The spectre of U.S. retaliation seems everywhere in Canadian politics today. From whether to regulate American tech companies, to lifting tariffs on Chinese electric vehicles (EVs), to supporting the war in Iran, Canadian policymaking is routinely buffeted by fears that the Trump administration will hurt us if we appear offside with its agenda.
Indeed, when President Donald Trump imposes multiple tariffs and makes other ominous threats — “Canada lives because of the United States. Remember that, Mark” — it is difficult to see retaliation as anything other than an imminent possibility.
The imbalanced relationship between the two countries makes it difficult for the federal government to act. In managing this danger, Canadian policymakers should keep in mind three important guideposts: the danger of retaliation varies issue-by-issue; some policies are worth the risk; and the timing of Canadian action — whether the U.S. is strong, distracted or weak — matters.
What is retaliation?
What exactly is retaliation? How has it changed and how should we think about it in the age of Trump?
Retaliation is a form of coercive diplomacy in which a state responds to an action by another state or actor by imposing painful costs. This can serve as an incentive for the target to walk back undesirable policies, but it can also serve as a warning about who has leverage in a relationship.
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Retaliation can change policymakers’ behaviour, but so, too, can the threat of retaliation. When Ontario Premier Doug Ford proposed a 25-per-cent surcharge on electricity exports last spring, the Trump administration threatened to retaliate by doubling its tariffs on steel and aluminum. Ford quickly backed down.
Retaliation is typically seen as a “tit-for-tat” strategy where action in one area clearly leads to retaliation in another. But retaliation can also be more diffuse. As Brian Bow argues, it can lead to “grudge linkages” where a state doesn’t impose costs immediately, but rather through “malign passivity” where it becomes indifferent to the concerns and interests of a target.
Times have changed
Historically, clear cases of retaliation in Canada-U.S. relations were rare for three reasons. First, America’s traditional separation of powers led to the fragmentation of authority, and this long ensured that each branch of government could check any attempt at retaliatory action. Second, the growing interdependence of trade between the two countries created transnational coalitions that had an interest in blocking retaliatory action. Third, both countries historically shared a diplomatic culture that discouraged any retaliatory linkage between issues.
The problem is that none of these conditions appears to hold today.
The Trump administration is unmistakably an “imperial presidency” that has presided over the almost complete dismantling of checks and balances on executive power.
There are still transnational coalitions that favour trade — think of the auto giants currently paying billions in tariffs. But few companies are willing to stick their necks out against the Trump administration for fear of having them cut off.
Finally, it’s difficult to argue that Canada and the U.S. still share a common diplomatic culture. This resided with career officials and professional bureaucrats, and many of them on the American side have been purged and replaced by Trump loyalists.
The uneven costs of retaliation
There is a common temptation to view the Trump administration as an all-powerful colossus capable of retaliating at will. This is a mistake. Every act of retaliation imposes costs on it, whether political, economic or diplomatic. Consider Trump’s favourite weapon of retaliation: tariffs. Every time Trump imposes a new tariff, it contributes to U.S. inflation and the cost-of-living crisis, creates business uncertainty and pushes other countries to diversify their trade.
A better alternative is to view the Trump administration’s capacity for retaliation as unevenly distributed. This means that the prospects for retaliation are higher on some issues and lower on others.
Consider the scenario of an expanded trade pact between Canada and China. Opposition to China commands widespread support among the American public and elite, and containing China is a longstanding American national interest. It is thus no wonder that Trump threatened a 100-per-cent tariff if Canada “makes a deal with China.” He believes public opinion supports it.
In other cases, the Trump administration’s capacity for retaliation is remarkably weak. Take the global backlash against Grok for allowing users to create non-consensual sexual images of women and children on the social media platform X. In several countries, this catalyzed a rapid response as governments opened investigations, threatened legal action and even floated the possibility of banning X altogether.
U.S. officials have repeatedly threatened to retaliate against any country that attempts to regulate American tech companies, which likely explains why Canada’s initial response was so muted. Yet the problem here is that any American defence of Grok risks becoming a de facto defence of non-consensual sexual images and child pornography. Even worse, it would come at a time when Trump is fending off fresh allegations of sexual abuse in the Epstein files.
The costs of letting retaliation drive Canadian policy
At the same time Canadians need to be clear-eyed about the costs of simply letting threats of retaliation drive Canadian policy. There are times when kneejerk reactions to avoid these threats — real or imagined — can hurt more than they help.
Take the initial Canadian response to Trump’s war with Iran. The Carney government quickly issued a statement of support. The likely target was an audience of one — Trump. The calculation here was simple: better to support the war than risk the wrath of a vindictive president.
That calculation quickly proved to be mistaken. The conflict rapidly spiralled out of control, engulfing the broader Middle East, trapping tens of thousands of Canadians in a warzone. Global oil prices spiked and there are concerns over how shortages of fertilizer will affect the global food supply.
American policymakers seem caught off guard by Iran’s closure of the Strait of Hormuz while the president has no clear and consistent strategic objective. Meanwhile, some former Canadian diplomatic luminaries have taken the Carney government to task for its seeming abandonment of international law, while some members of the Liberal caucus broke ranks with the government over the issue.
It is therefore not surprising that the Carney government quickly walked back and qualified its position — multiple times. The lesson here is that there is a danger when policymakers let concerns over possible American retaliation reflexively drive Canadian policy.
The Trump administration’s capacity for retaliation is weakening
If there was a time to most fear retaliation, it was immediately after Trump’s inauguration in January 2025. Buoyed by a fresh election victory, his second administration was flush with political capital, strong public support and majorities in the House and Senate.
Fast forward more than a year and the political landscape looks markedly different. Trump is a deeply unpopular president whose approval rating is underwater — 36 per cent approve, 57 per cent disapprove.
It is dogged by scandals — the latest resulting in the firing of former Homeland Security secretary Kristi Noem and former attorney-general Pam Bondi. ICE’s behaviour as a paramilitary force arresting and killing American citizens has deeply alienated the public. Now, Trump has started a bitterly unpopular war despite running as the “peace president.”
Any act of retaliation against Canada requires political capital, and Trump’s stock is rapidly diminishing. A key inflection point will be the midterm elections, where the Democrats increasingly look like they will retake the House and possibly the Senate. A newly elected Democratic Congress could sharply curtail the administration’s ability to impose tariffs or take other retaliatory actions.
The Trump administration will certainly have other ways to hurt Canada. But its attention will be increasingly focused on fending off roiling scandals, international crises and a bruising midterm cycle.
There are steps that Ottawa can take in this situation.
Three guideposts for managing retaliation
First, the danger of retaliation is not a constant. When an issue touches on America’s core national interests, commands widespread public and elite support, and the administration has signalled its importance, Canadian policymakers need to exercise extreme caution. But when an issue forces the Trump administration into a costly and unpopular position, the danger of retaliation is far less.
Second, some policies are worth the risk. The Carney government’s deal to allow Chinese EVs into Canada was high risk because it expanded trade with China and challenged the North American auto industry — two areas of concern for Trump. But this policy was arguably worthwhile because it demonstrated to the U.S. administration that there are costs to its tariff policy and that Canada has the ability to diversify trade.
Finally, policymakers need to act when the Trump administration is weak and distracted. If Canada is pursuing a policy with a high risk of retaliation, it needs to be announced at a time when the president is fighting off a fresh scandal or scrambling to manage a major crisis.
