How should Canada react to Trump’s threats?

Summary

The Rachman Review: "How should Canada react to Trump’s threats?"

Date: March 6, 2025
Host: Gideon Rachman (Financial Times Chief Foreign Affairs Commentator)
Guest: Chrystia Freeland (Former Deputy Prime Minister of Canada; Leadership Candidate, Liberal Party)

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Episode Overview

This episode focuses on the escalating tensions between Canada and the United States under a renewed Trump presidency. The discussion centers around proposed U.S. tariffs on Canada and persistent rhetoric from Donald Trump suggesting Canada should become America's "51st state." Chrystia Freeland, a key Canadian political figure running for Liberal Party leadership, joins Gideon Rachman to examine how Canada should respond to these unprecedented threats—balancing firmness and unity with strategic negotiation.

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Key Discussion Points & Insights

1. Canada’s Response to American Aggression

• Retaliatory Strategy
  • Freeland stresses the importance of smart, targeted retaliatory tariffs—designed to inflict maximum political/economic pain on the U.S., while minimizing self-harm.
  • She argues this approach can create internal pressure within the U.S. to reconsider policies.
  • Quote:

    "If you do need to use retaliatory tariffs...be smart and surgical about it and...cause maximum pain to your adversary while doing minimal harm to your own people and your own economy."
    — Chrystia Freeland [01:41]

2. Negotiating With Trump

• Critical Yet Possible

  • Despite erratic and shifting Trump demands—including "trumped up" grievances like fentanyl exports—Freeland insists negotiation is both possible and necessary.
  • She recalls the previous renegotiation of NAFTA, which she believes resulted in a stronger deal for Canada.
  • Quote:

    “A lot of harsh words were exchanged...but at the end of the day, we got to a renegotiated trade deal...from Canada's standpoint, was even better than the original NAFTA.”
    — Chrystia Freeland [02:47]

• On Trump’s Rhetoric

  • Freeland calls out Trump’s issues as "flimsiest of pretexts," flipping from one grievance to another.
  • She addresses the "51st state" assertion head-on, firmly rejecting it.
  • Quote:

    "Our sovereignty is not negotiable, and Canadians are incredibly united and clear about that."
    — Chrystia Freeland [04:28]

3. The Threat to Canadian Sovereignty

• Public Reaction
  • Freeland describes a shift in Canadian public mood—initial fear and hurt have given way to unity and determination.
  • Canadian strengths are highlighted: energy, agriculture, manufacturing, and technology sectors.
  • Freeland underscores the asymmetry of resolve: Canada is more invested in the outcome, making Canadians more prepared to endure the costs.
  • Quote:

    “We are absolutely conscious that the United States is bigger and more powerful...but we don’t minimize our own strength either.”
    — Chrystia Freeland [05:21]

  • Quote:

    “For Canadians, we get that literally everything is at stake here...I really do not think your regular American person thinks, wow, I’m prepared to suffer quite a bit to show those Canadians.”
    — Chrystia Freeland [07:39]

4. Political Unity in Canada

• National Cohesion

  • Despite internal political transition (Trudeau’s resignation, pending elections), Freeland affirms that all major political actors support a "Team Canada" approach. Strong unity is expected to persist even through the election cycle.
  • Quote:

    “This is one issue where we do have very, very strong national unity...All of the leadership candidates have said, we support the Team Canada approach.”
    — Chrystia Freeland [09:03]

• Electoral Positioning

  • Freeland outlines why her leadership is best suited for this moment, referencing her previous negotiation successes and coalition-building experience with provincial and international partners.

5. Economic Interdependency—and Leverage

• Trade Dependency Discussion
  • Rachman notes the U.S. is far less dependent on Canadian trade than vice versa (75% of Canadian exports go to the U.S.), suggesting an ultimate vulnerability for Canada.
  • Freeland counters with the significant U.S. reliance on Canadian resources and past examples where targeted Canadian retaliation led to the lifting of U.S. tariffs.
  • Quote:

    “Canada, uniquely in the world, actually does have economic leverage over the United States. We are the largest export market for the U.S. — larger than China, Japan, the UK, and France combined. And we will use that strength...”
    — Chrystia Freeland [13:45]

6. Preparing for Tough Times—But Seeking Off-Ramps

• Acknowledgement of Economic Pain
  • Freeland concedes that tough times are possible but emphasizes continuous diplomacy and making off-ramps clearly available to the U.S. and its citizens.
  • The hope is that internal U.S. pressure—businesses, consumers, markets—will incentivize a more reasonable U.S. stance.
  • Quote:

