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A month after President Donald Trump abruptly ended trade talks with Canada over an anti-tariff ad featuring former President Ronald Reagan, the two countries have yet to resume negotiations.
Earlier this week, Canadian Prime Minister Mark Carney said he’ll restart talks “when it’s appropriate,” telling Reuters that “he did not have a pressing issue to address with President Donald Trump.” Instead, Carney has been courting US rivals China and India to lessen Canada’s dependence on the United States, and the country has set a goal of doubling its non-US exports by 2035, according to the Washington Post.
The rift between America and its ally to the north is “the worst in modern history,” says former US Ambassador to Canada James Blanchard. And it’s no wonder. Trump has threatened to annex Canada as the “51st state,” and mocked former Prime Minister Justin Trudeau as its “governor.” He’s blamed the country for flooding America with fentanyl and illegal immigrants, though neither charge bears resemblance to reality. And he’s levied punitive tariffs on Canadian steel and aluminum, among other exports, all the while accusing Canada of “cheating” on trade.
Canadians, meanwhile, have rallied to the cry of “Elbows Up” and boycotted American products. Canada-US travel is down by nearly a third compared to a year ago, resulting in billions of dollars for US companies. They also elected Carney this spring, in part for his anti-Trump views, and rejected Trump-lite conservative candidate Pierre Poilievre, who also lost his seat in Parliament.
Even after Trump’s eventual departure from office, these wounds will be hard to heal, says Blanchard, who served as Ambassador to Canada under President Bill Clinton. Blanchard also served two terms as governor of Michigan and four terms in Congress.
This transcript has been edited for length and clarity. The full interview is available at Spotify, YouTube and iTunes.
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Anne Kim: You were the U.S. Ambassador to Canada during the Clinton administration—in fact, during the ratification of NAFTA, which was incredibly crucial time in the relationship between our countries. And before then, you served two terms as governor of Michigan, a state that also has deep ties to Canada. How would you characterize the current state of US-Canada relations, especially as compared to what you experienced as ambassador?
Amb. Blanchard: US relations with Canada are the worst in modern history, and there’s no one who has studied it that would disagree with what I’ve said, especially the Canadians. It’s tragic. It’s not just trade disputes, it’s the rhetoric of the president—whether he wants to refer to them as the “51st state” or to say they’re nasty or, you know, Vice President Vance saying the Canadians have treated us very badly these last few decades. He hasn’t even lived long enough to know that. Or Howard Lutnick’s foolish statements. It’s the tone and the attitude which has Canadians losing total faith in us and wondering what’s going on in the United States.
I do a lot of Canadian interviews, and I mentioned to Canadians that most Americans consider Canada our best friend and ally and partner, and they should disregard the rhetoric from the top.
Garrett Epps: I think a lot of people in this country got a kick out of the elections in Canada and the idea that the slogan was “Elbows Up”—which of course Americans didn’t know what it meant until then. But the question is whether “Elbows Up” is going to work for Canada in the long term, and whether they really can withstand what’s coming at them. We have a situation where a president, if he doesn’t like a commercial on TV, tries to slap a 10 percent tariff on all your goods. The United States is obviously economically much more powerful than Canada. How is this going to play out?
Amb. Blanchard: Well, it’s hard to know. Let me backtrack just one moment, though, to say relations were very good during the Clinton years. The Canadians didn’t know him when he got elected, and they were a little worried he was a Southerner. And they really liked Bush and Reagan. But their natural inclination is to be liberal, and once they got to know Clinton, they loved him. So it was great being his ambassador there. We dealt with NAFTA, we dealt with Open Skies, we dealt with the Quebec referendum. It was a critical time, and Clinton was fabulous. It was probably the golden era now that we look back.
By the way, I love the Reagan commercial. And I think if they don’t get a deal, they ought to start playing it again in some key markets because that obviously was getting the Republicans in Congress rattled.
We have an integrated economy with Canada. It’s not just autos. It’s energy, it’s agriculture, it’s steel and aluminum, it’s everything. And we actually have a surplus on trade with Canada on almost everything really except energy. And we need that energy. We’re the largest producer of crude oil on the planet now, but our refineries can’t use our new light crude, so we export it.
Our refineries are set up for Canadian heavy crude, so we’re dependent on Canada for energy. Canada could cause power outages in New England if they pulled Hydro-Quebec back. So they have cards to play, but they don’t want to do that. I mean, they’re 10 percent of our population. We simply have a lot more leverage than they do, and that makes it hard.
Anne Kim: What has been the impact of the tariffs on the Canadian economy? My understanding is that the Canadian economy is actually suffering fairly badly and that U.S. automakers are beginning to move production out of Canada back into the United States. What is the impact you’re seeing and is that going to affect the strategy long term for Canadians?
Amb. Blanchard: Well, I think it’s causing inflation in Canada and here, despite what the president says. There may be some movement from Canada to the U.S. There’s always shuffling back and forth. But when you have a totally integrated economy in terms of parts and suppliers, as well as assembly, a lot is still going to happen in Canada.
I don’t think you’re going to see any auto company wanting to build a new plant in the United States at the expense of Canada, because it takes several years, and the president, Mr. Trump, is not going to be there. It’s hard to believe any future president would be so foolish to deal with our number one customer that way. It’s just unrealistic. We’re too integrated.
