Canada ignored the warning signs that the U.S. was changing

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Why have Canadian business leaders, policy makers and analysts invariably been on their back feet making miscalculation after miscalculation in dealing with the second Trump administration?

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It’s not as if we haven’t been here before. And more to the point, it’s not as if what is now occurring was not clearly telegraphed months if not years in advance.

Clear warnings were there before the most recent U.S. election including in these pages, on more than a few occasions.

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We chose not to see, listen or prepare. Instead, in an act of wilfull blindness, we chose nostalgia and hope over realism. That choice was made through a combination of bad information and analysis driven largely by a refusal to let go of a romanticized relationship with a United States that is no longer there and will not return.

The country has been driving into a hostile new environment while looking through the rearview mirror. Rearview mirrors are great for backing up — going forward, not so much.

There will at some point need to be a reckoning for our actions that have made a bad situation worse.

But, looking forward, the ability to get off of our back foot is within our control and it starts by changing the institutions, mental and physical structures that have shaped and continue to shape the thinking that has led us into the current situation.

There were clear signals going back five years that if U.S. President Donald Trump were to return, so would tariffs. There was clear writing from within the America First movement over the past few years as to what those tariffs might look like. A few Canadians read former U.S. trade representative Robert Lighthizer’s treatise on economic policy, and some read Project 2025, the blueprint for a second administration. But this work came from a broad movement. In the case of Project 2025, fifty U.S. think-tanks were involved. A visit to the Heritage Foundation, which organized the project, was not enough to fully understand what had been developed. Wider outreach and deeper investigation were clearly needed. And these voices on the New Right in the U.S. needed to be brought to Canada, not as endorsement, but rather to understand and fully appreciate the danger of what was coming before it hit and while we had time to prepare.

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Had we paid attention to, instead of reflexively dismissing, what was happening in March of last year, when Trump seized the GOP presidential nomination, we would have started, quietly and in the background, to prepare for a second administration. Things such as economic modelling, identifying vulnerable industries and thinking through the counter-measures and assistance programs we are now rushing, in a panic, to develop and deploy. In November, when Trump won the general election, we would have been prepared to move from quiet to active preparation and the implementation of well-reasoned responses.

Instead, we chose to believe that this would not happen because it did not make sense, in our understanding of the U.S. and traditional economic theory and policy, that the Americans would inflict this sort of pain on themselves.

Yet, they have done so —  just as they said they would.

Our challenge goes beyond the immediate, endless challenges from a Trump administration. The U.S. is in the midst of generational change that will continue to evolve beyond the remaining two hundred plus weeks of a Trump administration. We face a potentially equally radical shift on the left and right.

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The America First movement is both ascendant and at war with itself, with the economic populists unhappy with the rise of the tech oligarchs and the sudden appearance of Elon Musk. The left, meanwhile, is adrift with little indication of what will eventually emerge as it remakes itself. But whatever that maybe it will be yet another challenge to our understanding of and ability to engage the U.S.

Institutions within the U.S. that we trusted and upon which we have depended are being remade through drastic personnel cuts and executive actions. Regardless of court challenges and potential reversals, deep, lasting damage is being done.

It is now beyond painfully obvious that what we face is a profound and radical break from the past and that it will be generational. The only certainty going forward is that we are not going back to what was before. The visceral anger with the former status quo that has simmered then boiled over on the left and right will guarantee that.

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Canada’s favourite cheap outs on difficult issues — a working group, special initiative or shuffling bureaucrats — will not be enough. We are going to have to throw out the baby with the nostalgic bath water to develop new thinking. This requires new people, new institutions, and increased investment in a new relationship with a new U.S.

Whether we will do so is, scarily, still an open question.

Carlo Dade is a Senior Fellow with the Canada West Foundation

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