FIRST READING: Canada where Trump’s ‘hardball’ strategy failed hardest, says analysis

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First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.

The basic premise of U.S. President Donald Trump’s trade war on Canada was simple: The massive U.S. economy could dictate favourable terms to a smaller and more dependent neighbour.

Instead, the Canadian economy proved more resilient to U.S. tariffs than almost anyone expected. The Canadian electorate went all-in on a strategy of retaliation. And now, with tariffs threatening several key Senate races in U.S. border states, it’s the Trump White House that is now backing down on some of its Canadian trade barriers.

Add it all together and, according to an analysis published Wednesday by the U.S.-based Council on Foreign Relations, Canada is where Trump’s “hardball” approach to trade has gone sideways the most.

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Trump’s White House confused “economic size with bargaining leverage,” it says. As a result, the U.S. is now “mired in a losing trade war with its economically much smaller and militarily much weaker neighbor to the north.”

The analysis cites the 1977 book Power and Interdependence, which devotes an entire chapter on how, despite its small size, Canada held a curiously large amount of leverage in its past dealings with Washington.

The authors examined 50 years of international disputes between the two countries – ranging from liquor taxes to lumber duties to fishing rights – and were surprised to find that Canada usually came out on top.

While the U.S. could obviously impose great pain on the Canadian economy, Canada’s enmeshment with the U.S. gave it a unique ability to do the same in return.

“And she (Canada) was often willing to do that because of asymmetrical salience: The relationship was more important to Canada than to the United States,” reads the book, written by the American political scientists Robert Keohane and Joseph Nye.

Power and Interdependence also pointed out that Canada has a political enmeshment with the U.S. unlike any other country. It cited Canadian data from 1968 tracking 6,500 cross-border visits by government officials from both countries, the vast majority of whom were low-level federal and provincial bureaucrats, rather than diplomats.

“The classical image of governments interacting through their foreign offices is clearly inappropriate in the Canadian-American case,” it read.

Wednesday’s Council on Foreign Relations article noted that Canadian exports to the U.S. are also disproportionately comprised of raw materials that are critical to the U.S. economy, such as oil and potash.

“Given such complex relationships, there are sharp limits to how far any U.S. administration can push Canada around,” it reads.

While Canada has been one of the most conspicuous targets of U.S. tariffs, it has been a general tactic of the Trump administration to threaten punitive tariffs against all its trade partners in exchange for new terms more favourable to the U.S.

And for the most part, such hardball trade tactics have generally worked.

An August paper out of the University of Calgary’s School of Public Policy noted that the Trump administration has signed 21 new trade deals since its 2025 inauguration, almost all of which offer asymmetric terms.

Japan, for instance, offered US$550 billion in U.S. investment commitments in exchange for Washington dropping its threatened tariff rate from 25 per cent to 15 per cent. Similarly, South Korea put up US$350 billion in promised investments and accepted a 15 per cent tariff rate on goods that had previously been duty free.

“The U.S. won major concessions across many of its new agreements — including investment commitments, procurement obligations and strategic policy alignment — without making like concessions itself,” wrote the University of Calgary authors, adding “the burden of adjustment has fallen overwhelmingly on U.S. partners and not on the U.S.”

Canada is the only country other than the People’s Republic of China to have responded to a Trump trade war with counter-tariffs.

And in walking away from trade negotiations last August, Ottawa has broken with many of its peer countries in refusing to accept a package of higher U.S. tariffs in exchange for a return to normalized trade relations.

“Canada stands alone in resisting U.S. demands,” read the Council on Foreign Relations analysis.

Instead, the first cracks seem to be emerging from the U.S. side.

Just this week, Maine Senator Susan Collins claimed credit for a sudden round of White House tariff exemptions on Canadian imports that were having an outsized effect on the state’s fruit and potato growers. (Washington replaced them by introducing tariffs on other Canadian exports with less effect on Maine.)

The tariffs have proved to be a singular factor threatening Collins’ re-election in the Nov. 3 midterms, and in a statement she pledged to “continue working directly with Administration officials to seek additional relief from tariffs and encourage a broader trade agreement with Canada, our neighbor, ally, and largest trading partner.”

It’s been a similar story in the tariff-afflicted border state of Michigan, where Republican Senate candidate Mike Roger came out hard against the trade war in his campaign’s final stretch.

“Here in Michigan we know that Canada is not our enemy. We need to end this tariff war now,” he said in a campaign ad.

And even Trump has admitted that his tariffs on Canadian aluminum have mostly just raised prices on a critical import with no ready alternatives.

“This country desperately needs aluminum,” Trump said during an August telephone rally for Mike Mazzei, a Republican candidate for governor in Oklahoma. “We don’t have it. We get it all from Canada for the most part, and we need it badly.”

Perhaps most notably, just last week White House economic adviser Kevin Hassett volunteered in an interview that the U.S. is “very close” to a deal with Canada and that the White House “has been talking to … Canadian counterparts all week.” At a Michigan rally, Trump similarly promised “we’ll have that settled pretty soon” on the question of a Canadian trade agreement.

To which Prime Minister Mark Carney replied this week that Canada is not “at that position right now.”

It was only after the B.C. election had concluded that observers noted the extremely convenient timing of an Oct. 24 election day: It fell just hours after several departing members of the NDP caucus became eligible for a legislative pension.

B.C.’s Members’ Pension Plan – just like its federal equivalent – only kicks in after an MLA has served six years in the B.C. Legislative Assembly.

Once it does, it’s one of the most gold-plated pensions in the country. MLAs pay just 11 per cent of their legislative income into the plan, and when they turn 65 they become eligible to collect a pension equivalent to their highest-paid years as a legislator.

So in an extreme case, an MLA who worked just six years earning the base salary of $122,000 could pay just $80,520 into the plan across their career.

Nevertheless, once they turn 65, that same legislator would still be eligible to collect $122,000 per year until they die. If they make it to age 90, say, that’s a $3-million payout against an $80,520 contribution.

B.C.’s 2020 election fell on Oct. 24. So any MLA elected for the first time in 2020 became eligible for a pension on Oct. 23, 2026: The day just before British Columbians went to the polls.

For four NDP MLAs (Brenda Bailey, Kelly Greene, Susie Chant and Harwinder Sandhu), this means that if outgoing premier David Eby had set Election Day just a couple days earlier, they wouldn’t have qualified for a pension.

There were other MLAs who also met the six-year threshold on Oct. 23 (including incoming Premier Lorne Doerkson), but it’s a moot point as they won re-election and remain MLAs.

It’s unknown if the pension deadline ultimately factored into Eby’s timing of the election. But if it had, it wouldn’t be the first time the Canadian electoral calendar has seemed to be influenced by whether doomed politicians will get their pension.

In May 2024, the Trudeau government quietly moved the fixed date of the 2025 election from Oct. 20 to Oct. 27. It was ostensibly done to not overlap with the Hindu festival of Diwali, but the seven-day delay also ensured that several Liberal MPs first elected in 2019 would just meet their pension eligibility before suffering a likely defeat.

In the end, it didn’t matter. The 2025 election ultimately occurred in April as a result of an early call by new Liberal Leader Mark Carney.

First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.

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