Freeland Says Canada’s Trump Strategy Relied on Refusing to Capitulate and Hitting U.S. Pressure Points

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Chrystia Freeland is offering a detailed look back at one of the most consequential trade fights in modern Canadian history, arguing that Ottawa’s approach to Donald Trump worked because Canada resisted pressure to concede quickly and looked for leverage beyond the White House. In a September 29 account of the first Trump administration’s NAFTA negotiations, the former foreign affairs minister describes a three-part strategy: cooperate where interests overlapped, build relationships throughout the United States, and refuse to capitulate when Washington applied pressure.

The historical record shows that Canada did combine negotiations with unusually large retaliatory tariffs and an extensive political outreach campaign. It also shows a more complicated outcome than a simple victory: Canada preserved important parts of continental free trade, but accepted significant changes and endured considerable economic uncertainty along the way.

Freeland Describes a Three-Part Strategy for Dealing With Trump

Freeland’s latest account presents the Canadian strategy as more disciplined than confrontational. The first element was finding areas in which Canada and the Trump administration could reach agreement. The second was what Canadian negotiators called the “doughnut strategy”: recognizing that the president occupied the centre of American political power but that governors, members of Congress, businesses, unions and ordinary voters surrounding that centre could also influence policy. The third element, which Freeland now describes as the most important, was refusing to capitulate when threats or deadlines intensified. She made essentially the same argument during a PBS interview in June 2026, saying countries should seek common ground without responding to pressure by automatically giving way.

That description is Freeland’s interpretation of events rather than an objective formula guaranteeing success. She is also no longer speaking on behalf of the Canadian government. Freeland resigned from Parliament in early 2026 after holding senior positions including foreign affairs, finance and deputy prime minister, and her September essay was adapted from her forthcoming political memoir, Unreliable Boyfriend. That distinction matters because her comments are partly a retrospective argument about how Canada handled Trump’s first administration and partly advice about dealing with his second. The underlying events can be verified independently, but conclusions about why particular tactics succeeded remain open to debate.

Canada Began Preparing Before Trump Entered the White House

One striking part of Freeland’s recollection is that Ottawa did not begin planning only after Trump won the 2016 election. She writes that Canadian officials had already been warned during the campaign that a Trump victory was possible and that trade officials prepared an emergency briefing on how Canada should respond if his threats against NAFTA became government policy. That preparation mattered because Trump had repeatedly criticized existing North American trade arrangements and entered office seeking major changes to the agreement that had governed continental commerce since 1994. Freeland says the advance work allowed Canada to move quickly from surprise at the election result to an organized negotiating strategy.

The subsequent Canadian effort became much broader than the formal negotiating table. Government records show that, beginning in January 2016, the wider “Team Canada” campaign made more than 300 visits to the United States and more than 500 contacts with American officials. Those contacts included the president and vice-president, 16 U.S. Cabinet members, more than 310 members of Congress, and 60 governors and lieutenant governors. The scale illustrates what Freeland means by working around the centre of the political system: Ottawa was trying to make the Canada-U.S. economic relationship relevant to American officials whose states, districts and industries depended on cross-border commerce.

The “Doughnut Strategy” Turned U.S. Economic Ties Into Political Leverage

Canada had substantial material for that outreach campaign because the trade relationship touched nearly every part of the United States. Government data from the period showed Canada was among the three largest merchandise export markets for 47 U.S. states in 2017, while American merchandise exports to Canada exceeded US$282 billion that year. Canadian officials repeatedly carried state-specific trade figures into meetings with governors, senators, representatives, business organizations and labour groups, emphasizing that a breakdown in continental trade would not be confined to Ottawa or Washington.

That approach was visible in the travel schedule of Canadian officials. Freeland met U.S. lawmakers from states including Kansas, South Carolina, Arizona, Tennessee, Nebraska, Iowa and Massachusetts, while other ministers attended gatherings such as the National Governors Association meeting. The objective was straightforward: make politicians outside the White House hear directly from Canada while encouraging American businesses and workers to calculate what disrupted trade could mean locally. Freeland’s description of a “doughnut” is therefore more than a memorable metaphor. Contemporary government records show an unusually extensive campaign designed to surround the formal trade negotiations with relationships across the American political and commercial system.

