Canada stands at a crossroads as Trump enacts shattering political changes with the stroke of a pen

From its earliest moments as the 19th-century concept of a nation, a land at the crown of the Americas that had yet to stitch its way to the Pacific or fix in place its Atlantic Coast, Canada has pursued its existence in the bosom of other, greater states.

This was a country born from the British Empire, fashioned by the English and the French, and then, in the postwar period, nurtured into modernity by a privileged place in the American sphere of influence.

Now, with each seismograph stroke of Donald Trump’s permanent marker, those old comforts are falling away. Continental free trade is fraying, and with it the fabric of the national economy. The certainty of security upheld by a benign democratic superpower has been shaken. The very sovereign persistence of a country nearing 160 years of history has been called into question.

“We’re suddenly finding ourselves on our own. This is a shock,” said Margaret MacMillan, the notable Canadian historian.

“We’re facing something that we haven’t faced before, in a way – that we’re going to have to make up our own minds.”

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It is a national crossroads, thrust upon Canada not by the bloodiness of foreign wars or the dislocations of a global pandemic, but by the shattering political changes in the only neighbour with which this country shares a land border.

Geography, culture and shared aspiration have deeply interwoven the U.S. into Canadian life. In trade, travel and leisure, the existence of an international border with the U.S. has been less an obstacle than an afterthought.

Even the basic energy plumbing of the continent, the spiderweb of pipelines that deliver oil and gas, has been built with little consideration to the separation between Canada and the U.S.

Now, Mr. Trump is cleaving the continent. In the 75 days since he returned to office, he has not merely renamed mountains and sea, he has set in place tariffs that are remaking the border into a meaningful line dividing North American trade.

Goods that once moved freely must now be carefully scrutinized based on origin of their components for the calculation of new duties. People who once crossed easily must consider the possibility of lengthy interrogation. Security is vanishing from jobs that once depended on cross-border integration. Auto plants are suspending operations and small manufacturers are shedding employees. Canadians are abandoning travel plans south.

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Last year, the U.S. bought 77 per cent of the goods Canada sold abroad and provided nearly half of Canadian imports. No other trading partner comes close. But proximity and free trade have made Canada an economic adjunct to a superpower, vulnerable to the whims of its leadership – a President determined to amass for his country alone the spoils of technological progress and global trade.

“We must now think about how we ensure that the country survives in a way that we haven’t had to think about before,” said Ms. MacMillan, who is an emeritus professor at the University of Toronto and Oxford University.

History shows that mere existence is not destiny. Empires crumble. Countries crack apart. Canada’s own self-mythology, the notion of sleeping next to an elephant, suggests the very real possibility of being crushed.

But Canada’s history has shown that such a fate is itself not certain.

“It may well be that years from now, the next generation is going to look back at Jan. 20, 2025, and see this as the day of Canadian independence, when for the first time in our history Canadians genuinely took responsibility for their own future into their own hands – and where we became truly sovereign,” said Perrin Beatty, who was a federal cabinet minister under prime ministers Joe Clark and Brian Mulroney before going on to lead Canadian Manufacturers & Exporters and the Canadian Chamber of Commerce.

Or as Mr. Trump himself put it in a social-media post Friday afternoon: “ONLY THE WEAK WILL FAIL!”

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It was 32 years ago that the leaders of Canada, Mexico and the United States prepared to ratify the North American free-trade agreement in a moment of triumph against opponents, whose shouts continued to ring out in Parliament as prime minister Brian Mulroney signed the deal.

Mr. Mulroney dismissed his critics as “little protesters” intent on living in a ”fortress Canada.” In Washington, meanwhile, president George H.W. Bush described NAFTA as the advent of a new day for the hemisphere.

“We have committed ourselves to a better future for our children and for generations yet unborn,” he said. The time would soon come, he said, “when trade is free from Alaska to Argentina.”

Less than three decades later, Mr. Trump was in the White House, and calling NAFTA “perhaps the worst trade deal ever made.”

