The election of Donald Trump has certainly changed the political dynamics in the United States. Trump’s election victory was likely predicated on numerous things, but his vague and ambiguous promises to reduce the cost of living, address rising food prices and his more heavy-handed assurance to use the police and military to crack down on so-called “illegal” immigration were significant factors.
Notwithstanding these promises, however, Trump’s first two months in office has become an administration bent on revenge, chaos, defiance of the law and the constitution, descending into open authoritarianism.
Alarming as Trump’s open authoritarianism is for the preservation of liberal democracies, Trump is also reinventing the post-Cold War capitalist world order and in so doing, altering the conditions of 20th century American imperialism. This transformation is occurring quickly and is ongoing, but there are clear tendencies within Trump’s approach to American-led neoliberalism that is moving away from what Leo Panitch and Sam Gindin have argued is how “the American state developed the capacity to incorporate capitalist rivals and oversee and police “globalization” which was the spread of capitalist social relations around the world.”
In their seminal work The Making of Global Capitalism, Panitch and Gindin demonstrate that the American state drove neoliberal capital accumulation through demands for open markets that other capitalist states often embraced voluntarily. American financial institutions, including the powerful Federal Reserve, backstopped this program—and, if push came to shove, so did the American military. Yet, Trump’s far right embrace of economic protectionism is breaking the institutional guard rails that governed neoliberal capitalism—and is now replacing them, unevenly, with a 19th century protectionist “beggar-thy-neighbour” economic model, reinforced by gun boat diplomacy.
Adam Smith, one of the ideological fathers of liberalism and capitalism, famously critiqued such protectionist approaches in the Wealth of Nations, arguing that “nations have been taught that their interest consisted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity.”
Yet, Trump’s embrace of beggar-thy-neighbourism is, by its nature, designed around his perception of economic winners and losers. He interprets trade deficits as an attack on the United States’ economy. Interpreting the world as a zero-sum game is Trump’s ultimate economic and military world view, and partially explains Trump’s repositioning of America’s relationship with Russia and his cozying up to Vladimar Putin and Russian oligarchs, as well as his warm relationship with Victor Orban in Hungry, Recep Tayyip Erdoğan in Türkiye, and Kim Jong-Un in North Korea.
Beggar-thy-neighbourism also explains why Trump sees former allies like Canada, Mexico, Europe, Ukraine as enemies or, at the very least, competitors to be weakened, exploited, or crushed, depending on the perceived economic threat. When Trump was elected in 2016 and throughout his first term, this world view was certainly clear, but it seemed to be tempered by real world guard rails. Those guard rails included international and national institutions designed to protect the rules of capital accumulation and trade, property protection, certain liberal democratic norms, and the development of more common markets.
In the first Trump presidency there were also individual agents inside the American government and the Republican Party who understood and championed those norms—with all their tensions and contradictions—and, to some degree or another, were willing to challenge Trump’s authoritarian tendencies. Sometimes they did so successfully and other times, Trump’s true authoritarianism was clear—such as on January 6, 2021, when the president’s thugs and henchmen attempted to launch a coup to overturn the results of the country’s presidential election and install Trump as an unelected president.
Trump’s rewriting of post-war American capitalism has thrown into question the western economic and military alliance—allies have become enemies and former authoritarian enemies (or at least competitors) have become allies. It is hard to quantify how drastic a change this is. We are witnessing a rapid end to the 1990s Washington consensus, where agreements like NAFTA and the free trade regime created by the World Trade Organization (WTO) are now almost entirely irrelevant. In its place is a world in which large economic and military powers compete for influence and market shares, where smaller countries become pawns in a much larger geopolitical game of cat and mouse. In its wake, national economies that were tied into the U.S. market are disrupted and military alliances like NATO and Norad—however much dominated and controlled by the U.S. military to police U.S. interests—are now clearly irrelevant.
Since 2020—and not merely because of Trump—the democratic norms in countries like Hungary and Türkiye have been actively weakened or destroyed and neoliberal free trade zones have been retrenched or limited because of nationalist push back, famously in the Brexit elections between 2016 and 2019. But now, Trump 2.0 is upending these norms even more and Canada is very much in the crosshairs.