Steel and Aluminum Became the Biggest Test of Canada’s Refusal to Back Down

The strategy faced its clearest test in the spring of 2018. On May 31, the United States announced tariffs of 25 per cent on certain Canadian steel products and 10 per cent on aluminum. The measures were imposed under the U.S. Section 232 national-security authority. Canada rejected the national-security rationale and challenged the measures through trade-dispute mechanisms, while the Trump administration defended its use of Section 232. Ottawa simultaneously announced that it would respond with tariffs of comparable value rather than simply continue negotiations while absorbing the U.S. duties.

The Canadian countermeasures took effect July 1, 2018, covering approximately C$16.6 billion of steel, aluminum and other U.S. imports—the estimated value of affected Canadian exports in 2017. Some goods faced a 25 per cent surtax and others 10 per cent. At the time, Freeland described the response as dollar-for-dollar retaliation, and government officials characterized it as Canada’s strongest trade action since the Second World War. Ottawa also made up to C$2 billion available in support and adjustment measures for industries and workers exposed to the dispute, demonstrating that retaliation itself carried domestic risks that the government expected to manage.

Ottawa Chose Products That Could Create Pressure Inside the United States

The composition of the retaliation was as politically important as its size. Canada’s tariff list included items such as whisky, orange juice, ketchup, strawberry jam, yogurt and playing cards in addition to steel and aluminum. Freeland now says the government intentionally selected some products based on where they were produced, seeking to create economic pressure in politically influential states. She cites Kentucky-related whisky and playing cards, along with products associated with Pennsylvania, Ohio and Wisconsin, as examples of an attempt to make American political leaders feel the consequences of the trade dispute at home. The official tariff schedule independently confirms that those categories were included.

Academic research supports the broader proposition that the 2018 retaliation by U.S. trading partners was politically targeted. A study published in The Economic Journal found that retaliatory tariffs from Canada, Mexico, China and the European Union disproportionately exposed areas that had shifted toward Trump in the 2016 presidential election. Other research found that Canada was among the retaliating jurisdictions that selected products connected to politically important locations. The evidence does not establish that Canadian tariffs alone forced Washington to compromise, and one study concluded Canada could theoretically have designed an even more politically targeted package. It does, however, support Freeland’s claim that pressure-point targeting was a genuine feature of the strategy.

Canada Was Taking a Bigger Relative Risk Than the United States

Retaliation sounded symmetrical when expressed dollar for dollar, but the two countries were not equally exposed to a prolonged trade confrontation. In 2018, Canada sent C$499 billion in goods and services to the United States, representing about 71 per cent of its total exports. Canada imported roughly C$470 billion from the United States. That dependence meant even a relatively narrow trade fight could create significant uncertainty for Canadian manufacturers, exporters and investors that had built their business models around predictable access to the American market.

The Bank of Canada documented those effects while the negotiations were unfolding. In September 2018, the central bank reported that businesses were delaying or reconsidering investment because of trade uncertainty, with some firms examining whether new capacity should be located in the United States instead. By December, the Bank said business investment had unexpectedly declined during the third quarter and that uncertainty surrounding NAFTA appeared to have been particularly powerful during the summer. That evidence puts Freeland’s “do not capitulate” message in economic context: holding out was not costless. Ottawa was betting that maintaining negotiating leverage would eventually be more valuable than eliminating short-term uncertainty through an earlier agreement.

Canada Also Looked for Areas Where Trump’s Demands Overlapped With Its Interests

Resistance was only one side of the strategy. Freeland argues that Canadian negotiators also looked for U.S. proposals that could be reshaped into something Ottawa could support. Her main example involves the auto industry. Rather than accepting a U.S. proposal that would have imposed a large U.S.-specific content requirement, Canada supported rules tying part of a vehicle’s eligibility for preferential treatment to production in higher-wage facilities. The eventual agreement required 40 per cent of passenger-car manufacturing value and 45 per cent for light trucks to satisfy labour-value rules involving production wages of at least US$16 an hour.

CUSMA also increased the regional-content requirement for passenger vehicles and light trucks to 75 per cent, up from 62.5 per cent under NAFTA, and added requirements relating to North American steel, aluminum and core auto components. Those changes reflected an area where the three countries could reach a compromise around keeping more manufacturing within North America, even though each government emphasized different potential benefits. The labour provisions were also strengthened and made enforceable within the agreement. This part of the outcome fits the first component of Freeland’s playbook: opposing demands Ottawa considered unacceptable while identifying concerns—such as low-wage competition in manufacturing—that could produce negotiated changes.