    “Part of being smart is constantly offer off ramps, constantly make clear...this doesn’t need to be happening. You don’t need to be paying more for gas...for your groceries...lose your job...”
    — Chrystia Freeland [15:17]

7. Global Implications and the Western Alliance

• Impact on Rules-Based Order
  • Rachman asks what it means for NATO when two key allies enter economic conflict.
  • Freeland sees this as a “hinge moment”—potentially undermining not just economic agreements but also military alliances and the post–World War II order.
  • Freeland proposes a summit with leaders from Mexico, Denmark, Panama, E.U., and NATO to reaffirm the international rules-based order and collective defense of sovereignty.
  • Quote:

    “This is a moment when the whole rules based international order...is really directly being attacked. ...This action by the United States against a NATO and NORAD ally does call into question the validity of military alliances.”
    — Chrystia Freeland [17:54]

8. Comparisons to Ukraine

• Sovereignty Under Threat
  • Rachman draws a parallel between current Canadian-American conflict and Ukraine’s struggle against Russia, with clear caveats.
  • Freeland is careful not to equate the situations given the violence and existential threat faced by Ukraine. She emphasizes respect and gratitude for the Ukrainians’ fight for democracy.
  • Quote:

    "I am inspired by the Ukrainians. I think all freedom loving people in the world should be...That is a truly pivotal battlefield for us all."
    — Chrystia Freeland [20:44]

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Notable Quotes & Memorable Moments

• On Trump’s “51st state” rhetoric:

  "I have not experienced a feeling of such intense and widely shared patriotism in Canada, probably in my life...We are definitely not becoming the 51st state."
  — Chrystia Freeland [04:28]

• On Trump’s view of Freeland:

  "During the NAFTA negotiations, he used to call me the killer. I thought he meant that positively."
  — Chrystia Freeland [12:47]

• On U.S. and Canadian interdependence:

  "We are one of the few countries in the world that can say we are an energy superpower, an agricultural powerhouse, a manufacturer, and a technology leader—all at once."
  — Chrystia Freeland [05:21]

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Timestamps for Key Segments

• 01:41 — Freeland on retaliatory tariffs and smart strategy
• 02:47 — Negotiating with Trump, NAFTA renegotiation insights
• 04:28 — Response to 51st state rhetoric and Canadian unity
• 05:21 – 08:32 — Canadian strengths, emotional trajectory, and asymmetry of resolve
• 09:03 – 12:03 — Domestic political unity and electoral stakes
• 13:45 — Economic leverage and lessons from steel/aluminum tariffs
• 15:17 — Preparing for hardships, keeping diplomatic off-ramps open
• 17:54 — Impact on international order, proposal for an allied summit
• 20:44 — Ukraine comparison, inspiration, and support

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Tone and Style

Both Rachman and Freeland remain analytical yet passionate, balancing realism (about risks and difficulties) with resolve and optimism for Canada’s ability to stand up to U.S. pressure. Freeland’s tone is alternately firm, patriotic, and reflective—determined not to cede ground on sovereignty but pragmatic about diplomacy and coalition-building.

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Summary

Chrystia Freeland articulates a robust, united, and pragmatic Canadian stance toward mounting U.S. threats under Trump. She rejects all notions of reduced sovereignty, outlines Canada’s potential for strategic leverage, and expresses confidence in both national unity and international partnership. The episode underscores the broader stakes: not just for Canada-U.S. relations, but also for the international rules-based order, with a call for likeminded alliances to stand together in defense against destabilizing populism and nationalism.

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This summary omits all advertisements, podcast intros/outros, and non-content sections for clarity and focus.

Transcript

[Gideon Rachman]

Hello and welcome to the Rachman Review. I'm Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week's podcast is about Canada and its relationship with the United States. My guest is Christia Freeland, former Deputy Prime Minister of Canada, who's running for the leadership of the governing Liberal Party. Donald Trump's repeatedly insisted that Canada should become America's 51st state. So how should Canada respond?

[Christia Freeland]

Canadians are reasonable and we are polite, but we will not back down from a fight, not when our country and the well being of everyone in it is at stake.

