Canadians March off to fight a Trade War while Europe Watches

Authors: Raymond James Floreani and Julian Spencer Churchill PhD

Friday, August 21st, 2026, is a day that will certainly be etched into the minds of average everyday Canadians. It is when Donald Trump directed the United States government at midnight to launch the first salvo of a full-blown trade war offensive against the people of Canada, despite Canadians’ willingness to compromise.  Canadians have had trade disputes with the Americans ever since the Americans declared independence from the British Empire.  These are nothing new to us historically, but since 1939 and the beginning of the Second World War, Canada and the United States have been drawing closer together, friends and neighbors who set an example of peaceful cooperation and create joint prosperity through liberalized trade and movement.  On August 21st that period officially ended at the hands of a capricious and nationalistic president of the United States.  What now has descended across the 49th parallel are two neighbors who are racing to each put up a 6-foot fence to keep the other out of their yard.

Canada now faces many stark choices as Canadians come to grips with the inescapable fact we are really at war.  The American Army may not have crossed the border, but we are being attacked, and there will be casualties, including destroyed lives, property, and wealth.  These tariffs are meant to weaken the Canadian nation, not to protect American jobs from unfair competition, which is what tariffs are typically deployed to do. That makes these an offensive weapon, used specifically to attack another country’s economy, Canada’s.  We have been suffering under the Section 232 tariffs for some time, but we are not the only ones being hammered by them; they are affecting most countries to some extent and have at least a modicum of legal legitimacy, however dubious.  All Canadians must now accept the fact that these Depression Era Section 338 tariffs were always nothing but a blatant direct attack on Canada to weaken us as a nation, and Canadians should respond accordingly.  If Trump had wanted to reindustrialize the U.S., he would have found a collaborative partner in Canada ready to jointly employ tariffs to reduce shocks to our mutual economic interests, but his goal is instead to assert power and dominance. 

Does that mean we should retaliate with a tariff wall of our own against this tariff bombardment?   Despite the satisfying feeling of retaliation that the prime minister has announced, the best course is to avoid countertariffs.  Canadians are going to be losing their jobs, and the economy is going to be going through a very difficult time.  Why make our own people pay more for the goods they need and want, just in order to feel good about hitting back? If Canadians want to shun America for this, personal and provincial boycotts are a better tool for that.   Besides, Trump would love if we retaliated with countertariffs; it allows him to portray Canadians as the bad guys to Americans and raise them further to outright trade embargo levels.   There are better and more efficient ways to arm ourselves and fight this trade war. The first one we believe is to literally arm ourselves.  The Canadian government has been on a shopping spree of defense purchases as of late, but with typical Canadian fumbling, it will take years to be in the hands of the armed forces.   It is turning out to be so far, much like the major projects portfolio of projects, a wonderful long-term list of diversification projects.   But as of now, the interactions shown between Kahn and Kirk in an iconic scene from Star Trek II, The Wrath of Kahn, when “time is a luxury you don’t have” and survival is at stake, show how Canadians might also respond contrary to the conventional responses.

Albert Hirschman, historian of Weimar German economic policy in the 1930s, showed that Berlin’s power came from keeping open its markets through the 1920s and the early Great Depression of the 1930s to the rest of the exporters of Europe. Those countries that closed their markets in a desperate attempt to protect jobs ultimately became dependent and vulnerable on the market of those states to which they exported. This model was later used to explain the export dependency of the closed Latin American economies on the US and of African exporters on Europe. Canada must not make the mistake of entirely disengaging from any marketplace, including from the US.    Realism dictates they need our resources, but they should hold no preferential treatment going forward.  

Is this not the same country that created the town of Ajax in a couple of years to feed the demand for artillery shells in the Second World War?  We have the capacity and the people to do that again, this time to make Canada strong now in the face of a trade war. My co-author, Professor Julian Spencer Churchill, and I have been advocating for some time for the Canadian government to spend some of the fiscal debt spending room Canada has available in a massive 665 billion dollar military infrastructure and procurement stimulus project to create a strong and robust Canadian Armed Forces of 110,000 active troops and 65,000 primary reservists with a provincial militia or home guard of 40,000 people under arms by 2031. We have also advocated that instead of the usual process of sending out proposals, soliciting suppliers, and negotiating costs, which today, even when expedited, takes years, instead we propose the government just pick the specific hardware required now and order it. 