The Final Trade Deal Included Canadian Wins and Significant Concessions

Freeland portrays the eventual agreement as proof that resisting the most aggressive U.S. demands could produce a workable deal. Canada did preserve several priorities. The final CUSMA maintained the binational mechanism used to review anti-dumping and countervailing-duty decisions, which had been Chapter 19 under NAFTA, and retained a cultural exemption. Canada also avoided the proposed requirement that half of a vehicle’s content be specifically American and avoided an automatic five-year termination clause of the type Washington initially sought. The agreement instead established a longer review-and-renewal framework.

But the agreement was not a restoration of the old NAFTA without concessions. Canada granted additional U.S. access to its supply-managed dairy market, estimated by the federal government at approximately 3.59 per cent of Canadian dairy production, and agreed to changes affecting milk classes and certain dairy exports. The automotive rules became more demanding, and other areas of the agreement were modernized or revised. That mixed record is important when assessing claims of victory or capitulation. Canada rejected some U.S. demands, accepted others, and negotiated compromises on still others—a normal characteristic of major trade negotiations even when the political rhetoric surrounding them suggests a clearer winner and loser.

The Steel and Aluminum Tariffs Were Eventually Removed

The separate steel and aluminum confrontation continued after the new North American trade agreement was negotiated. On May 17, 2019, Canada and the United States announced an understanding under which Washington would remove its Section 232 tariffs on Canadian steel and aluminum and Canada would eliminate its retaliatory tariffs. The measures were removed shortly afterward. For Freeland, that sequence supports the argument that Canada had not needed to accept permanent U.S. metals tariffs as the price of preserving the broader economic relationship.

The agreement to remove them nevertheless contained safeguards rather than simply returning to the previous system without conditions. Canada and the United States agreed to measures aimed at preventing subsidized or dumped metal from being transshipped through either country and established a process for monitoring trade. If imports surged meaningfully beyond historical volumes, the arrangement allowed duties of 25 per cent on steel or 10 per cent on aluminum to be imposed on affected products after consultations, while limiting corresponding retaliation to the affected sector. In other words, the dispute ended through another negotiated compromise rather than an unconditional withdrawal by either government.

Research Shows Why Pressure-Point Tariffs Matter — and Why They Are Dangerous

Freeland’s theory depends on a basic political-economy idea: a tariff can have modest consequences for an enormous national economy while inflicting much greater pain on a concentrated industry, town or constituency. Research on the 2018 trade war supports that mechanism. Economists Pablo Fajgelbaum, Pinelopi Goldberg, Patrick Kennedy and Amit Khandelwal found that foreign retaliation disproportionately affected sectors located in heavily Republican counties. Separate research examining elections concluded that Republican candidates lost support in counties more heavily exposed to retaliatory tariffs, particularly where agriculture was affected.

Yet those same studies undermine any suggestion that tariffs represent a painless negotiating weapon. Research by Mary Amiti, Stephen Redding and David Weinstein found essentially complete pass-through of the 2018 U.S. tariffs into domestic prices of imported goods and estimated a substantial reduction in U.S. real income. The authors observed similar welfare effects in countries that retaliated. Canada itself later granted targeted relief to companies struggling with shortages or contractual dependence on tariffed American inputs. Pressure-point retaliation can therefore create leverage precisely because it creates costs—but some of those costs inevitably land on businesses and consumers in the country imposing the retaliation as well.

Freeland’s Broader Lesson Is About Leverage, Not Permanent Confrontation

Freeland’s 2026 argument is ultimately broader than the details of NAFTA. She maintains that countries dealing with the Trump administration should combine cooperation with political outreach and credible resistance, rather than treating every American demand as something that must be accepted to preserve access to the U.S. market. In both her June PBS interview and her September essay, she specifically distinguishes strength from constant escalation: the objective, in her telling, is to demonstrate that pressure carries consequences while keeping open the possibility of negotiation and agreement.

The historical evidence supports several pieces of that account. Canada did conduct an extensive U.S. outreach campaign, did impose C$16.6 billion of retaliatory tariffs, did politically target parts of its retaliation, ultimately signed a revised continental trade agreement and later saw the 2018 metals tariffs removed. What cannot be established with equal certainty is a simple causal claim that refusing to capitulate, by itself, produced those outcomes. Trade negotiations involved congressional pressure, American industries, Mexican negotiations, economic costs and compromises among all three governments. Freeland’s account is therefore most useful as an insider explanation of Canada’s strategic thinking—not as proof that the same playbook will generate the same result in every future confrontation.

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