ALBERTA—In 1961, US President John F. Kennedy said before the Canadian Parliament in Ottawa, “Geography has made us neighbors. History has made us friends. Economics has made us partners. And necessity has made us allies.”
That quote has become a touchstone of the relationship between the United States and Canada ever since. But the breakdown in trade negotiations over the weekend marks a significant shift in one of the world’s deepest and most integrated economic relationships. Canada has negotiated in good faith for eighteen months, but a year and a half in, it appears to have made a new calculation: The cost of accepting a bad deal from an unreliable partner is greater than the cost of walking away.
How did we get here?
The tariff war began before US President Donald Trump even took office. In the months before his inauguration, Trump threatened to levy 25 percent tariffs on Canadian goods unless Ottawa reduced migration and drug flows southward. Following those threats, Canada introduced a $1.3 billion border plan. In February 2025, just twelve days into Trump’s second term, Washington declared a national emergency over illicit drug flows and illegal migration from Canada and imposed 25 percent tariffs under the International Emergency Economic Powers Act (IEEPA). Canada responded by appointing a fentanyl czar and expanding enforcement. The US Supreme Court later ruled that IEEPA did not authorize presidential tariffs.
Then, in March, came tariffs on steel, aluminum, and autos under Section 232 of the Trade Expansion Act, which permits tariffs on imports deemed a threat to US national security. It is doubtful that such threats emanate from the United States’ friendly neighbor to the north. And the demands kept coming and changing. When Washington made Canada’s Digital Services Tax an obstacle to negotiations, Ottawa rescinded it. When Trump threatened to block the opening of the Canadian-financed Gordie Howe International Bridge, Canada agreed to share its net toll revenues with the United States.
This weekend, negotiations hit a Canadian nerve: sovereignty. As a deal appeared close, Washington reportedly introduced eleventh-hour demands restricting Canada’s ability to negotiate trade agreements with other countries and affecting “the protection of the French language and our culture,” as Prime Minister Mark Carney put it. No Canadian government can accept another country determining its lawful trade partners or how it protects its languages and culture. No Canadian would stand for it.
So how do we get back to the table?
Reset it. Start with the premise that Canada is not taking unfair advantage of the United States. This relationship is mutually beneficial. Canada is the number one export market for twenty-six US states and a top-three market for forty-five. Canadian steel, aluminum, and other inputs feed American supply chains and help produce goods the United States sells at home and around the world. The bilateral relationship is also remarkably balanced once energy is considered. The United States’ merchandise deficit exists overwhelmingly because it buys Canadian oil, natural gas, and electricity, all products it needs and wants more of. Trump’s interest in reviving the Keystone XL oil pipeline underscores the contradiction.
Focus on the big picture. Canada and the United States are not simply trading partners. Together with Mexico, the three countries form an integrated North American economic bloc with the scale, energy, resources, technology, and talent to compete globally. The goal should be a “Fortress North America”: a more secure and competitive continent built around integrated energy, critical minerals, manufacturing, technology, and supply chains. At a time of intensifying competition with China, the strategic question should not be how one North American partner extracts a concession from another, but how all three make North America stronger.
Take sovereignty off the table. Return to negotiable economic issues: steel, aluminum, autos, and lumber. Put energy on the table as an opportunity, not a trade deficit. Greater Canadian energy exports and infrastructure, potentially including Keystone XL, could strengthen continental energy security while giving Washington a win.
Above all, make certainty part of the bargain. Canada needs confidence that meeting agreed conditions will produce a durable agreement, not one vulnerable to the next hastily imposed tariff.
The United States can continue using Canada’s dependence as leverage. But if it does so often enough, Canada will ultimately make itself less dependent.