In some ways, it is Mr. Trump’s views that are better aligned with the sweep of U.S. history. In 1789, George Washington signed into law the first major bill passed by the new U.S. Congress, a bill imposing new tariffs on foreign goods. Another tariff act came in 1828, followed by the 1866 abrogation of a Canadian-American Reciprocity Treaty and then, in the wake of the First World War, the Emergency Tariff of 1921 – and, less than a decade later, the Smoot-Hawley Tariff Act of 1930.

“Tariffs have been the rule, not the exception. We have been through at least three periods of high U.S. tariffs, each lasting from 30 to 50 years,” said Chris Alexander, a former Canadian diplomat who was minister of citizenship and immigration under Stephen Harper and now works as corporate director and adviser.

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Those tariffs have shaped Canada in fundamental ways. For a nascent nation, the U.S. abrogation of the reciprocity treaty gave new urgency to the construction of pan-Canadian railroads and the admission of British Columbia and Manitoba into Confederation.

A century-and-a-half later, that history has new resonance – and Canada, Mr. Alexander said, once again needs to build new corridors for trade: east-west pipelines and power lines, export outlets for liquefied natural gas, new mines and new capacity to ship their products to market.

“There’s no substitute for infrastructure,” he said.

“We should aim to be a strategic energy and mineral supplier to both Europe and Asia. Full stop,” he said.

Canada, he said, has arrived at an intensely tenuous moment, the kind that can “make or break countries, alliances and economies,” Mr. Alexander said. “They have also been precursors to war – or more enduring periods of peace. We can’t afford to be simple-minded about any of this. The stakes are too high.”

Inaction carries its own risks, as recent history has shown. It is Canada’s yawning surplus in the trade of goods with the U.S. that lies at the core of Mr. Trump’s economic resentments toward this country.

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But some elements of that surplus are self-inflicted, a product of the inability by Canadian companies and governments to fetch global prices for the country’s energy exports. The lack of sufficient oil export capacity – after years of bruising internal battles over new pipelines – has forced Canadian crude to sell more cheaply into a captive U.S. market. The value of that discount is significant.

“America’s trade deficit with Canada is because Canada has provided U.S. consumers with cheaper energy prices than they would likely have received otherwise,” Ian de Verteuil, an analyst at CIBC Capital Markets, argued in a recent research note.

Yet any potential future gains from changing course in Canada are likely to be won only through hardship, as this week’s plunging stock markets have underscored.

“If we are going to be seeing tariffs anywhere close to the things that are being talked about – even the tariffs in place now, on steel, aluminum and autos – that’s going to leave us poorer as a country,” said Todd Hirsch, a Calgary-based economist and public speaker. “Our economy will shrink. And we will feel it, too. Unemployment will rise. People will lose their jobs. I don’t think there’s any way we can really sugarcoat this.”

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In part, he said, what Mr. Trump has forced is a reckoning with the ill effects of free trade, which has “made us a little bit soft and flabby when it comes to global competitiveness. We’ve never really had to work all that hard to sell to the Americans.”

Mr. Hirsch favours a weight-loss analogy for the national effort that, he says, Canada must now exert. The necessary actions are not a great secret.

“None of it is new,” Mr. Hirsch said. “It’s obvious.”

The great difficulty lies in doing the work.

“We need to do the program,” Mr. Hirsch said.

He recalled early in his career working as a research assistant at the Canada West Foundation when it helped to organize a conference toward an agreement on internal trade.

“They all announced, ‘we’re eliminating barriers to trade’ – and there were handshakes and lots of photos,” Mr. Hirsch recalled. “And then all the premiers went back to their respective capitals and nothing happened.”

That agreement is nearly as old as NAFTA itself. But its promise of breaking down the regulatory obstacles to trade between provinces has never been fully met.

Now with the U.S. returning to tariff levels not seen in a century, ”if we don’t finally bring down barriers, I’m not sure if we ever will,” said Rebekah Young, a former mining engineer who is now head of inclusion and resilience economics at the Bank of Nova Scotia.

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Such an effort will not, of course, secure new international markets for Canadian goods struck by tariffs and priced out of the U.S. But “there’s a lot of gains that could be made not just in selling amongst ourselves, but productivity gains from greater competition,” Ms. Young said.

