After a last-minute deal to delay sudden across-the-board 25 per cent tariffs, Canadian legislators and industry stakeholders met to strategize about future challenges

Days after a sweeping 25 per cent tariff imposed by the U.S. was temporarily avoided, hundreds of industry leaders and government officials met in Toronto this month.

The Canada-U.S. Economic Summit sought to capture perspectives from Canada’s major cross-border industries, including the auto and energy sectors, to hash out a plan to deal with near- and long-term trade headaches between Canada and the United States.

“The rules of the game have changed,” said minister of Innovation, Science and Economic Development, François-Philippe Champagne, in his remarks to the press.

“What may have happened over the last few days, it’s a wakeup call.”

Canada and the U.S. are locked in an increasingly heated spat just weeks after President Trump’s inauguration in January. Two days after the Economic Summit Trump signed an executive order imposing a 25 per cent tariff on all imported steel and aluminium products into the United States.

Most of the U.S. imports of those products come from Canada and Mexico.

Several attendees at the Economic Summit were heard remarking on the speed of the changing situation and Trump’s latest steel and aluminium tariff threat bears that out.

As a result of the chaos, understanding what the American government’s intentions are is a moving target and creating an effective response is a challenge.

But, says Trudeau, Canadians “need to start thinking tactically and strategically. We are in a moment — a moment that we have to meet […] to see not just how we get through this particular challenge over the next 30 days, or few months, but […] what may be a more challenging long term political situation with the United States.”

Inter-provincial trade barriers

For years, the difficulty of cross-Canada trade and the many barriers has been in the auto and energy sectors. It is a crippling bottleneck of material, goods and labour and. It has done lasting damage to our capacity for “Made-in-Canada products” and a robust national economy.

As one of the immediate responses, Trudeau advocated that it is finally time to strike down entrenched trade barriers erected between provinces. This could have major implications for the auto sector.

“Internal trade is something we’ve been talking about, and, quite frankly, the business community has been talking about for decades. We have to move forward on it,” says Trudeau.

“This is one of those moments and opportunities where we actually can. There’s a window open because of the context we’re in.”

Electric Autonomy reached out to request an interview with Trudeau at the Economic Summit to discuss internal trade barriers. His spokesperson declined.

However, other ministers were keen to be heard.

“We will reduce and eliminate barriers to trade inter-provincially. This is not theoretical,” said the federal minister of Transport, Anita Anand, in response to questions from reporters.

“The tangible results in the next 30 days are for us to reduce red tape, to eliminate barriers to trade and to build a domestic economy without going through Donald Trump.”

Bravado or sincerity

One of the top concerns voiced at the gathering was about how to divine the truth in outlandish statements made by Trump, including proposing that Canada becomes “the 51^st State.”

From the first utterance (and each since) the suggestion has provoked responses ranging from scorn to apprehension. It also triggered the appearance of politicians of various stripes sporting custom “Canada is not for sale” trucker hats.

The big question: is Trump’s declaration a deliberately inflammatory (and distracting) joke to be laughed off, or is it part of an expansionist agenda from the leader of the world’s most powerful military?

Trudeau said in a comment accidentally captured on a hot mic that he believes Trump does want Canada to become part of the United States.

Others are not convinced.

Beth Burke, CEO of the Canadian American Business Council and an attendee, of the Economic Summit says she and the “everyday American” do not put weight on Trump’s threats/musings.

 “Americans would never want to invade or take over or absorb Canada,” says Burke.

“Our perception is more that [the statement] is one from a position of negotiation and posturing and using it as leverage in the conversation.”

The conversation is, Burke believes, coming to a head largely around two issues: energy security and critical minerals.

Batteries and the USMCA renegotiation

While the 30-day pause on a tariff tit-for-tat between Canada and the U.S. is the public’s most immediate concern, looming on the horizon is a renegotiation of the USMCA trade agreement.

President Trump recently said, “I want to take advantage now of the car industry.”

In the age of electrification ”the car industry” not only includes electric vehicle manufacturing but extends to the full length of the battery supply chain.

No countries in North American have an end-to-end battery supply chain. But Canada has made significant strides in onshoring the production of  essential components.

“We are a nation which has all the critical minerals to power the economy of the 21st century, we have abundant energy and renewable energy,” says Champagne of Canada’s natural resource endowment.

When pressed on if Canada should limit trade of its critical minerals (many of which are used in EV batteries), Champagne said he did not think that would be a necessary step to take.

“Canada is prepared and willing to work with our American friends on the basis of mutual respect, respecting our sovereignty, respecting the dignity of our workers and our industry.”

Canadian officials largely say they are ready for USMCA renegotiations, though  there is a chance, even a likelihood that the people representing Canada in negotiations today are not going to be the ones at the bargaining table in two years.

There is still much to consider and plenty of hard work ahead. Through it all, it will be important to remember that Canada has the raw materials and goods the U.S. wants and badly needs.

Whoever is negotiating  for Canada in USMCA talks  will be able to leverage our  ability to produce critical minerals, renewable energy and advanced batteries. 

As Beth Burke from the Canadian American Business Council said, “Canada is much further along in developing their resources and have more resources than the United States.” says Burke. That’s a “conversation that Canada can lean into.”