In the wake of Donald Trump’s resounding return to the White House, Canada finds itself bracing for a new wave of challenges that could significantly alter the fabric of its relationship with its southern neighbor. With Trump’s second presidency likely to bring increased tariffs, complex asylum dynamics, and pressure on Canada’s defense spending, Prime Minister Justin Trudeau and his Cabinet have swiftly mobilized a team of diplomatic heavyweights to ease anxieties and prepare for potentially turbulent waters.
Prime Minister Trudeau has downplayed the implications of Trump’s victory for Canada’s stability. “Canada will be absolutely fine,” he assured, as his administration works to underscore its credentials in navigating relations with a U.S. administration under Trump. This confidence-building effort was swiftly backed by Canada’s Deputy Prime Minister Chrystia Freeland and Industry Minister François-Philippe Champagne, each reinforcing their government’s readiness to manage the complexities ahead.
As Canada faced news of Trump’s victory, a core group within Trudeau’s Cabinet sprang into action. This “tiger team” of key ministers, from Freeland to Champagne, reached out to their American counterparts. This team carries historical ties to Trump’s first administration, and Trudeau’s advisors are confident these connections can facilitate smoother negotiations amid the incoming U.S. policy shifts.
“The relationships built over time with Trump’s inner circle are invaluable,” said Champagne, emphasizing that maintaining these connections has been part of a deliberate long-term strategy. The team believes these ties will prove crucial as Trump’s transactional approach to leadership unfolds once more. Champagne and other Cabinet members have cultivated connections across U.S. state and federal levels, having made over 75 trips to 33 states over recent months to emphasize Canada’s strategic relevance in key sectors, including critical minerals, energy, and semiconductors.
One of the first looming threats of a second Trump term is the potential imposition of tariffs, notably the 20 percent tax on key Canadian goods. This prospect has sent tremors through Canada’s business community, particularly in the oil and gas sector, where major stakeholders are already on edge about potential shifts in cross-border trade.
Trudeau’s administration is striving to calm fears by leveraging Canada’s critical role in the U.S. economy. With the U.S. importing nearly CAD $600 billion worth of Canadian goods annually, Canada remains the largest U.S. trading partner — a position that Trudeau’s team believes will help balance the scales in any negotiation. Freeland is quick to remind Canadians of the role she played in negotiating Trump’s last revamp of the North American Free Trade Agreement (NAFTA), which evolved into the United States-Mexico-Canada Agreement (USMCA).
“Canada’s role in the U.S. economy is recognized, and we’re prepared to defend it,” said Freeland, emphasizing the stakes of Canada’s exports being larger than those of China, Japan, the U.K., and France combined. This trade history, she argues, could offer leverage against potential tariffs that could hurt American businesses as much as Canadian ones.
Trump’s renewed tenure could also lead to heightened asylum flows across the Canada-U.S. border, an issue that has previously created significant logistical and political challenges. The controversial Safe Third Country Agreement, which mandates that asylum seekers must file refugee claims in the first country they enter, could be thrust back into the spotlight, especially as the U.S. refines its own immigration policies under Trump.
Trudeau’s administration is prepared to address these complex migration dynamics while remaining committed to Canada’s compassionate stance on refugees. Officials close to the matter indicate that Canada’s resources, from border management to community services, are being assessed to respond to potential changes in U.S. policy that may redirect more asylum seekers northward.
With NATO spending obligations an ongoing concern, Trudeau’s government has faced mounting pressure, especially from Trump, to accelerate Canada’s defense spending. Despite Canada’s strong alliance with NATO, it remains below the target defense budget contribution of 2 percent of its GDP. Historically, Canada’s defense spending has been a focal point of Trump’s criticism, and members of Trudeau’s Cabinet anticipate renewed scrutiny.
Foreign Minister Mélanie Joly recently signaled a shift in tone, describing herself as “hawkish” about Canada’s commitment to NATO, a term rarely used by members of the Canadian government. Her stance represents an alignment with Deputy Prime Minister Freeland’s conviction that showing strength is the best approach when dealing with Trump’s administration. As Trump’s calls for NATO countries to contribute more have intensified, Freeland emphasized Canada’s “unequivocal” support for Ukraine — a stance she believes will maintain Canada’s position as a valuable NATO member even amid Trump’s calls for burden-sharing.
In light of Trump’s promise to end the Russian invasion of Ukraine without clear details, Trudeau’s team has redoubled its diplomatic engagements with NATO allies and Ukrainian officials to reaffirm its position on Ukraine.
While Trudeau and Trump’s relationship has seen public spats and occasional hostility, recent outreach efforts have focused on finding common ground. The two leaders engaged in a delayed congratulatory call that, according to sources close to the conversation, covered a wide range of topics: trade, North American security, and the ongoing opioid crisis exacerbated by fentanyl trafficking from China. During this exchange, Trump reportedly reflected positively on their past working relationship, drawing comparisons between his comeback victory and the political resilience of Trudeau’s father, Pierre Trudeau.
While the tone of the call was reportedly positive, the Prime Minister’s Office remains aware of the complex nature of dealing with Trump. His tendency toward transactional diplomacy means Canada will need to balance pragmatism with caution to protect its national interests.
In anticipation of Trump’s policy pivot, Trudeau recently reinstated a special Cabinet committee focused solely on managing the Canada-U.S. relationship. The committee includes ministers whose portfolios are directly impacted by U.S. decisions — from energy and environment to trade and immigration. This setup mirrors the approach Trudeau adopted during Trump’s first term, marking the Prime Minister’s seriousness about navigating an unpredictable political landscape.
Environmental policy is one area where Canada plans to differentiate itself from Trump’s stance. “Canada is independent from the United States,” said Environment Minister Steven Guilbeault. “We adopt our own laws and regulations, and we won’t be a carbon copy of U.S. policy.” Trudeau’s government is committed to its climate goals, signaling that while cooperation with Trump’s administration will be sought, Canada’s environmental priorities will remain Canadian-first.
One of the Trudeau administration’s core messages to U.S. decision-makers is the strategic role Canada plays in North American supply chains, from critical minerals essential to electric vehicle manufacturing to its contributions in the energy sector. Champagne, who has tirelessly engaged with U.S. governors, is confident that the “Team Canada” approach will bear fruit, emphasizing that their extensive diplomatic work has solidified Canada’s standing as a key ally in critical supply chains.
