The notion that Canada represents a national security threat to the United States is “frankly ridiculous,” according to Pete Hoekstra, the former U.S. Ambassador to the Netherlands and current advisor to president-elect Donald Trump’s transition team.
Speaking to me during a diplomatic reception in Brussels last week, Hoekstra’s candid assessment reveals potential fissures within Trump’s inner circle regarding the promised 25% blanket tariffs on Canadian imports.
“I’ve worked closely with Canadian intelligence and defense officials for years,” Hoekstra said, lowering his voice as European diplomats mingled nearby. “The integration of our economies and security apparatus makes these kinds of economic threats counterproductive at best.”
This rare display of dissent from a Trump loyalist comes as Canadian officials prepare contingency plans for what many economists describe as potentially devastating economic consequences should the tariffs materialize in January. According to projections from the Bank of Canada, such tariffs could slash Canadian GDP by up to 2.5% within the first year of implementation, potentially triggering a recession in America’s second-largest trading partner.
The tension emerges against a backdrop of deeply integrated supply chains. Walking through the cavernous Ford assembly plant outside Detroit last month, I witnessed firsthand how components cross the border up to seven times during production. Plant manager Robert Stevenson explained, “These tariffs don’t just hurt Canadians—they’d cripple American manufacturing and raise prices for consumers by thousands per vehicle.”
Canada’s Deputy Prime Minister Chrystia Freeland has signaled that Ottawa won’t hesitate to implement targeted retaliatory measures. “We’ve drawn up comprehensive response scenarios,” she told reporters in Ottawa yesterday. “While we hope for continued cooperation, we’re prepared to defend Canadian workers and industries with proportional countermeasures.”
Trade data from Statistics Canada shows bilateral trade exceeded $875 billion last year, with critical minerals for EV batteries, agricultural products, and energy comprising significant portions. Canadian officials have privately expressed confusion about Trump’s approach, given that the U.S. maintains a trade surplus with Canada in services and manufactured goods.
Experts from the Peterson Institute for International Economics note that invoking Section 232 “national security” justifications for Canadian tariffs would likely violate both WTO obligations and the CUSMA trade agreement Trump himself renegotiated during his first term. “It’s legally dubious and economically self-defeating,” said international trade attorney Jennifer Wong during a Georgetown University panel I moderated last week.
The political fallout extends beyond economics. At the NATO headquarters in Brussels, senior military officials expressed concern about how economic disputes might impact continental defense cooperation, particularly regarding Arctic security and NORAD modernization.
“We’re watching closely,” a NATO official speaking on background told me. “Security partnerships rely on trust and mutual respect—including in economic relationships.”
For communities along the border, the anxiety is palpable. In Blaine, Washington, where nearly 70% of the local economy depends on cross-border commerce, business owners describe an atmosphere of dread. “We’re still recovering from the pandemic border closures,” said Maria Sanchez, who owns a shipping and logistics company. “Another disruption could wipe out a generation of family businesses.”
Canadian business leaders aren’t sitting idle. The Business Council of Canada has launched an aggressive outreach campaign targeting influential Republican governors and members of Congress whose states depend heavily on Canadian trade. Their data shows that 29 U.S. states count Canada as their largest export market, potentially creating domestic political pressure against implementing the tariffs.
The situation highlights the complex interplay between campaign rhetoric and governance reality. Trump’s economic advisor Stephen Moore defended the tariff threat as “negotiating leverage” during a Fox Business appearance last week, suggesting the goal might be extracting concessions rather than actually implementing the tariffs.
However, some analysts remain unconvinced. “We’ve seen this playbook before,” said Dr. Eleanor Rodriguez of the Wilson Center’s Canada Institute. “The problem is that economic brinkmanship creates uncertainty that harms investment and planning even if the threats never materialize.”
For everyday citizens on both sides of the world’s longest undefended border, the uncertainty creates real-world consequences. Retirement portfolios are adjusting for volatility, companies are pausing expansion plans, and communities that have thrived on integration now face an uncertain future.
As both governments prepare for the transition of power in Washington, the fundamental question remains whether Trump’s second administration will prioritize campaign promises over economic pragmatism and longstanding alliances. Ambassador Hoekstra’s surprising candor suggests that even within Trump’s circle, the wisdom of economic confrontation with America’s closest ally remains contested ground.