We have proposed that the most efficient and economic hardware be ordered directly and bought to meet four core mission requirements. 1) Defense of all Canadian air, land, sea, and space; 2) Defense of NATO partner nations’ land, sea, and air; 3) Peacekeeping for the United Nations around the world; and 4) Defense of Canadian trade and diplomatic interests around the world.    Then set simple rules and buy the current hardware to accomplish it now.  The rules are: 1) it meets the need; 2) it is not American (unless there is absolutely no substitute); 3) it must come from a democracy, friendly allied nation, or domestic source; 4) it must be assembled here; and 5) it must use only Canadian metals and construction materials.  We don’t need the absolute best; we need the best value available now.  Our entire detailed plan outline for this force is here.

There are those in the military who say we need the very best for the next thirty years, so we must buy something that will still be capable in that time.  If we had used that logic in the Second World War, the Allies would have lost, waiting for equipment to get to the troops to fight.  The saying is you go to war with the army you have, not the one you wish you had.  So let’s build it now, not order it now and wait until the mid-2030s for the first new submarine or ships to join the fleet or 2030 for the first new operational fighter squadron to fly.  Mobilize Canadians and industry to build the factories here quickly, employing all those losing their jobs and many tens of thousands more to construct the factories and defense infrastructure and then churn out the equipment being bought.  By front-loading the purchasing, not spreading it out over decades, we create immediate demand, jobs, and scale.  We also create the scale with our trading friends and defense partners around the world to expand their armed forces purchases and thus become a source for them to buy as well from our new and existing production facilities.   We need to protect Canadian jobs and lives now; the world is a very dangerous place now, never mind what it looks like 10 years from now.  Besides, if we build it now, we at least will have the equipment to actually upgrade and keep relevant 10 and 20 years from now, not still be waiting for it to be built.

Canadians can win this trade war with the Americans if we chart our own path on the trade battlefield.  Instead of playing Donald Trump’s game of tariffs and countertariffs, raising prices for Canadians and putting more people out of work, let’s ignore him and instead work to make Canada the powerhouse of manufacturing, where we create demand for our own resources and build our nation up both industrially and militarily.  America has shown us countless times now it is no longer a friend of allies, democracies, or free markets; it is truly a superpower in terminal decline. The current Iran war fiasco has shown just how far and fast they have fallen.  Europe is a powder keg, with the Ukraine war on its doorstep; Asia is also a powder keg with the Taiwan and Korean situations, and of course there is Iran and the Gulf situation.    Everywhere Canadians look, including our own planet literally on fire, we face danger.  Instead of squabbling amongst our own family over our regional grievances, Canadians need to embrace each other, for we are truly blessed with the greatest nation on earth, and a former friend, ally, and neighbor is deliberately attacking us.  Let’s come together to build and make Canada into that most docile yet dangerous animal that symbolizes us, the humble, busy porcupine.  That is the Canada that together built things and fought and won the Second World War, and we can do it again in this war.

We can not only survive but thrive in this trade war when we concentrate on the now and utilize our own Canadian resources and those of our friends to build the things here required to turn Canada into the powerful middle power and free world leader that Prime Minister Carney spoke of so eloquently in Davos.   Canada can assume the leadership of the Atlantic Alliance; we have the strength of people and have now shown the will.    America is really, despite the veneer of power, not a healthy nation.   Their fiscal spending habits and debt burden mean they now pay more in interest yearly than the entire Canadian net federal debt.   Their politics are hopelessly divisive; they can no longer be called an ally; they have become an unreliable aggressive competitor; and they face a retirement and healthcare fiscal cliff in a few years. Is this really the trade and security partner we all wish to continue to be wedded to?   

Donald Trump is really just the outward, very visible face of the problems with America.   Canada has been complacent for too long; we indeed owe him some recognition for finally waking us all up to our vulnerability. Instead of playing America’s game and allowing them to dictate the terms of this war, we can win by making their trade war effects moot by creating our own larger internal markets and demand.   Employ a great Canadian military-industrial stimulus to supercharge trade flows to real friends and partners, employ Canadians, and mutually support and grow all our collective ties and economies.  Instead of trying to go “elbows up” in the boards with the Americans, steal the puck and put it in the net.

Yes, there are many Canadians who will be hurt in the industries that are affected by these attacks upon us, and we as Canadians need to support them. The best way is to look to history when faced by an aggressive, hostile power. Just as in World War Two, when Canada created hundreds of thousands of good-paying jobs and a robust large industrial economy, quickly growing its way out of the tail of the Great Depression.   Becoming a vital and outsized part of the winning industrial war effort for our troops in Europe.  History calls again to repeat that feat; the adversaries have changed and the fields of battle have as well, for now.  But we have the opportunity to properly build and prepare our nation and defenses before history repeats. An outcome that we all fervently hope never comes but seems ever more likely in this dangerous world.