Trump’s second term is a wake-up call: Canada can no longer afford to assume U.S. stability or goodwill. Strengthening Indo-Pacific ties is critical, but without a clearer strategy, deeper engagement, and a visible presence, Canada risks remaining an afterthought in the region.
Canada, like much of the world, anticipated a transactional and volatile ‘Trump 2.0’ administration. Even so, the ‘shock and awe’ nature of his first month back as U.S. president has been staggeringly disruptive. Domestically, Trump has sown chaos and pushed past institutional constraints. Internationally, he has taken significant steps towards upending the political and economic global order that has defined the last seven decades.
To great dismay, Canada — long the U.S.’s closest friend and ally — was among Trump’s first targets. After a brief reprieve, Trump followed through on a campaign promise to impose 25 per cent tariffs on most Canadian goods, a move Trudeau argued was intended to trigger “a total collapse of the Canadian economy” that makes it easier for the U.S. “to annex Canada.” Though some of the tariffs have again been “paused” and others scaled back, their imposition and lingering threat have shattered confidence in the long-term viability of a deeply integrated cross-border economy. In short, the damage is done.
For Canada, this attack marks the culmination of a protracted ‘waking up’ to a new reality. For generations, Canada saw itself as blessed by geography, shielded from grievous threats by vast oceans on three sides, and a friendly superpower to the south. That sense of security has steadily eroded in recent years as new threats have emerged; Trump 2.0 brings it to an abrupt conclusion.
In the near term, Canada has little choice but to balance concessions and retaliation in a bid to buy time and avoid economic calamity. The longer-term response, by contrast, must recognize that this is a historical turning point that calls for fundamental changes to reduce Canada’s heavy dependence on the U.S. for economic prosperity and security.
Even before Trump 2.0, the importance of diversification was clear. Canada’s 2022 Indo-Pacific Strategy (IPS) was intended to facilitate that end by strengthening ties to a region that is home to two-thirds of the world’s population and drives much of its economic growth. Despite ongoing tensions with China and India, Canada has made tangible progress since the strategy’s launch, particularly in Southeast Asia.
Trump’s America adds urgency to accelerating that progress, but its disruptions to global relationships, norms, and institutions also create new complications for Canada, including in Asia. In short, as at home, Canada faces a moment of reckoning with shifting global realities. Several key dynamics warrant closer attention.
The bandwidth challenge is well-known but remains critical. With 40 million people, Canada is not a large country by population. Its modestly sized foreign service is already stretched thin, and its private sector remains deeply intertwined with the U.S., limiting capacity for expansion. The existential threat posed by Trump’s America naturally consumes the bulk of Canada’s attention, further constraining its ability to cultivate emerging partnerships in Asia.
The practical implications of the bandwidth challenge cannot be overstated. For example, Southeast Asia’s 11 countries are highly diverse, requiring nuanced understandings of their distinct opportunities and challenges if Canada is to fully realize their potential as strategic and economic partners. Success in the region also depends on sustained personal ties, which demand a consistent Canadian presence. Acknowledging this is easy, following through is harder: Canada simply lacks the capacity to be meaningfully present everywhere. The inevitable conclusion is that if Canada’s Indo-Pacific ambitions are to succeed, the region must be treated as a genuine priority.
Beyond attention, Canada’s resources also face mounting pressures. Most notably, the potential retreat of the U.S. security umbrella creates an urgent need for greater defence investment. The push to accelerate NATO’s two per cent defence spending target only adds to this strain. Given the scale of required investments, funding will almost certainly be diverted from other areas — including diplomatic outreach efforts — to meet these demands. A significant economic downturn would further compound this challenge.
Canada’s positioning in Asia presents a related and equally complex challenge. Trump demands loyalty not only to himself but to his worldview and priorities, pressuring allies to align with the U.S. on key issues. This is not entirely new: parts of the IPS already reflect strong U.S. influence. But as Trump reshapes America’s global role, the costs and consequences of real or perceived alignment with the U.S. shift as well.
On China, aligning with Trump’s hawkish stance may appeal to some Asian partners — most notably Japan and Taiwan — that perceive China primarily as an adversary. But that is not the universal view across the Indo-Pacific. For many states, China presents both challenges and indispensable opportunities. While they do not wish to be dominated by China, they do not see it as an unconditional adversary that must be contained or isolated. With the possible exception of the Philippines, that certainly holds true across Southeast Asia.
