Canada has no choice but to retaliate against U.S. import tariffs, even if it worsens the short-term economic outlook for the domestic economy. Christopher Sands, director of the Wilson Center’s Canada Institute delivered that message on a webinar hosted by the Global Risk Institute on Tuesday.
“Canada has to take this position,” Sands said. “A lot of Americans worry that they are no longer dealing with a Canada that can do, but instead they’re dealing with a Canada that can’t. … That concern is terrible for the bilateral relationship.”
U.S. President Donald Trump has promised a 10% tariff on Canadian energy products and a 25% tariff on other products, to begin March 4. On Wednesday, Trump created confusion when he said the tariffs would begin April 2. The White House issued a correction, stating a March 4 start date.
Sands told his audience that the risk of not responding with a tax on U.S. imports would weaken Ottawa’s position when it comes time to review the Canada-U.S.-Mexico free trade agreement. He expects that to happen ahead of the scheduled renegotiation in 2026.
“There’s that phrase from the cowboy movies in the past — the Mexican standoff,” he said. “The bandito is cornered and he says, ‘Well, I may go down, but I’m taking you with me.'”
In an interview on Wednesday, Nez Aquino, chief operating officer at Global Risk Institute, said she agrees with the need for “some kind of strong stance,” even if it means a rise in the cost of living at an already difficult time.
“The uncertainty around this administration has been so large that if we don’t respond, the probability of the tariffs escalating in some shape or form is still there,” she said.
An erosion of confidence
For at least the remainder of Trump’s second term in office, Sands believes the tariff rhetoric coming out of Washington has made Canadians wary of doing business with the U.S.
“You don’t know whether you should invest now,” he said. “You don’t know whether your supply chain is going to have to be reworked quite dramatically. So this is a corrosive erosion of confidence that will have an economic impact and lead to a certain amount of caution in the near term.”
Sands said the anti-Americanism that has begun to gain momentum is significant, and “not likely to be fleeting.” Young Canadians experiencing this for the first time are forming opinions of the U.S. that will show up in our politics in the years ahead.
“It is the end of a particularly remarkable period,” Sands said, “the belief that the U.S. was a country that would abide by rules that we made together.”
This story has been edited.