By LaBode Obanor
Imagine a merchant who has spent decades doing business with his most dependable customer. The customer lives next door. He buys more from the merchant than almost anyone else. He supplies the merchant with materials the merchant needs to make his own products. Their businesses have become so intertwined that each prospers partly because the other prospers. Although they occasionally have disagreements, the relationship works because both understand its value. Then one morning, the merchant makes a discovery and say to himself “My customer needs me more than I need him.” He is probably right. But what he did not understand is that
Instead of treating that dependence as a source of strength, he decides to weaponize it. He decides to raise the customer’s costs, threatens additional penalties, changes previously agreed terms and repeatedly reminds him that his store is the biggest in the neighborhood and therefore the customer has nowhere else to go.
At first, the strategy seems to work. The customer suffers short term, he complains, tries to negotiate, he even makes concessions because moving decades of business elsewhere would be costly and difficult. The merchant congratulates himself. He believes he has won. However, what the merchant does not realize is that every blow he delivers lands on his own balance sheet. Every evening after leaving his store, his best customer began calling other merchants. Sooner rather than later, those calls will turn into contract. In trying to dominate his best customer, he teaches him to shop elsewhere, and in the end, the merchant wins nothing but an empty store.
That merchant is Donald Trump. The customer is Canada. And the other merchants, e.g., China, are watching.
Donald Trump may ultimately win his tariff showdown with Canada, and that is precisely what makes the whole affair so bone-headed. The United States has the larger economy, the larger consumer market and considerably greater capacity to inflict economic pain. Canada sends roughly three-quarters of its merchandise exports south. Geography aside, Washington holds the advantage. If this becomes a contest of endurance, Ottawa steps into the ring several weight classes lighter. An eventual knockout may be inevitable.
But real strength is measured not by how much you can hurt your friends, but by whether hurting them makes you stronger. On this yardstick, Trump’s trade war with Canada fails that test spectacularly. Effectively taken one of the most extraordinarily successful economic and strategic relationships between two neighboring countries and converted it into an exercise in coercion. The error here is Donald Trump refusal to distinguish between an economic competitor and an integrated ally, conflating Canada with China. China is America’s principal industrial and geopolitical competitor. Canada is not. Our neighbor to the north is an economic companion, and a NATO ally. A NORAD partner. Canada is an enormous purchaser of American goods, at the same time a supplier of oil, uranium, aluminum, potash, lumber, electricity and critical minerals. A partner in manufacturing supply chains so integrated that components can cross the border repeatedly before becoming finished products.
Consider automobiles. A vehicle assembled in Ontario is not just “Canadian.” Its components may have originated in Michigan, Ohio, Ontario, Quebec, Mexico and elsewhere, crossing national borders multiple times before the finished vehicle ever reaches a dealership. Now introduced tariffs into the production chain, The cost of imported Canadian aluminum rises. Steel becomes more expensive. Automotive components cost more. Lumber used by American builders becomes more expensive. And American manufacturers that depend on those Canadian inputs are left to absorb the additional costs, pass them along to consumers, find alternative suppliers, or somehow reorganize supply chains that took decades to build. This is supposed to make America cheaper and more competitive as a manufacturing base. Therein lies the contradiction. Tariffs may protect selected domestic industries and, over time, encourage some production to relocate to the United States. But when imposed on inputs that American manufacturers already depend upon, they can also raise production costs for the very businesses Washington claims it is trying to strengthen.
Trump is therefore attempting something economically peculiar: making American manufacturing more competitive by first making parts of American manufacturing more expensive.
Then Canada Retaliates
Although Canada cannot economically overpower the United States, it does not need to. Its retaliatory tariffs are designed partly to create political pain on American farmers, manufacturers and appliance companies who sell to Canada. So, the cycle becomes wonderfully absurd. Trump taxes Canadian products. American importers pay. Carney taxes American products. Canadian importers pay. Politicians in both countries collect tariff revenue, everyone wins except the people swiping their cards at the shops. Consumers in both countries bear the pain via higher prices.
Trump’s Greatest Achievement May Be Canadian Economic Nationalism
For decades, Canadian policymakers often worry about excessive dependence on the United States. Over the years Canadian businesses had convinced themselves that it doesn’t make economic sense to send products thousands of miles across oceans when the world’s richest consumer market sits next door. It was a brilliant and rational choice to integrate with America. In 2024, more than 76% of Canadian merchandise exports went to the United States. This extraordinary dependence gave America a tremendous influence which has not been tested until now. After Trump’s so called Liberation Day in 2025, Canadian export to the U.S. took a precipitous nosedive of 72.5% in 2025. As a result, Canadian policymakers are talking more seriously about Europe, Asia, new export infrastructure, internal trade barriers, critical minerals and economic diversification.
Trump may have accomplish what generations of Canadian nationalists could not achieve. His action has convinced Canadian businesses that depending too heavily on America is dangerous. And China is watching. All China need is for Canada to become less exclusively dependent on America. And signs have already shown that the two countries have already moved toward repairing their trade relationship. Canada has pursued renewed market access for its agricultural products while relaxing some restrictions affecting Chinese electric vehicles. Canada has also established ambitions to substantially increase exports to China by 2030.
America First, or Trump First?
Donald Trump sold his second term to American under the banner of “America First”. Yet, from the vantage point of ordinary Americans, too many of the policies dispensed since his inauguration have made America seem to come last. Americans were promised a cooling inflation and lower prices, instead, they are being asked to absorb the costs of tariffs, disrupted supply chains and geopolitical instability. We were promised economic nationalism that would punish foreign businesses, yet tariffs collected at American ports are initially paid by American importers. When businesses cannot absorb those costs, the bill travels down the supply chain until it reaches the factory, the construction site and ultimately the checkout counter. We were promised peace, instead, we got an increasingly volatile Middle East that threatens energy markets, shipping routes and household costs. Every geopolitical conflagration eventually finds its way into the American family’s budget, whether through gasoline, transportation, food or manufactured goods. Trump promised to drain Washington’s swamp; instead, he put his name on the resort, stocked it with alligators, opened a trading desk in the White House, picked fights with America’s friends, while ordinary Americans are sent the invoice and told to shut up and pay.
And somewhere amid all this chest-thumping, our merchant is still standing proudly behind his counter, congratulating himself. China, meanwhile, must be watching from across the street, scarcely believing its luck. Perhaps the cruelest fraud of “America First” is that Trump gets the power, his circle gets the opportunities, foreign governments get the threats, while Americans absorb the consequences. And when our triumphant merchant finally looks up from counting today’s tariff receipts, he may discover that the customer he spent years reminding of his dependence took the warning seriously and learned to shop elsewhere.
Trump may win the tariff war, bully Canada into concessions, declare victory and congratulate himself on another masterclass in the art of the deal. But if the price of that victory is a Canada that buys less from America, trusts America less and increasingly builds its economic future beyond America, then Trump will have accomplished something remarkable: making China more attractive, Canada more independent and America less indispensable, all in the name of putting America first.