[Gideon Rachman]

That was Justin Trudeau, Canada's Prime Minister. And Christopher Freeland is one of the two leading candidates to replace him as leader of the Liberal Party and Prime Minister. The other is Mark Carney, the former Governor of the bank of England, who is currently the favourite to win the vote for the Liberal leadership, which takes place this weekend. A few months ago, the Liberal Party of Trudeau, Freeland and Carney was miles behind in the polls for Canada's next general election, which will be held later this year. But the opposition Conservatives have been close to Trump, and that's hurting them with the Canadian public. With the Liberals now opening up a narrow lead in the polls. Before we get to our interview, a word of explanation. This conversation was recorded a few weeks back when the Trump administration was poised to impose tariffs on Canada. At the last minute, Trump delayed the tariffs, and so we delayed running the interview with Christopher Freeland. We began by discussing how Canada should respond to Trump's America.

[Christia Freeland]

Trade wars are never a good thing, and tariffs are not a good thing either. But if you do need to use retaliatory tariffs, the thing to do is be smart and surgical about it and to design your tariffs in such a way to cause maximum pain to your adversary while doing minimal harm to your own people and your own economy, and to use that pain to help create a domestic constituency in the other country that recognizes the folly of what is happening. So that's what I mean when I say we need to be united, strong and smart. And that is what Canada is doing and what Canada will continue to do.

[Interviewer]

You talked about this being a negotiation, but is it possible to negotiate at this point, when Trump's demands seem to be shifting and some of his grievances seem almost imaginary, like Canada's role in exporting fentanyl to the United States?

[Gideon Rachman]

I mean, where do you start a negotiation like that?

[Christia Freeland]

Look, I think ultimately it is not only possible, it is necessary to negotiate, and it is absolutely possible to negotiate with President Trump, I did it before the last time he was in office, and we had some tough moments. A lot of harsh words were exchanged in public and in private. But at the end of the day, we got to a renegotiated trade deal, a deal that President Trump said was the best trade deal ever, a deal that was also supported by Nancy Pelosi and the Democrats, and a deal that, from Canada's standpoint, was even better than the original nafta. So I think a negotiation absolutely is possible and necessary, and I think there can be a lot of rhetoric and even really terrible actions, and you can still end up in a negotiation. And having said that, you're quite right, Gideon, that for the moment, the issues that the US Is presenting as problems that they have with Canada are, if you will forgive me, entirely trumped up. These are the flimsiest of pretexts, and they seem to change. You know, one day it's fentanyl, another day it's asylum seekers. And then, to top it all off, periodically, and Canadians are told, if only we became the 51st state, none of this would matter.

[Interviewer]

So how seriously do you take this 51st state rhetoric? Because if that's the goal, then really there is no negotiation, is there?

[Christia Freeland]

I take it really seriously, and I take my country's sovereignty extremely seriously. Our sovereignty is not negotiable, and Canadians are incredibly united and clear about that. You know, I have not experienced a feeling of such intense and widely shared patriotism in Canada, probably in my life. Just walk down the street and people are talking about it, and people are saying, I'm proud to be Canadian. And we are definitely not becoming the 51st state. State CINCLOUS le Quebec.

[Interviewer]

But it must also be, can I say, frightening to have the United States, the world's most powerful country, threatening your sovereignty. Is there a feeling of apprehension as well in Canada?

[Christia Freeland]

You know, I think we started off with some fear. I think the next feeling that we had was being really hurt, because the relationship between Canada and the United States is a very close one and has been for decades, if not centuries. We are friends. We're neighbors. Most of us have family on both sides of the border. Ronald Reagan famously described our relationship as the relationship of kin. And he said our two countries have the most mutually beneficial relationship of any two countries in history. That's not an exaggeration. So there was this moment of hurt. I would say that Canadians have now moved to anger and determination. We are absolutely conscious that the United States is bigger and more powerful than we are. We are Aware that they are the world's superpower. But we are also aware that we are a country with a lot of strength. We are an energy superpower and in fact export energy, including to the United States. We are an agricultural powerhouse and in fact export food, including to the United States. We are a manufacturer. We build and make things in Canada, and we build and make things together with the Americans. And that mutually beneficial interconnection, particularly in the car sector, is going to be wrecked if this tariff war goes on. That's bad for us, but it's also bad for our American friends. We are a technology powerhouse. We have brilliant technologists, we have brilliant technology companies. One of the very small number of world leading AI companies is based here in Toronto. And then finally, Canadians are strong and smart, according to the oecd. Canadians are the best educated people in the oecd. Smart. So we don't minimize the power and might of the United States. We recognize that, but we don't minimize our own strength either. And the final thing I'll say, Gideon, is we also know that this matters so much more to us than it does to the Americans. Right? That's where, you know, that power seesaw tilts in our favor. Because for Canadians, we get that literally everything is at stake here. And so we're prepared to go through some tough times to defend our national interest and to defend our sovereignty on the other side of the border. I really do not think that your regular American person has a beef with Canada. I really do not think your regular American person thinks, wow, I'm prepared to suffer quite a bit to show those Canadians. And so that plays to our advantage.

