Workers on both sides of the border must recognize the skewed vision of their leaders. To counter this, there is a need to build an economy that prioritizes people and the planet over profit, says David Bush

This article was originally published in the Spring Mag.

Hours before sweeping tariffs on Canadian imports were to come into effect, Trump temporarily paused them after reaching a deal with Trudeau. Although the United States and Canada stepped back from the precipice of a full-fledged trade war, the threat remains. A trade war would mean a deep recession in Canada that would hit workers hard. For labour and the broader left, the trade war awakens many long-dormant political questions about nationalism, free trade, and class power. The terrain of struggle is shifting and the Left must put forward a clear political alternative or risk getting swept aside by the forces of reaction and profit. 

US-Canada integration: A ruling class strategy  

The Canadian and the US economies are amongst the most integrated in the world. The Canadian ruling class has pursued strategy integration since the 1930s. The proximity to the largest economy in the world made this an obvious choice for Canada’s capitalist class. Previously, tariffs on both sides of the border were used to foster the development of industry, and in Canada, they also stoked class and regional resentment as the main beneficiaries were rich “eastern” industrialists.

The post-war terrain accelerated this trend toward integration. Most notably the 1965 Auto Pact which removed tariffs, increased investments and jobs in Canada, and set out certain ratios for sales and parts to be manufactured to qualify. The FTA and NAFTA deals that followed in the 1980s and 1990s deepened this integration further. 

Integration went beyond removing barriers to capital flows. Not only were logistics, services, natural resources, and financial capital weaved together, but so too was the ruling class itself. US-controlled foreign assets in Canada are valued at over a trillion dollars. While as a percentage of the economy, they are less than their peak in the early 2000s, integration extends beyond direct control. Canadian companies are dependent on and disciplined by a financial system that is driven by the US. Exports to the US make up 77 percent of all Canadian exports. Most of those exports are parts used by American businesses in their own production — manufacturing accounts for roughly two-thirds of Canadian exports to the US. When it comes to imports, manufacturing accounts for an even more staggering 88 percent of goods coming North. This reflects a deep integration between economies – with roughly $3.6 billion worth of goods and services crossing the border daily. For bosses, this has been an incredible success story.  

For workers on both sides of the border, this integration has come at a price. Capitalists used the threat of capital mobility to attack unions and wrench concessions from workers. At the time the Left’s position on the free trade deals was that they would punish workers in the US and Canada while benefiting the bosses. This has been proven to be completely correct. It is now strikingly apparent that free trade deals have left workers incredibly vulnerable to the whims of corporations and to trade wars. The Canadian ruling class has ditched any notion of an industrial strategy that could have buffered against this possibility. 

Trump’s America first  

During the 2016 election, Trump was able to make political inroads by opposing NAFTA. With the political establishment in the US and Canada all supporting free trade, Trump was able to connect with real working-class anger about trade deals which had left many workers behind. While his promise of bringing American manufacturing back didn’t materialize in his first term, he did slap modest tariffs on solar panels, aluminium, steel and washing machines. He also forced a renegotiation of NAFTA.  

Trump understood the political benefit of tariffs. During the 2024 campaign, he came out hard for tariffs on China, Mexico and Canada. He promised to bring back manufacturing jobs to the US and make other countries pay. Trump outlined a vision of sweeping tax cuts for Americans being replaced by revenue generated by tariffs on imports. In essence, tariffs are running political cover for a massive transfer of wealth upwards.

If it sounded like this was too good to be true, it was. The tax-cut plan Trump is putting forward is a massive tax cut for the rich and corporations. The public revenue lost by these tax cuts is well over $4 trillion over ten years. A robust and universal 25 percent tariff on imports would generate only a fraction of that lost revenue.

This may explain why segments of US capital are softening on Trump’s tariff war. While the capitalist class in general (although there are exceptions) abhors impediments to the free flow of capital – there is an increasing openness to tariffs by the US corporate class. This reflects the crass calculation that they may be the beneficiaries of large corporate tax cuts (made politically possible by the tariffs). It also reflects a growing competitive dynamic amongst capitalist states, where the corporate class increasingly relies on state intervention to shield them from risk. The US state could use its more muscular power to favour US companies – especially in key sectors.

But the reality is that tariffs will hurt. For sectors and companies that are locked into integrated cross-border trade, winding down or shifting those operations will be painful. The broader capitalist class on the whole remains skeptical that it will benefit them.

For US workers it will be painful as well. Tariffs and retaliatory tariffs will drive up and lock in higher prices for needed goods, making life more expensive. It could also lead to sector-specific layoffs. On balance, workers will fall further behind, while the rich get richer.

The poison pill of patriotism

Trump is putting forward a number of justifications for tariffs on Canada. He has argued that Canada needs to strengthen its borders against the flow of drugs and migrants to the US. He has also suggested that the US needs to fix the balance of payments with Canada, that Canada needs to spend more on its military, and allow the US banking sector to operate in Canada carte blanche. These justifications are not grounded in reality and are simply a political pretext to leverage concessions from the Canadian state and showcase Trump’s “America First” bravado. The clearest evidence of this is the last-minute deals with the US and Mexico about militarizing the borders (which Canada was already doing). 

