Eric Ham is based in Washington, D.C. and is a political analyst for CTV News. He’s a bestselling author and former congressional staffer in the U.S. Congress and writes for CTVNews.ca.
U.S. President Donald Trump recently announced major American oil companies will invest US$100 billion to rebuild Venezuela’s energy sector in the wake of Washington’s military takeover of Caracas.
Now, with the largest oil reserves ensconced in American possession and the administration eyeing yet another military takeover of resource-rich Greenland, this makes it even more likely, not less, that the American strongman walks away from forthcoming Canada-U.S.-Mexico-Agreement (CUSMA) negotiations.
Formerly the North American Free Trade Agreement (NAFTA), the pillar of regional economic integration for more than three decades could now be sunset by the spring of 2026. The president continues to steamroll western democracies, all the while weakening global safeguards that have undergirded international norms in his wake.
The White House continues to strip nation states of their vast wealth like locusts. North American ingenuity and openness has been the envy of the globe allowing Canada, Mexico, and the United States to reach meteoric heights, powering technological innovations along with an unmatched manufacturing base.
Now, with Trump’s metamorphosis to autocrat complete, all of that will soon fall to ruin beginning with the region’s signature trade compact. Even before America’s military lambasting of western powers, the twice-impeached president was already telegraphing a U.S. exit from the prized agreement.
During a recent interview with the New York Times, Trump was asked what could potentially limit his global powers. The former reality television personality frighteningly retorted: “Yeah, there is one thing. My own morality. My own mind. It’s the only thing that can stop me.” He went on to add, “”I don’t need international law…”
These remarks are another unmistakable guidepost that global treaties, norms, and safeguards are of no consequence to the commander-in-chief. Only guided by narcissistic aims and desires, the world is now consumed with dread, waiting in horrid anticipation of what nation or leader will be marked for annihilation next.
CUSMA on life support
Canada, America’s largest trading partner, was put on notice back in January when Trump was sworn in to a second term. The president made no secret that the Great White North should no longer enjoy national sovereignty but fall under American hegemony. Not wishing to unleash military hard power to enact subservience, the White House signalled economic force to bring a century’s old friend and ally to its knees.
Debilitating tariffs laid the groundwork and now with CUSMA seemingly on life-support, the Trump administration is hoping such a seismic blow to Ottawa will force the nation to capitulate to its desires.
According to a report from the Washington-based think tank, the Council on Foreign Relations (CFR), economists largely agree that NAFTA benefited North America’s economies. Regional trade increased sharply over the treaty’s first two decades, from roughly US$290 billion in 1993 to more than US $1.1 trillion in 2016. Cross-border investment also surged, with U.S. foreign direct investment (FDI) stock in Mexico increasing in that period from US $15 billion to more than US $100 billion.
Moreover, the report states: “In the years since NAFTA, trade between the United States and its North American neighbors more than tripled, growing more rapidly than U.S. trade with the rest of the world. Canada and Mexico are the two largest destinations for U.S. exports, accounting for more than one-third of the total.”
Canada specifically saw strong gains in cross-border investment in the NAFTA era: Since 1993, U.S. and Mexican investments in Canada have tripled. U.S. investment, which accounts for more than half of Canada’s FDI stock, grew from US $70 billion in 1993 to more than US $368 billion in 2013.
Additionally, agriculture, in particular, saw a boost. Canada is the leading importer of U.S. agricultural products, and Canadian agricultural trade with the United States has more than tripled since 1994, as did Canada’s total agriculture exports to NAFTA partners. Yet, as the CFR document report points out, perhaps to its detriment, Canada became more dependent on trade with the United States, relying on its southern neighbour for 75 per cent of its exports.
Canada’s dangerous trade dependence
Other high-income countries tend to be much more diversified, rarely relying on a single partner for more than 20 per cent. Of course, Canada has always shared a special relationship vis-a-vis the U.S. In fact, American presidents have long shared warm relationships with Canadian prime ministers, but Trump has not hesitated to use this dependence as leverage, perennially threatening economic hardships on Ottawa if they do not comply with concessions.
Now, the once-great partnership and the signature trading pact that has powered the economy, on both sides of the border, is not only in jeopardy, but so too is Canada’s very independence. Trump is clumsily and haphazardly restructuring the global world order.
Yesterday it was Venezuela; tomorrow Greenland; after that, Canada. The first shot across the bow will most certainly be the end of CUSMA. Trump will take on the arduous task of trying to consume a nation that is both ill-fitted and ill-suited for his MAGA ideology. One can only hope (or not) that he does not choke on it in the process.
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