Donald Trump’s threat of huge tariffs on Canadian exports and the shock of Prime Minister Justin Trudeau are key tactics in a negotiating strategy to extract better trade terms for the U.S., according to people who have worked with or closely watched him over the years. .
Trump is promising to impose a 25 percent tariff on all goods entering the U.S. from Canada and Mexico on Jan. 20, his first day in office, unless the countries curb the flow of drugs and immigrants across their borders.
President-elect since then Following that threat by mocking Trudeau by calling him “the governor” and referring to Canada as the “51st state” in a series of social media posts.
Analysts say the approach echoes the trademark negotiating style Trump has used for years, both in business and in the presidency.
Stephen Moore, who served as Trump’s economic adviser during his first term in the White House, says the president-elect is aiming to gain leverage in renegotiating the trilateral trade agreement between the US, Canada and Mexico.
“I think there’s no question that that’s what he’s doing here,” Moore said in an interview with CBC News.
“I’ve seen Trump live and personally over his presidency and I’ve talked to him quite a bit about it,” said Moore, now a senior economist at the conservative Heritage Foundation.
“He uses the threat of tariffs to force countries to do things he thinks are in America’s national security and economic interests.”
The strategy ‘worked quite well’ in the first term
Although Moore is no fan of fees from the perspective of their impact on the economy, he understands why Trump is threatening to impose them on Canada and Mexico.
“He wants to make sure the trade deals we have are fair to American workers and American companies,” he said. “This has been a strategy that worked quite well in the first term, and I hope it will work in the second term as well.”
Trump used the one-two punch tariffs and taunts against Canada in 2018 during the talks leading to the Canada-US-Mexico Agreement (CUSMA). He imposed tariffs on steel and aluminum, threatened tariffs on car exports and called Trudeau “very dishonest and weak.”
Eugene B. Kogan, who teaches advanced negotiation skills at Harvard and has written about Trump’s negotiating style says the president-elect has long used the tactic of denigrating his competition as a way to gain leverage.
“Prime Minister Trudeau is in political trouble at home and I think President-elect Trump is feeling the weakness,” Kogan said in an interview with CBC News. “He smells blood.”
He says Trump “is an extremely rational, brutally ruthless analyst of human frailty and political weakness, and that’s when he feels most of his impact.”
He believes Trump thinks “on an almost 24-hour basis” about how to exploit an opponent’s weaknesses and turn them into opportunities for gain.
Launching a threat of tough tariffs against such a longtime trading partner even before taking office is emblematic of what Kogan describes as Trump’s “win-lose” approach to negotiations.
Power movement to create leverage
“He’s making a power move driven by a desire to create his own leverage,” Kogan said. “The basic message is: ‘I will make it unpredictable for the other side, so much so that the other side will be under pressure to make concessions.’ ”
Trump’s transition team did not respond to a request for comment.
There are a number of observers, from Wall Street to Bay Street and Congress, who see Trump’s dragging out tariffs against Canada and Mexico as a means of gaining leverage in talks on the three-way trade deal, which is up for renewal in 2026.
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“This latest tariff threat effectively marks the beginning of negotiations,” international wealth management firm UBS Global said in a recent note. informative note.
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“Trump’s best and most likely use of tariffs is as a bargaining chip to force Canada into concessions” when CUSMA is renegotiated, wrote the economist TD Marc Ercolao.
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“Right now, I see everything Trump is doing on tariffs as a negotiating tool,” said Iowa Republican Sen. Chuck Grassley. according to Politico.
Trump’s pick for treasury secretary, Scott Bessent, praised the president-elect for using tariffs as “a negotiating tool with our trading partners,” in an op-ed published in Fox News website immediately after the elections.
Marc Thiessen, a senior speechwriter for former US President George W. Bush and a fellow at the American Enterprise Institute, said last week that Trump is both serious about imposing tariffs on Canada and using them to negotiate.
“If they don’t come and do what he wants them to do, then he’s going to impose those tariffs,” Thiessen told Fox News. “I think he also knows that Justin Trudeau is incredibly weak.”
US President-elect Donald Trump has claimed on social media that he asked hockey icon Wayne Gretzky to run for prime minister during a Christmas visit. It’s Trump’s latest comment on Canadian politics, after mocking Canada becoming the 51st US state and meeting with ‘governor’ Justin Trudeau.
On Christmas Day, Trump posted that he had asked Wayne Gretzky to “run for prime minister of Canada” and that the hockey legend “would win easily.” He also thought about buying Greenland and taking control of the Panama Canal.
Trump’s comments about Canada, Mexico, Greenland and Panama are tied together by the common thread of opposition from Russia and China, an unnamed transition official told The Washington Post.
“This is not just a scratch, there is a coherent connective tissue to all of this,” the Post quoted the official as saying. “Trump knows what levers to pull.”
Even if there is consensus that Trump’s tactics when it comes to Canada are designed to gain influence, one big question that remains unanswered is what his ultimate goal might be.
Many suspect that a crackdown on fentanyl trafficking and illegal immigration — Trump’s stated reasons behind the tariff threat — is all he wants.
That view was given some credence on Friday when two Trudeau cabinet ministers met two of Trump’s cabinets in Florida to brief them on Canada’s plan to improve border security.
Foreign Affairs Minister Mélanie Joly and Finance Minister Dominic LeBlanc traveled to Florida on Friday to discuss potential tariffs with representatives of the incoming Trump administration.
A senior Canadian government source told the CBC’s Katie Simpson that Trump’s obsession with the U.S. trade deficit with Canada came up in the meeting.
Trump has repeatedly — and inaccurately — characterized the trade imbalance as the U.S. subsidizing Canada.
Crude oil imports fuel the US trade deficit
The trade deficit, which reached about US$75 billion in 2023, is largely the result of Canada’s record high crude oil exports to its southern neighbor.
The US imported more oil from Canada last year than from all other countries combined, according to statistics from US Energy Information Administration.
Moore says he thinks Trump’s goal is to make North America “geopolitically the most important region in the world when it comes to energy.”
In his 1987 book The art of the dealTrump wrote, “Leverage: don’t make deals without it.” There is ample evidence that nearly 40 years later he is still following this maxim.
