Canada’s Sovereignty Push Could Reshape Its Economy

Donald Trump’s tariffs have done what decades of US economic dominance did not: make Canadians question their economic subordination. Conversations about economic self-determination are emerging — and no one is saying “sorry” this time.

A truck crosses the Ambassador Bridge border crossing between Windsor, Ontario, and Detroit, Michigan, above the Canadian Vietnam Veterans Memorial on March 1, 2025. (Geoff Robins / AFP via Getty Images)

Donald Trump’s imposition of a 25 percent tariff of Canadian goods, coupled with his threat to annex Canada as the fifty-first state, is one of the most antagonistic actions of the first months of his second presidency. The basic message has been clear: “We don’t need you” — but if Canada agrees to annexation, it will gain the benefits of US military and economic protection. Otherwise the country will be hung out to dry under the weight of punitive trade barriers, despite the existing free-trade agreement Trump himself negotiated.

Trump’s negotiating method remains unchanged from his days as a real estate and casino mogul: threaten to use all the economic and political tools you can muster to get others to accede to your demands, strike the best possible deal with those who yield, and move on to the next transaction. Neither his past business bankruptcies nor his electoral defeat by Joe Biden altered this approach. The weaker an opponent is perceived to be, the more aggressive the threats. In Trump’s eyes, Canada poses little challenge to US economic dominance.

While many Canadians once worried about their country’s growing economic and cultural dependence on the United States — especially in the years leading up to the free-trade agreements of the late 1980s — these conditions have since become an accepted reality for most. By many measures, Canada is now more economically and culturally dependent on the US than any other country, a fact Trump and his allies fully understand and are willing to exploit.

Trump vs. Canada

Trump’s enthusiasm for tariffs overlooks both their negligible impact on trade balances under President William McKinley and McKinley’s eventual reversal on the policy. It also ignores the real cost burden tariffs placed on the American people during Trump’s first presidency. While restorative tariff threats may appeal to his nationalist base, their implementation risks igniting a global protectionist trade war — a scenario few corporate capitalists favor and one that would disproportionately harm ordinary people.

Trump’s recent provocations have generated a moment of reckoning for many Canadians. National pride has been stung, and concerns over independence have risen to levels rarely seen. There is a widespread popular sense that radical action is needed. “Buy Canadian” campaigns have sprouted up across the country. Unifor president Lana Payne, speaking for Canada’s largest private-sector union, asserts that Trump “declared economic war on Canadian workers and our country. There is no turning back. As a country, we must use . . . every single available lever to build a strong, resilient, and diverse economy.”

Proposals for export bans, restrictions on US ownership, and measures targeting US oligarchs’ operations are gaining traction both in policy circles and on the streets. In Trump’s wake, more Canadians are realizing that continued economic dependence on the United States is both an economic dead end and an imminent threat to political sovereignty.

Since the 1970s, powerful capitalist forces have pushed global market expansion while weakening welfare states. But nation-states remain central to social identity in much of the Western world. For most people, national belonging is an integral part of personal identity, anchored in shared language, history, and culture, often tied to a specific territory. The United States has long cast itself as an ethnic melting pot, a single exceptional nation, while suppressing diverse national identities within its borders. At its best, however, its foundational narrative strives for a civic nationalism, where membership is based on shared political principles rather than ethnic, religious, or cultural homogeneity. Canada, at its best, strives for a similar vision of civic nationalism.

Canada: Stuck or Sovereign?

Canada is a pluralistic nation-state where peoples of many different national origins coexist while largely respecting mutual rights of self-determination. Modern Canada began as two colonial states, with British and French settlers industrializing a vast wilderness while treating indigenous peoples as subordinates and occasional allies against an emerging American republic.

The colonies of Upper and Lower Canada confederated in 1867 as a binational state, followed by referenda in 1980 and 1995 in which French Quebec decided to stay in Canada. Indigenous nations in Canada have remained engaged in negotiations to gain more sovereignty. Since the 1960s, Canada has drawn large numbers of immigrants from a wide array of national backgrounds and has been relatively tolerant of cultural diversity. In short, Canada’s multi-nation-state form is still a work in progress but represents a model of political cooperation serving to maintain relatively peaceful coexistence and progressive social programs.

This pluralistic democracy is also deeply reliant on highly qualified immigrant labor, making authoritarian nationalist attacks politically unworkable. Trump’s bellicose rhetoric has given a boost to Liberal political fortunes, but the right-wing Conservative Party under Pierre Poilievre continues to lead in polls ahead of an imminent federal election. Poilievre, a strident free marketer, is deeply committed to neoliberal limits on government spending, which will further undermine social welfare. Yet like that of all mainstream parties in Canada, his campaign rhetoric includes positive appeals to immigrants.

In the near term, Canada may respond to Trump with its own trade barriers, increased interprovincial trade, long-overdue industrial policy, and deeper engagement with both G7 allies and the Global South to reduce economic reliance on the US. These measures could provide some marginal gains in political independence, helping to avoid the further economic and social degradation that even greater subordination to US interests would bring.

The Great Canadian Trade Rebellion

The reality is that most elected Canadian governments and economic elites have been willing allies in supporting US imperial projects both at home and abroad. This had placed real limits on domestic social reforms and an independent foreign policy. Over the past half-century, various efforts have attempted to build a popular democratic movement for greater political independence — among them the Waffle, the New Politics Initiative, the Peoples’ Social Forum, and the Leap Manifesto. Yet these movements have rarely grappled with the full extent of Canada’s cultural and economic subordination within the US empire.

Now, however, Canada faces an unprecedented and blatant threat to its sovereignty. A stronger sense of Canadian identity and pride in its civic pluralism has emerged in response. The prospects for a common front — including liberals, social democrats, democratic socialists, and others — to build a popular democratic project for a more sovereign Canada have never been greater. Such a project could draw from social movements, trade unions, and political parties, learning from past failures while mobilizing around a self-reliant economic vision that is now more widely appealing and feasible.

Democratic political leadership should respond to real public demands. Beyond sovereignty concerns, growing numbers of Canadians believe viable economic alternatives exist. National opinion surveys show increasing support for a democratic, environmentally sustainable economy, featuring increased worker self-management. Most respondents from a recent related survey — across all employment classes except corporate owners — favor political candidates who advocate for a transformation beyond neoliberal capitalism. Activists from within Canada’s center-left and social democratic parties, labor unions, and social movements could form coalitions around these shared goals.

As economic elites increase their coercive power, the world is likely to witness more environmental degradation and economic inequality. Canadian sovereignty sentiment could move many beyond a sense of resignation and facilitate alliances between activists and regular people toward a genuine, popular democratic movement. Canada has one of the most highly educated labor forces in the world, a developed industrial base, vast land masses and resources, and a population increasingly committed to a sovereign state promising human and economic rights — not servility to an autocrat.

One thing should be clear: Donald Trump has no mandate to annex Canada or any other nation. Under the current threats of annexation and economic subjugation, Canadians are more united than ever before in their readiness to oppose imperial coercion and assert their right to self-determination. Where this may lead remains an open question. But the revitalization of popular forces in Canada increases the prospects for broad political mobilization and a democratic alternative.