How Canada Is Navigating Trump’s Threats

U.S. President Donald Trump has upended relations with several traditional allies but none perhaps more so than Canada, the world’s 11th-largest economy and a country with which the United States shares the planet’s longest land border. Trump has repeatedly referred to Canada as the “51st state”—an unsubtle threat to absorb its territory; he has imposed sanctions on Ottawa, harming its companies and consumers; and he has driven Canada to look to Europe and elsewhere for stable trade and defense partnerships. On the sidelines of this week’s U.N. General Assembly, I caught up with Anita Anand, Canada’s foreign minister. What follows is a lightly edited transcript of our conversation. Ravi Agrawal: Let’s start with the trade war that your country has with the United States. President Donald Trump says, “We don’t need Canada. They need us.” How do you respond to that? Anita Anand: Our economies, which have been integrated for decades upon decades, are mutually interdependent. If you look at the auto sector, for example, prior to a car finally being produced, it travels back and forth across the border between Canada and the United States several times. It’s just one example of the way in which, over the decades, the auto industry has become symbiotic. This is the case with many other sectors of our economy. Part of what the negotiators are focusing on are the sectoral tariffs, outside of the Canada-United States Free Trade Agreement, in steel, aluminum, lumber, and auto, for example, where the economies and supply chains are integrated. They’re trying to reach a result that benefits both populations. RA: Countries are responding to Trump’s tariffs in a variety of ways. Some have tried flattery and gifts; some are retaliating. Your administration has taken a tough stance—a strategy that helped get Prime Minister Mark Carney elected. I’m curious whether there’s a sense now that this path also comes with a steep economic cost. And if so, how is your administration thinking through those costs and what it means for the Canadian people? AA: A vast majority of goods continue to pass through the Canada-United States border every day without tariffs under the Canada-United States Free Trade Agreement. The work that we will continue to do is to act in the sovereign best interests of our country. That means not only working on trade with the United States but also diversifying our trade relationships across the board. Prior to Prime Minister Carney’s election, we were and continue to be the only G-7 country that has a free trade agreement with every other G-7 country. In addition, over the past year, Canada has signed over 20 security, defense, and economic agreements with countries around the world in service of the trade diversification agenda. Let’s look at the Indo-Pacific. We signed a free trade agreement with Indonesia last year. We’re negotiating one with the Philippines right now. We hope to conclude a comprehensive economic partnership agreement with India and a free trade agreement with ASEAN [the Association of Southeast Asian Nations] before the end of this year. That body of work is focused on the Indo-Pacific, but that is an example of what we are doing around the world in terms of trade diversification. It is work that will continue while the Canada-United States relationship and trade negotiations are occurring. RA: Two years from now, if we have a new administration in the United States and the relationship with Canada reverts to the norm, what happens to all these other global moves that Canada has made to de-risk from the United States? AA: The work that we are doing now is in service of our economic robustness, our longevity, our sovereignty, as Canadians and as a country. This would be the strategy regardless. We’re doubling non-U.S. trade over the next 10 years. As the prime minister says, we can give ourselves much more than any country can take away. In other words, we need to ensure our long-term resilience, and that is the case regardless of the trade negotiations between Canada and the United States. It is why the Canada-European Union relationship is growing. It is why the Canada-ASEAN relationship is growing. It is why we will continue to take a bold foreign-policy approach all over the world. RA: So let me talk a little bit then about the Canada-Europe relationship. I heard the phrase “associate member” being used a week ago. What would that entail? What does that mean? AA: The nomenclature that is being attached to the growing relationship between Canada and the EU is not the focus of the work we’re doing building up to the Canada-EU summit in Montreal at the end of October. Our focus is on several pillars, where you will see deeper integration on critical minerals; AI and quantum; trade and investment following on from the Canada-EU Comprehensive Economic and Trade Agreement; and people-to-people ties, including in education, students, and the Erasmus program. The substantive discussions between our teams right now are focused on these pillars. After that, perhaps the nomenclature will be addressed. But it would be premature to attach a name, a label, to this relationship as it is taking shape in this moment. So that work continues. The Canada-EU relationship has actually been growing over the last number of months. Let’s look at the fact that Canada is the only non-European member of Security Action for Europe. We’re the only non-European member invited to the European political