Normalizing the non-normal
Since November, Trump’s attacks on Canada have become normalized in a way that few could have imagined. In some ways, it is not necessarily unique that an American President would have open disdain of Canadian leadership—Richard Nixon had clear contempt for Pierre Trudeau and Lyndon Johnson made his scorn for Lestor Pearson’s criticisms of the Vietnam war well known. But generally, these forms of personal disagreement had little implication for the long-term integration of Canada’s market within the American capitalist orbit.
But Trump has thrown out this playbook. There is no question that Trump had a deep personal dislike for former Liberal leader Justin Trudeau—and that may have fuelled at least some of the grandstanding—but there is clearly more happening. While the coronation of central banker Mark Carney as Liberal leader and Prime Minister has muted the Trump criticisms somewhat, he continues his tariff threats.
What appears to be happening now is that Trump and his financial officials view Canada as an easy political and economic win. If the president can use his enormous power to squeeze a little more dairy access here, weaken the Canadian lumber market, or garner a new water deal in the Pacific Northwest, then he can leverage a political win and squeeze a little more for American capitalists.
Canada is uniquely vulnerable here. Since Canada entered the 1988 CUFTA free trade agreement with the United States, its entire economic engine has been centred around preferential access to the U.S. market. According to Statistics Canada, total Canadian exports in 2024 totaled $721 billion in total goods and services, with $547.5 billion (75.8 per cent) going to the United States. In the same year, Canada imported just over 50 per cent of all goods and services from the United States.
This complete reliance on access to the U.S. market is one of the reasons that Leo Panitch described Canada as being a ‘rich dependency.’ In a 1981 article, Panitch wrote that Canada was the “prototype of the form of dependent industrialization” because its core industrial base was reliant on American capital and American technology to create its manufacturing base and to extract its natural resources.
While ownership of some of these large firms has changed over time, in a world of American led free trade, Canada’s dependence accelerated. In highlighting these changes, Panitch maintained that Canada represents an archetype of a society dominated by the American hegemon, whose “relation is secured and maintained more fundamentally within civil society itself.” In other words, Canada (at least English Canada) is fully dominated by American culture, mass media, education, publishing, and that dominance reinforces the power that the United States maintains within Canadian society.
Yet, recognizing all of this, in a world of beggar-thy neighbour strategies from the American state and Trump’s now frequent comments on Canada being the 51st state, this new American imperialism has upped that gamesmanship, threatening the very legal sovereignty of Canada. How much Trump and his cabal want to see Canada as a 51st is really beside the point. It is clearly meant as a threat to squeeze the country economically and if that means destroying the legal sovereignty of the country (or empowering would-be sovereigntists in oil rich provinces who think they can get a better economic deal in the United States) then more the better.
The Trump bump
Canadian dependency has always been centred on deep integration with the United States on an economic and military level. Yet, since Trump’s early and now continuing comments challenging Canadian sovereignty, there has been an unprecedented shift in Canadian politics in an extremely short period of time. It is worth remembering that in January, Liberal leader and Prime Minister, Justin Trudeau was polling at record low levels, and the Conservatives, led by Pierre Poilievre, enjoyed a double-digit polling lead and seemed destined to win a sizeable majority in a Fall election. Feeling pressure from his own party, Prime Minister Trudeau announced his resignation mere weeks into the Trump presidential term.
Initially, even in resignation, Trudeau was widely criticized for leaving the country without senior leadership, making it extremely vulnerable to Trump’s threats to Canada’s economy and to its sovereignty. Yet, within that context, the Prime Minister was able to reframe his final months in office as ‘Captain Canada,’ challenging Trump’s annexation tendencies and doing so in a way that re-ignited a form of Canadian nationalism that had largely been legitimately challenged and muted by its colonial past. Trudeau’s nationalist push reinforced a defensive form of Anglo-Canadian nationalism that championed what Canada is not (the United States) rather than what it is.
Trudeau’s resignation sparked a short leadership race, in which the party turned to former Bank of Canada and Bank of England Governor Mark Carney. Having never run for office, Carney seemed to be an odd choice for a party that has dominated Canadian federal politics for most of the twentieth century. Carney has no elected political experience. He speaks barely passable French, which had long been required to be electable in Quebec. He has no experience dealing with Indigenous nations and their important issues. He has never faced an electorate.
