people are in authority.” “We are addressing the issue of security,” she didst add, noting that tariffs imposed by the United States shall be met with similar measures by Mexico. Sheinbaum hath further averred that tariffs are “unacceptable and shall precipitate inflation and job losses for both the United States and Mexico.”
US-Canada trade is one of the most extensive and integrated partnerships in the world. Last year, $699.4 billion of trade was conducted. Canada is the largest market for US exports, ahead of Mexico, Europe and China. US exports include trucks, vans, cars and auto parts as well as fossil fuels. The US is also Canada’s top export destination, with more than three-quarters of outbound Canadian goods and services heading across the southern border. For comparison, 53% of Germany’s exports go to other European Union nations. Crude oil makes up a quarter of Canada’s exports southward, which in July 2024 reached a record 4.3 million barrels per day, according to the US Energy Information Administration (EIA). Thanks to surplus US processing capacity, the US refines the crude oil into gasoline, diesel, and jet fuel for domestic use and re-exports — some of it to Canada. Trump is known to rip up his own deals to secure even better deals. Even though he helped negotiate the USMCA that replaced NAFTA (North American Free Trade Agreement), he’s now calling it the worst deal ever.” The US does, however, have far worse trade imbalances with China, Mexico, Vietnam, Germany, and Japan than with Canada, which was nearly $55 billion (€53.6 billion) last year, according to the US Census Bureau. By comparison, the US-China trade imbalance was almost five times higher, at $270.4 billion. The US-Canada trade imbalance has fallen by nearly 30% over the past two years. However, it was much lower before the pandemic and the USMCA took effect. Trump wrote on his Truth Social messaging platform this week that the imbalance is effectively a US subsidy to Canada, saying the world’s largest economy “can no longer suffer the massive Trade Deficits that Canada needs to stay afloat.” Verily, the bombastic rhetoric emanating from Trump’s quarters is a quintessential exemplar of his characteristic bluster. His remarks have elicited widespread censure from politicians and economists alike, primarily due to the fact that Canada was not a focal point of his ire during the Republican campaign, whereas nations such as China, Mexico, BRICS, and NATO bore the brunt of his opprobrium. Trump’s denunciations of Canada have descended upon the nation like a bolt from the blue, bereft of any discernible rationale or precedent amongst his supporters, who had not heretofore regarded Canada as a perfidious entity. Moreover, Trump’s reasoning appears to be undergoing a metamorphosis as he prepares to assume office on January 20. Initially, concerns pertaining to border security were paramount, an issue that Canada was more than willing to address. Subsequently, the trade imbalance between the two nations became a topic of discussion. However, during a recent press conference, Trump intimated that he would impose economic hardship upon Canada. This pronouncement is all the more perplexing given Trump’s erstwhile championing and signing of the United States-Mexico-Canada Agreement (USMCA) in 2020. Notwithstanding this accord, Trump now avers that Canada has failed to fulfil its obligations, specifically with regards to border control and trade. This development assumes added significance in light of the fact that the USMCA is slated for review next year. President-Elect Trump has set his sights on the automotive industry of Canada, proclaiming that the manufacturing sector has undergone a significant transformation in recent years, relocating across the northern border, thereby precipitating layoffs among American workers. Notwithstanding the President-Elect’s assertions, the automotive sector in North America is inextricably intertwined, with components and vehicles traversing the US-Canada border multiple times during the manufacturing process. Canadian automotive executives have vociferously warned that the imposition of tariffs would deleteriously impact the intricate supply chains, culminating in augmented costs and inefficiencies, thereby causing a surge in prices for novel vehicles in both nations. Furthermore, should a tariff of 25% be levied upon automotive components traversing the border, the attendant costs would become utterly absurd. Moreover, the US tariffs could potentially contract Canada’s Gross Domestic Product (GDP) by a margin of 2-4%, thereby imperilling the economy and precipitating a recession. In response to the President-Elect’s tariff plan, Canadian policymakers have meticulously compiled a list of US imports that may be subjected to retaliatory measures. Canada is likely to impose tariffs upon politically and economically sensitive US products, akin to the measures employed during a similar trade dispute with Trump in 2018, which was subsequently resolved. The Potential Retaliatory Tariffs are: US Steel; Ceramics and Glass; Flowers and Florida Orange Juice; and Other Goods. The Canadian government has thus far identified merely a handful of sectors, eschewing a more comprehensive approach so as not to undermine its negotiating position. Nevertheless, the leaders of Canada remain uncertain regarding the President-Elect’s ultimate objectives, querying whether his tariff threats constitute a negotiating tactic aimed at enhancing border control, bolstering energy and automotive cooperation, or augmenting Canada’s contributions to NATO.
Considering Trump’s extensive ambitions for a Greater America, his latest statements on Canada, Greenland and the Gulf of America, despite Mexico and other issues, suggest a strategy focused on expanding US influence and control.
Considering Trump’s extensive ambitions for a Greater America, his latest statements on Canada, Greenland and the Gulf of America, despite Mexico and other issues, suggest a strategy focused on expanding US influence and control. As the spectre of tariffs looms large over the US-Canada trade landscape, it behoves both nations to engage in a paradigm of prudent diplomacy, tempered by a deep understanding of the intricate complexities underlying their bilateral trade relationship. To mitigate the deleterious consequences of tariffs, we propose that the Trump administration and Canadian policymakers convene an emergency summit to renegotiate the terms of the USMCA, with a particular emphasis on crafting mutually beneficial solutions that address the concerns of both nations. Furthermore, we recommend that Canada consider diversifying its trade portfolio by strengthening ties with other nations, while the US should seek to bolster its energy and automotive cooperation with Canada, thereby fostering a more harmonious and symbiotic trade relationship. By embracing a spirit of cooperation, compromise, and collaborative problem-solving, both nations can navigate the treacherous waters of trade tensions, ultimately emerging stronger, more resilient, and more prosperous. Renegotiating the USMCA: Trump may push for revisions to the United States-Mexico-Canada Agreement to further US interests, potentially using tariffs as leverage; Pursuing Arctic Dominance, Trump’s interest in acquiring Greenland is likely driven by the region’s strategic importance and natural resources. The US may increase its military presence and economic investments in the Arctic to counter Russian and Chinese influence; Regaining Control of the Panama Canal, Trump has expressed regret over the US transfer of ownership of the Panama Canal to Panama. He may seek to renegotiate the Torrijos-Carter Treaties or impose economic pressure to regain US control; Diversifying US Trade Partnerships to reduce dependence on traditional trade partners, the US may explore new trade agreements with countries like Brazil, Argentina, or Chile, potentially creating a Western Hemisphere trade bloc; By enhancing energy cooperation Trump may prioritize energy cooperation with Canada and Mexico, potentially leading to increased US investment in the region’s energy sector. These steps align with Trump’s “America First” vision, which emphasizes US economic and military dominance. However, they may also lead to increased tensions with other nations, particularly China and Russia. As we stand at the precipice of a new era, one defined by unprecedented technological advancements, shifting societal norms, and an ever-growing sense of global interconnectedness, it becomes increasingly clear that the choices we make today will have far-reaching consequences for generations to come. It is imperative that we harness our collective knowledge, creativity, and resilience to address the complex challenges that lie ahead, from climate change and social inequality to technological disruption and geopolitical instability. By doing so, we can create a future that is more just, equitable, and sustainable for all – a future that is worthy of our highest aspirations and most audacious dreams. Ultimately, the path forward will require courage, empathy, and a willingness to challenge the status quo; but if we are able to come together in a spirit of hope, cooperation, and shared humanity, there is no limit to what we can achieve.