community. We have a strategic defense partnership with the EU. We are very much focused on how to build the relationship out from those individual pieces to be something more comprehensive. RA: I want to ask you about Ukraine. I just got back from there last week, and my sense is that Ukraine is in for a long, tough winter. These new jet-powered Shahed drones seem very dangerous. They’re almost like cruise missiles. I know that previously as defense minister, and now as foreign minister, you’ve long been a friend of Ukraine. What’s your sense of what this winter looks like from your vantage point, and how can Canada help? AA: We hosted Ukrainian President Volodymyr Zelensky and Foreign Minister Andrii Sybiha last week. The relationship between our two countries is ironclad and has been long before Feb. 24, 2022. We have trained over 50,000 members of the Ukrainian Armed Forces under Operation Unifier, with approximately 4,000 sanctions against Russian oligarchs and entities in place. We’re holding a conference next week on the return of Ukrainian children. This is work that continues all year-round and isn’t focused on one particular season. The point you’re making about Ukraine’s longevity and survivability through the winter is a good one, in the sense that we have been multilaterally discussing how we can band together to ensure that Ukraine has what it needs through the winter months. Canada will continue to bring countries together for that conversation and look for tangible items that we can put on the table. One conversation I had with Minister Sybiha focused on ensuring power systems that individual families need are in place—generators are one answer to that question. Another conversation that we are embarking on relates to the preservation of energy infrastructure. I’ve been having conversations with Minister Sybiha and a number of other countries to ensure the preservation of the energy infrastructure across energy sources. RA: I’m curious about the generators. Is that because they’re decentralized and therefore harder to attack? AA: It is a backstop to instances where the energy grid is unworkable, unusable, or out of commission because of a missile attack so that families have some reliable means of heat and electricity during the coldest of months. We have to remember that children attending schools in shelters has become the norm for Ukrainian families, which in and of itself requires us, from a humane and humanitarian standpoint, to find whatever means possible to support Ukraine during the winter and all year-round. Canada is unlike many other countries in the sense that our commitment to Ukraine, until it wins this war and beyond, will not change. We are ironclad with Ukraine—and not just because we have 1.3 million Canadians of Ukrainian descent in our country. It’s because Ukraine and the Ukrainian Armed Forces are fighting for the principles that we all hold dear. People use the term “territorial integrity” fairly frequently, especially here at the United Nations. But when you think about the fact that Russian elections are being held in territory that is not Russian, these words take on a specific, live meaning. RA: Given everything you’re saying and your support for Ukraine, how worried are you about Russian reprisals? There are so many different arenas in which Russia could hurt Canada. There’s the Arctic Circle. There’s cyber, hybrid—so many others. AA: Hybrid attacks, DeepSeek, for example, are occurring. We are seeing Russian infrastructure move farther and farther north toward the Arctic Circle. I have continued to say, since being appointed as foreign minister, that protecting and defending the Arctic is our top priority. We have to protect our homeland. That’s why we’re investing $80 billion in national defense. That’s why we are undertaking procurements that are materially going to enhance our own capabilities, such as submarines over the horizon radar—the list goes on. Rest assured, we are cognizant of the Russian threat, and we don’t underestimate the need to address the cyber, hybrid, and physical attacks that Ukraine is facing. RA: Everything you’re describing—the surge in defense spending, the trade spat with the United States—this is all going to have a strain on Canada’s fiscal numbers. What is your sense of how much pain Canada can endure and how much pain its people are willing to endure? How are you communicating that with people? AA: Prime Minister Carney, having been the governor of two central banks, decided last year that we would divide our expenditures between operating and capital. We are en route to balancing our operating expenditures over the next year, which means that the work we’re doing on the comprehensive expenditure review—the internal work we are doing relating to responsible fiscal management—is showing results. On the capital expenditure side of things, we are undertaking investments that our country needs at this moment in time, such as ensuring that the Canadian Armed Forces have the equipment, housing, and pay they need to serve our country at the same time. Taking you to the investment summit that we held last week in Toronto, we are seeing increasing levels of foreign direct investment—commitments of $500 billion last week alone into Canada through 10 national projects, from ports to highways to airports. Across the board, our work is to shorten the time period, the path-to-permit time period, so that investment continues to flow into our country toward our national projects.