Donald Trump's threat to impose massive tariffs on Canadian exports and his trolling of Prime Minister Justin Trudeau are a key tactic in a negotiating strategy aimed at getting the best trade terms for the U.S., according to people who have worked with him or watched him closely over the years.
Trump is promising to impose a 25 percent tariff on all goods entering the United States from Canada and Mexico on Jan. 20, his first day in office, unless both countries restrict the flow of drugs and migrants across their borders.
Since then, the president-elect continued this threat, taunting Trudeau by calling him “governor” and, in subsequent social media posts, calling Canada “the 51st. state.”
Analysts say this approach echoes the trademark negotiating style that Trump has used for many years, both in business and during his presidency.
Stephen Moore, who served as Trump's economic adviser during his first term in the White House, says the president-elect intends to gain leverage in renegotiating the three-way trade deal between the United States, Canada and Mexico.
“I think there's no question that that's what he's doing here,” Moore said in an interview with CBC News.
“I've seen Trump firsthand and personally during his presidency and I've talked to him a lot about this,” said Moore, now a senior economist at the conservative Heritage Foundation.
“He is using the threat of tariffs to persuade countries to do things that he believes are in the interest of America's national security and economy.”
The strategy “worked quite well” in his first term
Although Moore is no fan of fares from the perspective of their impact on the economy, he understands why Trump is threatening to impose them on Canada and Mexico.
“I want to make sure the trade deals we have are fair for American workers and American companies,” he said. “It was a strategy that worked quite well in the first term and I hope it will work in the second term as well.”
Trump used a double whammy tariffs and taunts against Canada in 2018 during talks that led to the Canada-U.S.-Mexico Agreement (CUSMA). He imposed tariffs on steel and aluminum, threatened tariffs on car exports and called Trudeau “very dishonest and weak.”
Eugene B. Kogan, who teaches advanced negotiation skills at Harvard written about Trump's negotiating style, he says, says the president-elect has a long history of using the tactic of smearing his competition to gain an advantage.
“Prime Minister Trudeau is present political troubles at home, and I think President-elect Trump senses that weakness,” Kogan said in an interview with CBC News. “I smell blood.”
He says Trump “is an incredibly rational, brutally ruthless analyst of human weaknesses and political weaknesses, and that's where he senses his greatest advantage.”
He believes that Trump thinks “almost 24 hours a day” about how to exploit his opponent's weak points and turn them into an opportunity for profit.
Threatening stiff tariffs on such a long-time trading partner before taking office is typical of what Kogan describes as Trump's “win-lose” approach to negotiations.
Power movement to establish leverage
“He makes a move towards an advantage out of a desire to establish his leverage,” Kogan said. “The basic message is: 'I will make the situation unpredictable for the other side to the point that the other side will be under pressure to make concessions.' ”
Trump's transition team did not respond to a request for comment.
Many observers, from Wall Street to Bay Street and Congress, see Trump's tariff salvo on Canada and Mexico as a way to gain leverage in talks on the three-way trade deal, which is due for renewal in 2026.
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“This latest tariff threat effectively marks the beginning of negotiations,” international wealth management firm UBS Global said in a recent report information note.
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“Trump's best and most likely use of tariffs is as a bargaining chip to force Canada to make concessions” when CUSMA renegotiation takes place, – wrote the TD economist Brand Ercolao.
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“Right now, I see everything Trump does on tariffs as a negotiating tool,” said Iowa Republican Senator Chuck Grassley: according to “Polityka”..
Trump's pick for Treasury secretary, Scott Bessent, in an opinion piece published on Trump's website, praised the president-elect for using tariffs as a “negotiating tool with our trading partners.” Fox News website shortly after the elections.
Marc Thiessen, former U.S. President George W. Bush's chief speechwriter and a fellow at the American Enterprise Institute, said last week that Trump was both serious about imposing tariffs on Canada and using them in negotiations.
“If they don't come in and do what he wants them to do, he's going to put tariffs on them,” Thiessen told Fox News. “I think he also knows that Justin Trudeau is incredibly weak.”
US President-elect Donald Trump claimed on social media that he encouraged hockey icon Wayne Gretzky to run for prime minister during his Christmas visit. This is Trump's latest comment on Canadian politics, following jokes about Canada becoming the 51st US state and meeting with “Governor” Justin Trudeau.
Trump on Christmas Day sent that he encouraged Wayne Gretzky “to run for Prime Minister of Canada” and that the hockey legend will “win easily.” He also considered purchasing Greenland and taking control Panama Canal.
Trump's comments about Canada, Mexico, Greenland and Panama share a common thread of countering Russia and China, an unnamed transition official told The Washington Post.
“This is not just nonsense, it all has a coherent overall structure,” The Post quotes the official as saying. “Trump knows what levers to pull.”
Even if there is agreement that Trump's tactics toward Canada are intended to gain leverage, the big question that remains unanswered is what his ultimate goal might be.
Many doubt whether combating fentanyl trafficking and illegal migration – which Trump cites as the reason for threatening tariffs – is all he wants.
That view was confirmed Friday by two Trudeau cabinet ministers met with two candidates for Trump's cabinet in Florida to inform them about Canada's plan to improve border security.
Foreign Affairs Minister Mélanie Joly and Finance Minister Dominic LeBlanc traveled to Florida on Friday to discuss potential tariffs with representatives of the incoming Trump administration.
A senior Canadian government source told CBC's Katie Simpson that Trump's fixation on the U.S. trade deficit with Canada came up during the meeting.
Trump has repeatedly – and incorrectly – described the trade imbalance as Canada being subsidized by the United States.
Oil imports fuel the US trade deficit
The trade deficit, which is approximately $75 billion in 2023, is largely the result of record oil exports from Canada to its southern neighbor.
According to. The US imported more oil from Canada last year than from all other countries combined statistics from United States Energy Information Administration.
Moore says he thinks Trump's goal is to make North America “geopolitically the most important region in the world when it comes to energy.”
In his 1987 book The art of making a dealTrump wrote: “Leverage: Don't Deal Without It.” There are many indications that almost 40 years later, he still lives by this maxim.