Canadians watched Donald Trump’s Oval Office media availability with Prime Minister Mark Carney in a state of high anxiety. Would Trump and his lieutenants attempt to humiliate Carney as they had Volodymyr Zelenskyy? We were relieved when Trump began by making nice to Carney [all quotes taken from the transcript]: “Canada chose a very talented person, a very good person … And you ran a really great race. … I thought you were excellent. And I think we have a lot of things in common.”

In the Oval Office

What then followed was Trump’s stream of consciousness touching on the Houthis, trade negotiations with other countries, investment in the U.S., and the failings of Joe Biden, Barack Obama, and Gavin Newsom. But when Trump discussed Canada, he repeated all the lines he has been using since his election.

First, the desire to take over Canada: “when you get rid of that artificially drawn line [the border] … that’s the way it’s meant to be,” “It would really be a wonderful marriage,” and in response to Carney, “never say never.”

Second, the threats to Canadian industry: “we don’t really want cars from Canada. … We really don’t want Canadian steel and we don’t want Canadian aluminum and various other things, because we want to be able to do it ourselves.”

Third, the repeated lie: “it’s hard to justify subsidizing Canada to the tune of maybe $200 billion a year.”

Finally, the personal insults: “I didn’t like [Mark’s] predecessor [Justin Trudeau]. [Trade Minister Crystia Freeland] was terrible, actually. She was a terrible person.”

Canadians remember that the first time Trump met Justin Trudeau he was as enthusiastic and effusive as he was meeting Carney. What changed, of course, is that Trudeau pushed back. Trump’s anger about Chrystia Freeland is because she drove a hard bargain in the USMCA negotiations despite being a woman. We will not be surprised if Trump comes to dislike Carney as much as he disliked Trudeau and will call Carney weak, pathetic, or a loser. If Canada is represented in negotiations by Foreign Affairs Minister Melanie Joly and Ambassador Kirsten Hillman, Trump will opine that they too are nasty women, just like Chrystia Freeland and Hillary Clinton.

Behind Closed Doors

The purpose of Carney’s trip to Washington was to begin negotiations about trade and security issues between Canada and the U.S. that could lead to an agreement to revise USMCA. The Carney Government wants to have the tariffs on steel, aluminum, cars, and oil exports removed and to have the Trump Administration sign a new treaty (since it no longer abides by USMCA) that would preserve integrated North American production in a wide range of industries.

The federal and provincial governments are attempting to set the stage for these negotiations by imposing counter-tariffs or non-tariff barriers that make U.S. industries that export to Canada feel the pain; by working with integrated North American industries, most notably auto manufacturers, to lobby the Trump Administration; and by public diplomacy, such as media advertising and billboards. In addition, as U.S. consumers and producers start to feel the pain of a much more acrimonious trade war with China, we are hoping they will reject a second trade war with the other major U.S. trading partners, Canada and Mexico. Finally, there are rumours about the coordinated dumping of U.S. debt on global capital markets

If Trump is Serious

In his successful campaign, Mark Carney made Trump the key issue, and used the line “he wants to break us so that he can own us.” In other words, Trump’s theory is that by closing the U.S. market to Canadian producers, he will kill major Canadian industries, impoverish Canadians, and make us beg the U.S. to annex Canada to maintain a decent standard of living.

At this point, we don’t know if the things Trump said to Carney in the Oval Office are serious statements of administration policy or the trash-talk and mind-games some negotiators use to put their counterparties on edge. There is much recent history of major powers attempting the conquest of, or exertion of control over, their nearby neighbors, such as China vis-à-vis Tibet and Taiwan, and Russia vis-à-vis Ukraine. Trump’s aggressive stance towards Greenland and Panama is evidence that he too sees the world this way.

When the negotiations begin, we will have a moment of truth. Is Trump willing to weaken the U.S. economy to launch a war of economic attrition against Canada? If so, there may well be no new trade deal. Canadians must prepare for this darker possibility.