[Interviewer]

So I take that asymmetry of resolve is potentially a real strength for Canada in what looks like it might be a trial of strength. If I can return to something you said earlier. You said Canada needs to stay united. That was the first thing you said. But this is coming at a very tricky moment in Canadian politics. Prime Minister's resigned. You're running to be his successor as leader of the Liberal Party and then Prime Minister, and then there'll be a general election. In that political context, can Canada stay united?

[Christia Freeland]

Absolutely. This is one issue where we do have very, very strong national unity. I'll start with the Liberal Party. All of the leadership candidates have said, we support the Team Canada approach. We are going to stand with our country. Obviously, the Prime Minister has been doing a magnificent job and he has the full support of his party and I would say the full support of Canadians. And I fully expect all of the other parties in Parliament to take the same position.

[Interviewer]

But when it comes to an election, if you're leading the Liberal Party into the election and you're up against the Conservatives, is it really realistic to expect that the two parties will take the same line on how to deal with this?

[Christia Freeland]

For sure, there could be differences in the detail. People might outline different negotiating strategies, and I think that would be fair enough. People might also outline different strategies on how we should be responding internally, the ways in which we can use this crisis as an opportunity to do things here inside our own country. All of that stuff, I think, is reasonable and fair game. But our national sovereignty really has been called into question. It's astonishing to say that, but it's true. And so there is a very strong rallying around the flag on this core issue, and I think that will continue. Having said that, Gideon, you know what I have built my own leadership campaign around, and a case that I would prosecute in a general election is putting myself forward to Canadians as the person in this moment who is best positioned to stand for Canada and to fight for Canada, by virtue of having done it before and having done it successfully, by virtue of having effectively worked with the premiers of provinces and territories, both during the NAFTA negotiations and in our response to Covid, and by virtue of having, through my time as foreign minister, through my time as a journalist, a recognition of the international stakes here and an ability to build international alliances. So that is definitely an argument that I have been making with Canadians in our internal leadership contest and an argument that I'll continue to make in a general election and a reason that I really do think I am the Liberal leader who can win in a general election.

[Interviewer]

Trump doesn't like you much, though, does he?

[Christia Freeland]

No, he's been clear about that. I see that as quite a strong recommendation. And the president's actions, very hostile, threatening actions towards Canada, I think show even more that the leader Canadians need is someone who the president doesn't want to see doing that job. So I see that as a backhanded compliment. And what I'll also say about the president is what I have observed, including at very close quarters, is what he actually admires is strength. Yes, he can sense weakness, and where he senses weakness, he takes advantage of it and pushes as hard as he can. But if you look at who he admires and who he actually develops effective relationships with, it is leaders and countries that show strength. During the NAFTA negotiations, he used to call me the killer. I thought he meant that positively.

[Interviewer]

Okay. Well, but unfortunately, I mean, if he has an instinct for weakness and strength, and that does seem to be the case. I mean, objectively. And I do understand the rally around the flag effect at the beginning of this conflict, but as it wears on, the fact is, I think 17% of America's exports comes from Canada. That's not inconsiderable. But 75% of Canadian exports go to the U.S. so there is an asymmetry. So isn't it likely that in the end you'll crack first?

[Christia Freeland]

Absolutely not. And I can give you real life evidence of that, Gideon, and that is sort of. While we were wrapping up the NAFTA negotiations, we had a dispute around steel and aluminum, the 232 steel and aluminum tariffs that were levied against Canada and many other countries. I was foreign minister responsible for the Canada US Relationship at the time. We did retaliate when the US Put those tariffs on Canadian steel and aluminum. A dollar for dollar retaliation. And eventually the US Unilaterally lifted the tariffs and they provided Canada and Mexico with preferential treatment relative to the rest of the world. In my view, that was entirely because of the impact of our retaliation. Canada, uniquely in the world, actually does have economic leverage over the United States. We are the largest export market for the US Larger than China, Japan, the UK And France combined. And we will use that strength and that will make a difference. Now, you're right. They have leverage over us, too. But that's where the asymmetry of importance comes in. We definitely are not going to stand down.