In Canada, the ruling class’s response to Trump’s tariff threats has been nothing short of existential. They have pursued for decades seamless economic integration for capital and this threatens that project. By some estimates, a 25 percent tariff (with a smaller carve out for energy) were it to be implemented for any length of time, could drive the Canadian economy into a deep recession. Hundreds of thousands of workers could lose their jobs and the prices of everyday items would increase (from direct tariff-related expenses or from profiteering). 

The Canadian ruling class is running a full-court press to try to convince Trump it is not economically beneficial to bring in tariffs. The Canadian political class is committed to policing the border more intensely for drugs and migrants. However ludicrous this sounds, it has the benefit of whipping up racist scapegoating against all migrants, stoking the tough-on-crime narrative that justifies ever more resources on policing, and criminalizing drug use.) All political parties have committed to bringing in some form of retaliatory tariffs. Although some premiers have been much softer, hoping to win sectoral carve-outs for energy. The Liberals threatened a two-stage tariff on US imports. Premiers in multiple provinces directed the removal of US liquor from the shelves of provincial liquor stores. Doug Ford even threatened to rip up Ontario’s contract with Elon Musk’s Starlink. Ford also promised to provide government support to businesses impacted by the tariffs. The federal government floated the idea of income support to individuals. 

There has been a mini-resurgence of nationalism in response to the tariff threat. Consumers are being asked to buy Canadian, and lists of Canadian-made goods are being widely circulated online. The US national anthem is being booed at sporting events. 

Before Trump’s inauguration, leading business groups and some labour unions, such as Unifor and United Steelworkers, launched the Canada-U.S. Trade Council to advise the government on how best to navigate this tariff threat. The OFL took a similar approach calling on Doug Ford to launch a “Labour-Business-Community Anti-Tariff Task Force”. Notable leaders from labour and civil society launched Pledge for Canada, as a progressive, non-partisan, nationalist response to Trump’s tariffs. 

The problem is that nationalism, even left-nationalism, disarms workers from fighting the boss. A “Team Canada” approach tells workers that we have shared interests with companies and politicians who have for decades waged a class war against the interests of workers. Canadian workers being asked to side with the Canadian Chamber of Commerce and Canadian billionaires like Loblaw’s Galen Weston or Shopify’s Tobi Lutke over US workers is absurd. The disorientation of the nationalist narrative was on full display last weekend when a large Unifor local endorsed Doug Ford for Premier citing his ability to protect workers from the tariff threat.  

A left-nationalist frame, which tries to centre workers, only will pave the road for the right. The right is using nationalism to advance its own agenda of increasing military support, expanding police powers, blaming migrants, and slashing social spending. Ford has been calling for fortress AM-CAN, which seeks to create a twin national project that is united against China and the interests of peripheral nations. A left-nationalism won’t cut against the right’s xenophobia or jingoism, it will only add to them. Likewise, Poilievere is also using this moment to advocate for the removal of “interprovincial trade barriers”, this is simply code for deregulating trucking – which would simply accelerate the race to the bottom for workers. Nationalism is being used as a cover to attack workplace standards.  

Nationalism is also a major retreat from the understanding of Canada as a settler-colonial project. Over the last several decades political consciousness around Canada’s colonialism and genocide and the need for Indigenous self-determination has deepened. Abandoning that perspective undercuts the Indigenous fights for control over resources and land, weakening the entire working class in relation to the capitalist class. 

While Left-nationalism may seem like a tempting strategy to connect with the immediate fear and frustration with the class over the tariff threat, it is an accommodation to the right. If the left insists on viewing the trade war through the prism of the nation-state rather than class struggle it will forestall workers’ ability to build any real alternative to the reactionary right. We can’t out O’Canada the ruling class. 

A working-class response  

For all their tough talk, the Canadian ruling class are desperate to return to the free trade status quo. The problem for them is that Trump’s tariff threats are shifting the political terrain around trade and integration. Despite the deal for a temporary pause, increased trade wars and global competition are only going to increase. The strategy of free trade has left workers on both sides of the border vulnerable. The all-party consensus about free trade that exists in Canada must be chipped away.

In the short term, the left has to fight for a workers-first agenda. This means centring the fight for immediate improvements to the social safety net – with EI and welfare programs strengthened and expanded. It also means finding ways to advocate for engaging in the trade wars that take aim at the rich, not workers. Unions and the left should be calling for measures that freeze or tax assets of the rich. Likewise, as Cory Doctorow points out, the Canadian state could take aim at the digital locks big tech companies deploy to protect their intellectual property and preserve their monopolies. Going after big tech’s unjust stranglehold on intellectual property could generate revenue, benefit consumers and directly impact Silicon Valley oligarchs. Polarizing on class lines, not national lines has to be the priority.    

In the medium term, the left must put forward an agenda of expanding the public sector and strengthening public services. This will not only stimulate the economy but also be a buffer against potential future tariff threats. Not only do we need investments in communities, we need to give workers a voice in making those decisions. Most importantly, it is time for the left to rediscover a real alternative economic vision for society. 

The tariff threat has laid bare how vulnerable workers on both sides of the border have been made by free trade. We can’t go back to the status quo, we need to fight for an economy that puts human needs and the planet before profit. And to do that, we need to build international working-class solidarity.