Donald Trump’s threat of whopping tariffs on Canadian exports and his trolling of Prime Minister Justin Trudeau are key tactics in a negotiating strategy to extract the best trade terms for the U.S., according to people who have worked with or closely observed him over the years.
Trump is promising to slap a 25 per cent tariff on all goods entering the U.S. from Canada and Mexico on Jan. 20, his first day in office, unless the countries curb the flow of drugs and migrants across their borders.
The president-elect has since followed up that threat by taunting Trudeau by calling him “governor” and referring to Canada as the “51st state” in a succession of social media posts.
Analysts say this approach echoes the trademark negotiating style that Trump has employed for many years, both in business and the presidency.
Stephen Moore, who served as an economic adviser to Trump during his first term in the White House, says the president-elect is aiming to get leverage in renegotiating the three-way trade agreement between the U.S., 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 up-front and personal over his presidency and I’ve talked to him quite a bit about this,” said Moore, now a senior economist at the conservative Heritage Foundation.
“He uses the threat of tariffs to get countries to do things that he thinks are in America’s national security and economic interests.”
Strategy ‘worked out pretty well’ in 1st term
Although Moore is no fan of tariffs from the perspective of their impact on the economy, he understands why Trump is threatening to impose them on Canada and Mexico.
“He wants to make sure that the trade deals that we have are fair for American workers and American companies,” he said. “That’s been a strategy that worked out pretty well in the first term, and I hope it will in the second term as well.”
Trump used the one-two punch of tariffs and taunts against Canada in 2018 during the talks that led to the Canada-U.S.-Mexico Agreement (CUSMA). He slapped tariffs on steel and aluminum, threatened tariffs on auto exports and called Trudeau “very dishonest and weak.”
Eugene B. Kogan, who teaches advanced negotiation skills at Harvard and has written about Trump’s negotiating style, says the president-elect has long used the tactic of denigrating his competition as a way of gaining leverage.
“Prime Minister Trudeau is in political trouble at home, and I think that president-elect Trump is sensing the weakness,” said Kogan in an interview with CBC News. “He smells blood.”
He says that Trump “is an incredibly rational, brutally ruthless analyst of human weakness and political weakness, and that is when he senses most of his leverage.”
He believes Trump thinks “on an almost 24-hour basis” about how to exploit an opponent’s vulnerabilities and turn them into opportunities for gain.
Launching a threat of stiff tariffs against such a longstanding trading partner even before taking office is emblematic of what Kogan describes as Trump’s “win-lose” approach to negotiations.
Power move to establish leverage
“He is making a power move driven by the desire to establish his leverage,” Kogan said. “The underlying message is, ‘I will make it unpredictable for the other side, so much that the other side will be under pressure to make concessions.’ “
Trump’s transition team did not respond to a request for comment.
There are a range of observers from Wall Street to Bay Street to Congress who view Trump’s tariff salvo against Canada and Mexico as a means of gaining leverage in talks on the three-way trade deal, which comes up for renewal in 2026.
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“This latest tariff threat effectively marks the start of negotiations,” said international wealth management firm UBS Global in a recent briefing note.
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“Trump’s best and most likely use of tariffs are as a bargaining chip to force Canada into concessions” when CUSMA is renegotiated, wrote TD economist Marc Ercolao.
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“Right now, I see everything that Trump’s doing on tariffs as a negotiating tool,” said Iowa Republican Sen. Chuck Grassley, according to Politico.
Trump’s pick for treasury secretary, Scott Bessent, praised the president-elect for using tariffs as “a negotiating tool with our trading partners,” in an opinion piece published on the Fox News website shortly after the election.
Marc Thiessen, a chief speechwriter for former U.S. president George W. Bush and a fellow at the American Enterprise Institute, said last week that Trump is both serious about imposing tariffs on Canada and about using them to negotiate.
“If they don’t come around and do what he wants them to do, then he will slap those tariffs on them,” Thiessen told Fox News. “I think he also knows that Justin Trudeau is incredibly weak.”