We must remember that the U.S. has not always been inherently liked in Asia, so much as it has been respected and welcomed for the critical role it has played in supporting development and providing security assurances. Now, there is a real possibility that it will systematically retreat from those roles. Moreover, as the Trump administration continues to project disdain for all things foreign, parts of Asia will likely respond with growing hesitation — if not outright animosity — toward the U.S.
This creates a difficult bind. Particularly for Canada, the U.S. remains too big to ignore and too important to seamlessly replace through alternative partnerships. That leaves Canada with little choice but to maintain a constructive relationship with its southern neighbour, making key concessions as necessary. Simultaneously, the cost of being seen as an aide-de-camp to the U.S. has never been higher and will only rise if an unrestrained Trump grows more disruptive. Even fairly neutral terms associated with U.S. power — “like-minded,” for example — will provoke skepticism among some transpacific partners. In any case, beyond optics, Trump’s transactional and extortionist approach to foreign policy diminishes the substantive alignment between U.S. and Canadian objectives.
Canada will need to navigate this difficult squeeze, strengthening an autonomous identity and formulating distinct priorities, while also avoiding steps that deteriorate its relationship with the U.S. Fortunately, global uncertainty has generated immense interest in Canada. Part of this stems from the hope that Canada’s ‘front-line’ perspective can help others make sense of U.S. volatility. For better or worse, proximity does little to transform chaos into clarity, but even if Canada cannot serve as the world’s U.S. interpreter, its views and experiences make it an invaluable discussion partner as countries in Asia seek to understand global change and recalibrate their strategic directions. That likely means being offered a seat at the table more regularly, which Canada should take up whenever feasible.
This moment of transition raises important practical considerations, the first being visibility. Brand Canada is generally well-regarded in Asia: it carries relatively little of the baggage associated with other Western countries, and there is ample collective memory of Canada’s past contributions, particularly in development and conflict mediation in Southeast Asia. However, Canada has also gained an unfortunate reputation as a fair-weather friend, prone to retreat when its domestic political winds shift. Needless to say, accessing opportunities across the Indo-Pacific requires staying the course through this period of transition at home and abroad. But Canada must also re-examine its existing efforts. During a recent trip to the Philippines, for example, I was struck by how many Filipinos recognized Telus — a significant employer in Manila — yet assumed it was an American company (Tel-US).
The anecdote highlights a key issue: much of Canada’s engagement in the Indo-Pacific is not easily recognized as Canadian, a challenge compounded by its historic preference for working through multilateral platforms and global institutions, where national origins are often obscured. As the image of Team North America deteriorates, the time is ripe to more deliberately foreground Team Canada. While the private sector operates independently, it can still be encouraged to engage in some basic ‘national service’ — co-ordinated by the business councils and chambers of commerce — by more visibly flying the flag.
The second issue concerns how Canada presents its brand, particularly around values. There is a joke that U.S. security assurances have allowed Canada to sometimes act more like an NGO than a traditional state in its foreign engagements. Indeed, Canada is known for its values-driven approach to foreign policy, which has paid dividends, but has also contributed to Canada’s reputation for being sometimes ‘difficult’ and disconnected from local realities. Canada should not abandon its values in its pursuit of stronger partnerships, especially as many countries slide toward a race to the bottom. But without the U.S. security guarantees and market access it once took for granted, Canada faces a new reality that calls for a pragmatic recalibration of how it balances values and strategic needs.
We are in a transitional moment that upends many long-held assumptions underlying Canada’s foreign policy. Difficult decisions lie ahead. As they approach, it is important to foreground a core fact articulated in the IPS: the Indo-Pacific is “rapidly becoming the global centre of economic dynamism and strategic challenge.” As a Pacific nation, Canada is well-positioned to play a greater role in this shift, and momentum is already building to make that happen.
Ultimately, transitional moments demand more than just doing things differently. If Asia is to be a meaningful part of Canada’s diversification and global engagement, Canada must craft a refreshed narrative — one that is more than just a collection of new initiatives. It needs a coherent story that clearly defines who Canada is, how Asia fits into its worldview, and what its core interests across the Indo-Pacific mean in practical terms. A paradigmatic shift of this kind is daunting. But few things can focus the mind and transform perspectives like a crisis.
• Edited by Erin Williams, Senior Program Manager, and Vina Nadjibulla, Vice-President Research & Strategy, and Ted Fraser, Senior Editor, APF Canada.