Looking for gains inside Canada’s borders comes with another advantage: “we have control over it,” she said. “Even if we have a permanently damaged trading relationship with the U.S., that is still going to pay off.”

At the same time, economic destiny will never prove easy to extract from geography. No number of foreign trade deals – no construction of additional sea ports – will alter this country’s proximity to the U.S., whose status as the world’s pre-eminent economy seems secure for years to come.

“We have to try as hard as we can to fix the situation with the U.S. And I think it’s salvageable,” said Erin O’Toole, the former Conservative leader who is now with Groupe ADIT, a Paris-headquartered strategic intelligence company. He has advocated an energy pact in which Canada would assure the U.S. supplies of crude oil, critical minerals and electricity. “We could even offer to build the Keystone XL pipeline ourselves,” Mr. O’Toole said.

Offering such assurances to the U.S., he said, should enable Canada to secure preferential treatment on tariffs, and offer enough economic respite that the country can begin to work in earnest toward other objectives, such as diversifying its markets.

“If we can salvage a working deal with the United States in the next six months, then we’re minimizing the pain there,” Mr. O’Toole said.

In the meantime, political and business leaders from across the country say Canada has little choice but to look for new markets outside the U.S. – even if it means confronting long-standing concerns about trading more closely with countries whose values differ from those in Canada.

“If you were a business, would you want one customer? Of course you wouldn’t. That’s why diversification matters,” said Stephen McNeil, who as premier of Nova Scotia led a bid to boost sales of lobster and other products to China. That effort achieved tangible success. Last year, 52 per cent of the province’s seafood was sold to the U.S., and 26 per cent to China. Reducing reliance on the U.S. meant Nova Scotia went from merely accepting a price for its catch to setting that price, Mr. McNeil said. That is a “big difference.”

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But trade with China has in the past – and will undoubtedly in future – force difficult discussions.

Mr. McNeil’s pursuit of greater Chinese sales came, in part, at a time of acute tension with Beijing, which imprisoned and interrogated two Canadian citizens, Michael Kovrig and Michael Spavor, in December, 2018. The following year, Mr. McNeil became the first Canadian politician to return to China, arriving for a trade mission while both men remained behind bars.

Mr. McNeil, however, argued that critics of his relations with China at the time failed to acknowledge contemporary problems in the U.S., which was separating families at that country’s southern border – harsh treatment of migrants that has returned with the re-election of Mr. Trump.

“My job as premier was to try to grow the economy,” he said. “You can’t sit in an ivory tower and pick and choose where you’re going to apply your standards.”

Yet if Nova Scotia’s experience has suggested that diversification can lead to new prosperity, it has also shown that developing additional markets can offer an imperfect shield from the bruising global trade battles that Mr. Trump has helped to intensify. In late March, China imposed its own 25-per-cent tariffs on Canadian seafood.

Still, Canada has reason to meet the new tumult of protectionism with optimism, as a country endowed not merely with a wealth of natural resources, but with what remains an enviable position in the world.

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“The good news is that people like us, and the good news is that we have things they want to buy: Fossil fuels. Uranium. Critical minerals. Services,” said Michael Ignatieff, the former Liberal leader who is a professor of history at Central European University in Vienna.

Those attributes should equip Canada with everything it needs to withstand ruptures with the U.S.

For Canada, he said, perhaps the most important question lies in the ability of the country – its politicians, its business leaders, its voters – to stand together for long enough to make changes that will almost certainly prove painful, even if they have now become urgently necessary.

”It’s not that Canada can’t find new markets in Asia, new markets in Europe. It’s not that it can’t increase the strength of its internal economy and reduce the trade barriers and build more interprovincial infrastructure connections. All of this is possible.”

But, he said, “the real problem is time.”

As Canada looks to the future, it must do so with the knowledge that if the world has changed fundamentally, the comforts and certainties of the past will not quickly return.

“You have to sustain a national unity over the long haul – and the long haul is 10 years,” Mr. Ignatieff said. “It can be done. But it’s going to be tough.”

With a report from Emma Graney