Judging by the few choices he has made since becoming leader, he seems quite conservative and willing to break from Trudeau’s environmental and social equity agenda. And yet, in his first two months and now in the middle of the electoral campaign, he is squeezing the social democratic NDP and looks to be leading a polling turnaround of almost 30 per cent in less than three months.
The Trump effect is changing the Canadian political dynamic in numerous other ways. The NDP is on an electoral cliff and could be significantly weakened after the election. All the parties now seem to agree on the need to drastically increase military spending in a way that has not been true since the Cold War. At the time of writing, no politician seems to see the downside in increased military spending and there is even unprecedented, poorly thought-through discussion of a Canadian nuclear program.
The Conservatives, led by Pierre Poilievre have yet to demonstrate that they are capable of addressing the Trump threats to Canada’s sovereignty. While it once looked like they would cruise to election victory, his campaign is now floundering, and his well-crafted campaign on “Canada is broken,” “axe the tax,” “build the homes,” “boots, not suits,” and all the other clever one-liners look like yesterday’s news.
The Conservatives have had to pivot and address the fact, according to one poll, upwards of 97 per cent of Liberal, 99 per cent of NDP, and over 95 per cent of Bloc supporters would oppose joining the United States,yet that number falls to 80 per cent when CPC voters were asked the same question. In other words, A significant part of the Conservatives base is openly sympathetic to MAGA style politics.
Now the Conservatives are claiming to put “Canada first,” and while that might appeal to some CPC nationalists, it borrows so much from far-right movements around the world that it continues to plague them on the campaign trail, notwithstanding their ability to draw large crowds of supporters.
In provincial politics, Conservative leaders in Ontario, New Democrats in BC and Manitoba seem to be aligned in their opposition to Trump. Meanwhile, Conservative Premiers in Saskatchewan and in Alberta cannot seem to move past their anger over Liberal Ottawa and have been open about sparking a national unity crisis, notwithstanding the larger threats from the Trump administration.
In some ways, the Canadian right is struggling because, in the wave of this form of Canadian nationalism, it doesn’t know how to respond. And this weakness is grounded in the fact that the economic model it champions—low taxes, unfettered access to American markets, and exploitation of natural resource commodities, are being repositioned and challenged.
And while the centre and right are using this crisis to push through projects that were unimaginable three months ago—national pipeline projects—how these projects get completed is an open-ended question. Green policies seem to be the real victim in all of this. The central Liberal policy to address climate change—the carbon tax—is virtually dead in the water. But a renewed Canadian independent economic model is once again being debated in a manner that has not been true since the 1960s. That could lead to important shifts in how capitalism works inside of the country—perhaps outside of it as well.
How workers, Indigenous communities, and other social movements respond will be important, but those conversations are not really making national news, notwithstanding an ongoing election campaign where these issues should be at the centre.
More than nationalism
There is no way to predict the future, but we can draw some important conclusions. We know that the next months and even years are going to be a new-normal. We also know that Canadian politics has been upended in a way that we have not seen in two generations. We can also highlight the fact that whoever forms government on April 28, the Trump factor will be at the centre of everything they do. And it is safe to say that while Canada itself will survive, what that survival looks like in the short and long term is an open-ended question.
What we do not know is how these factors will change the country in the short and long term. We do not know what this economic disruption will look like—is it a deepening of an austerity driven capitalism or a new moment of social welfare, green policies, good jobs, new public infrastructure that make the country more inclusive? And we do not know what the chaos will bring. It is safe to say, however, that unfettered nationalism alone seems unlikely to build new forms of progressive politics that will empower workers, reignite ambitious and much needed climate policies, protect human rights, invest in green jobs, new non-market housing and build livable cities. The alternative is a politics where ruling classes push neoliberal Canadian capitalism—presenting low taxes, austerity, and greater inequality as the natural response to the current crisis.
At some point, Canadian nationalism will have to be defined on what Canadians choose to do—on reconciliation with Indigenous nations, on the environment, on creating a sovereign economic space that truly works for everyone—not just what it claims to be. That is the real question going forward.