And that’s not going to change. Geography is not going to change. Manufacturing is changing, but the major reason for the reduction in auto workers has been automation and to some degree bad management. It wasn’t nearly as much trade.
Garrett Epps: For all of the negative effects, Trump has really benefited some people. For example, Jimmy Kimmel, I think, is extremely grateful to the president. And another one might be Mark Carney, who was considered not to be a very strong candidate until Trump decided to involved himself in Canadian affairs. How do you rate his performance as prime minister in dealing with what is obviously a very serious crisis for that country?
Amb. Blanchard: It’s hard to find fault. “Steady as you go” is probably his motto, and I think that’s what Canada needs to do—not overreact to every little thing that comes up. It’s true he would not be prime minister but for Trump’s attacks on Canada. The Liberal Party last December was slated for a major defeat, and whoever was going to succeed Trudeau in the Liberal Party was going to lose by 20 points.
But then Mr. Trump started attacking Canada and making jokes, saying they’re a national security threat—which of course is baloney—and all these other stupid remarks. Then Mark Carney gets the nomination at the Liberal Convention and his numbers just skyrocket.
I don’t think there would have been a Liberal prime minister in Canada, but for Trump’s craziness. How’s he doing? He’s got a weak hand actually, just because we’re 10 times bigger, but I think he’s doing okay. I’m not sure I would have apologized, however privately, about the Reagan commercial because [Ontario Premier] Doug Ford has been his ally.
On the other hand, if they don’t get an agreement, they could start running that ad in New York and Florida and Texas and all over. It’s devastating, and they know it. I almost wish they would, but I think wiser minds say to let things cool off.
The problem is that we have people around Trump who feed him so much misinformation. It’s crackpot economics. Trump is still out there trying to tell people that other countries pay the tariffs when of course we pay the tariffs as consumers.
He’s also still trying to act like Canada is a national security threat, which nobody believes. Or that the European Union was formed to take advantage of the U.S., which of course is not true. So, we have a problem.
Garrett Epps: Well, imagine what the trade situation would be today if the Blue Jays had won the series.
Amb. Blanchard: Trump would have gone crazy. He would have called up the commissioner and asked him to remove the Blue Jays from the MLB. He would have gone nuts.
Garrett Epps: Exactly. He’d also ask for a recount. He’d say, you know, they counted the runs wrong.
Amb. Blanchard: It’s sad. It’s humorous. It’s tragic. I tell Canadians, you feel bad? What do you think we feel here in the United States? We have a guy who is not well. And even when he was well, he was acting crazy all the time. He doesn’t speak for us.
Anne Kim: How do you see the end game for the trade relationship, at least with the US and Canada? During his first term in office, Trump renegotiated NAFTA into what’s now USMCA, the US-Mexico-Canada Trade Agreement. That agreement expires in 2036 unless the three countries agree to extend it next year for an additional 16 year period. Given everything that’s happening, what’s your expectation about the fate of those negotiations next year and the USMCA in general?
Amb. Blanchard: Well, no one really knows. The responsible officials, including our trade rep, know better. But it’s the whims of the people who prod Mr. Trump that are the problem. I think they’ll settle down and get what is a similar agreement to what they currently have. I think they will cite some U.S. auto companies who say they’re expanding in the U.S. And they’ll announce several billions of dollars of investment that he will hold up as a major victory, even though they probably were going to make those investments anyway. And we’ll get back to what I hope will be the normal trading relationship, which is very positive and very productive.
The big thing would be for them to drop the tariffs on steel and aluminum currently because all that’s doing is adding costs to the auto companies and car prices. It’s totally unnecessary.
Garrett Epps: Are these tariffs helping anybody in the United States? Let’s leave Canada for one side because supposedly, we’re America first. The tariffs, from what you said, are not helping the auto industry. Is anybody benefiting?
Amb. Blanchard: No, they’re not helping consumers or the auto companies at all. And they’re probably going to end up hurting the auto workers because sales will drop and then layoffs will occur. I have heard from respected sources that steel workers, perhaps in Pennsylvania and elsewhere, will gain some thousands of jobs. But that will be offset by hundreds of thousands of layoffs and increased costs elsewhere. It’s bad.
But I think Trump has convinced himself these foreign countries actually pay the tariffs, not us.
Anne Kim: What will it take to rebuild the US-Canada relationship? Will the departure of Trump be enough to flip a switch so we’re back to the way things were? And what would your advice be to the next president, assuming it’s not JD Vance and that the restoration of US-Canada relationship is one of their goals?
Amb. Blanchard: The next president is going to have to get on a plane right away and fly to Ottawa, and say, “We’re back.” Now, Biden tried to do that with Europe right after he won, but people were worried that he would be the aberration, not Trump.
And unfortunately, Canadians and Europeans and all of our friends everywhere are saying they’re worried about the American voter. We can have the best president on the planet go up there in three years, and they’re going to say, “We believe you, we love you, we’re glad you’re back, but we’re still going to worry about your voters until we see some continuity here of policy.” They loved Biden, but it’s the voters they worry about.
