100 Days of Trump Down, Over 1300 To Go: What we Heard at The Economic Club of Canada
May 6, 2025
While the May 1st event was billed as a look back at the first 100 days of the Trump presidency, what was top of mind among panelists at the Economic Club of Canada’s 100 Days of Disruption: Canada vs. Trump were the next 100 days, and beyond.
Moderated by Nik Nanos, Chief Data Scientist and Founder of Nanos Research, panelists Jeremy Kronick of the C.D. Howe Institute, Benjamin Tal of CIBC Capital Markets and Flavio Volpe of the Automotive Parts Manufacturers’ Association had an open, frank and entertaining discussion on what is in store for the Canada-U.S. trade relationship.
From the rationale behind Trump’s tariffs and the North American manufacturing supply chain, to upheaval in the bond markets and the potential of a political backlash, the discussion covered a wide range of issues, with areas of broad agreement and healthy debate.
Here are the key takeaways:
Strike back or stand by?
That’s the million-dollar question for how Canada should respond to the trade war.
As aggressive as the U.S. administration has been in enacting its protectionist agenda, there are emergency brakes built into the system. The rattling of the bond markets (i.e. the drying up of lending to the U.S.) and the risk of a recession in the run up to the 2026 U.S. midterm elections could push President Trump towards compromise, or force Congress to take back its traditional powers over trade policy.
Given these mounting pressures, there is an argument that Canada should simply wait it out. We would inevitably lose a trade war with the U.S. due to the relative small size of our economy. In this view, it would be better to simply wait for the math and the markets to catch up to the Trump administration and then work out a new deal.
The counterargument is that the pain inflicted on the Canadian economy is simply too great to wait for the situation to play out. Even if reality catches up to the U.S. in the long term, tariffs on automotive manufacturing will have a direct impact on the Canadian sector in the short term, so waiting may not be an option for thousands of Canadian auto workers whose jobs and livelihoods are at stake.
If Canada does choose to retaliate, it needs to be strategic and targeted in its approach, focusing on the levers with maximum impact on the U.S. but minimal impact on Canada.
The need to build a stronger, more resilient Canadian economy
In Meeting the Moment, Mobilizing CPAs to Address Canada’s Economic Challenge, CPA Ontario lays out the case for how Canada’s stagnant living standards, lagging productivity, and declining business investment have become a crisis. A trade war only exacerbates these underlying issues.
There was agreement on stage that a political and policy consensus has begun to form around the need for Canada to address these challenges. The removal of interprovincial trade barriers, tax reform, investing in innovation and resource development, including the construction of a National Energy Corridor, were singled out as proactive measures that will help make the country more resilient.
Canada’s critical mineral wealth is also a rich vein of opportunity that the country needs to mine, and quickly. With nations around the world, including Canada, planning to invest more in their national defence to meet security commitments, these resources will play an important role in the nation’s future. After all, critical minerals are vital components in the production of various defence systems and equipment. That’s partly why all panelists agreed on the importance of increasing Canadian military spending as lever to boost our economy and kick-start industrial activity.
The art of the deal
The panelists all agreed Canada needs to get its own house in order, and that a win-win deal with the Trump administration is possible. The disagreement is over the best way of getting the deal done, and whether direct confrontation is the best approach. To quote the second most famous book on the art of strategy: He will win who knows when to fight and when not to fight(1).
Visit CPA Ontario’s Trade & Growth Insights for more perspectives on the Canada/U.S. trade war and the role of CPAs in building a stronger, more competitive Canada.
(1) Sun Tzu, The Art of War, 17