[Interviewer]

Do you think Canadians, though, have tough times ahead? I mean, are people going to really feel this?

[Christia Freeland]

Maybe this could be really challenging. I think we need to constantly hope for and offer off ramps to the United States. We're already seeing that. One of the President's favorite barometers of his own success. The stock market is reacting adversely to. To the tariffs and the positive here. And I don't want to sound like a Pollyanna, this is a bad situation. It is utter madness what the US Administration is doing. But one of the positives here is the fundamental reality that the Canada U.S. relationship is mutually beneficial. There aren't big problems that need to be solved. And so I think that we as a country need to stand strong. We need to be united, strong and smart. And part of being smart is constantly offer off ramps, constantly make clear not only to the administration but to regular Americans. This doesn't need to be happening. You don't need to be paying more for gas when you fill up your pickup truck. Which Americans are going to start to do. You don't need to pay more for your groceries. Which Americans are going to start to do. If you work for a company that exports to Canada, you don't need to lose your job. Which Americans are going to start to do. So, yeah, it could be tough, but it is also possible that Americans broadly see reasons that a graceful exit ramp is found. And that's going to be what we're going to work towards as well.

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[Interviewer]

You said that you have an ability, because of your background, to understand this in the international context. And in the international context, I mean, what does this mean for the Western Alliance? That two NATO members are coming to economic blows?

[Christia Freeland]

Well, Gideon, your question contains its own answer. Right. I know and believe that what is happening right now between Canada and the United States has the potential to be a pivotal moment, a hinge moment for the world. This is a moment when the whole rules based international order, which we collectively constructed after the Second World War, is really directly being attacked. Canada was a leading country in building that order. But precisely as you say, this action by the United States calls into question the whole idea of a trade agreement. This action by the United States against a NATO and NORAD ally does call into question the validity of military alliances. So that's pretty much it when it comes to the rules based international order, right? You have your economic rules, you have your sovereignty rules, you have your military alliances. And that's why it is going to be very important for the world to pay attention to what is happening for, I would say, first and foremost, our immediate partners to be working together with them. It's very important for Canada to be working together with Mexico, to be working together with Denmark, whose sovereignty has been directly challenged to work together with Panama. If I become leader of the Liberal Party and Prime Minister, one of the first things I'll do is convene a summit of the leaders of Mexico, Denmark and Panama. I'd like to invite the President of the European Commission. I'd like to invite Mark Rutte the Secretary General of NATO to get together our closest allies and partners and to work on ways that we can work together to defend this rules based international order, which for sure has its flaws, but has given so many of us since the Second World War a degree of peace and prosperity that no human beings in world history up until that moment had previously enjoyed.

[Interviewer]

Finally, you've been a very strong advocate for Ukraine and I can't help but see some analogies between Ukraine's situation and Canada's in the sense that you have a large neighbor threatening your sovereignty. Obviously Ukraine is fighting and dying. Canada is not, and one hopes will never be in that situation. But do you see any analogy between the way that America's threatening Canada and the way that Russia threatened Ukraine?

[Christia Freeland]

I would be careful with that analogy, Gideon, as you have just been Ukrainians are fighting and dying every single day. Russia is committing war crimes and we are now seeing the full scale Russian invasion of Ukraine. But Russia began invading Ukraine a decade ago, so that is a true brutal illegal action. And the Ukrainians are very courageously defending their sovereignty, defending the rules based international order, and defending democracy. So I would not even come close to comparing Canada's really wonderful patriotism to the strength and courage Ukrainians are showing. But let me say this, I am inspired by the Ukrainians. I think all freedom loving people in the world should be and we need to support them because that is a truly pivotal battlefield for us all. We need to be grateful to them for doing such a good job of standing up for themselves and for all of us. And I certainly think all of us can and should be inspired by them. I sure am.

[Gideon Rachman]

That was Christopher Ian, the former former Deputy Prime Minister of Canada and candidate for the leadership of the Liberal Party, ending this edition of the Rackman Review. Thanks for listening. Please join me again next week.

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