In March 2016, then-president Barack Obama greeted Canadian Prime Minister Justin Trudeau at the White House and remarked on the unique relationship between the United States and Canada. Addressing the crowd of reporters, the 44th president was quoted as saying:
“It has long been said that you can choose your friends, but you cannot choose your neighbours. Well, by virtue of geography, the United States and Canada are blessed to be neighbours. And by choice, we are steadfast allies and the closest of friends.” (1)
The relationship between these two sister nations was put to the test following the surprising election of Donald Trump in November of that year. While Trump had campaigned on being “tough on China” in terms of trade, his protectionism and isolationism extended towards some of the strongest allies of the United States by slapping tariffs on Canada, Mexico, and the EU in 2018 (2). With more than $2 billion (USD) worth of goods crossing the US-Canada border every day, the tariffs have had a strong impact on US-Canada trade relations and, by extension, diplomatic relations (3). Similarly, the treatment of the US-EU alliance in terms of security has also had a substantial impact on diplomatic relations during the first Trump presidency. Given that the US provides so much aid for European security and the fact that there is currently an ongoing conflict in Europe, the US and EU should be working to strengthen ties. Along with Canada and the EU, the once-and-future president Trump will put the US-UK “special relationship” to the test.
Canada and the EU signed the Comprehensive Economic and Trade Agreement (CETA) in October 2016, before Trump was elected to his first term, let alone applying tariffs (4). While trade has increased between the EU and Canada since the agreements implementation in 2017, with a steady increase until the COVID-19 pandemic in 2020, EU imports from Canada have yet to return to pre-COVID levels (5). In contrast, the US has seen an economic recovery from COVID-19 surpass that of other G10 countries (6). Since leaving the EU, the UK has signed a bilateral trade agreement with Canada, dubbed the UK-Canada Trade Continuity Agreement (TCA), which operates under the same terms as CETA (7).
Traditionally, the closest of allies, the incoming Trump administration and the new Labour government, are already off to a strained diplomatic start due to comments made by cabinet ministers (8). The two leaders also have differing views on trade and security, with Trump vowing 20% tariffs and pulling out aid to Ukraine (8).
With a second Trump presidency, the current global structure is expected to be shaken. The incoming presidents foreign policy agenda, including trade and security, would have drastic effects on Americas largest trading partner, Canada, their most prominent ally, the UK, and the future of European defence. This article will first address the expected impact of Trumps policies on Canada, the UK, and the EU and will be followed by a summary of how each of these jurisdictions can lessen the impact including strengthening existing alliances and creating new bilateral and multilateral agreements to address both national and global interests such as trade, security, and climate change.
Expected Impact
Trumps proposed Tariffs would have a substantial impact not only on the US economy but on the global economy. One study has projected the EUs GDP shrinking by up to 1.5% (€260 billion), the weakening of the Euro, and warns of the risk of a recession (9). In the UK, exports would decrease by £22 billion (10). The UK is not expected to see any drastic long-term inflation trends from any potential tariffs as the US only makes up about 10% of UK imports (11). However, the risk of a global trade war would undoubtedly affect the UK economy, with some calling for “coordination” with the EU, the UKs largest trade partner (11).
The largest trade partner of the US, Canada, would expect to see a decrease in GDP by 2.5% by early 2026 and enter a recession with inflation reaching as high as 7.2% by mid-2025 and unemployment jumping to 7.9% by the end of 2025 (12). Experts also warn that a full-on trade war could see the global economy shrink by up to 7% (13).
Threats by Trump to cut funding to NATO would also drastically affect European security in a time of war. With Trump threatening the transatlantic alliance, it will be up to other nations to step forward. There has been discussion of two possible paths forward for the EU in terms of security. One is a “coalition of the willing” led by the UK, France, Germany, and Poland (14). The other is a proposed string of bilateral agreements between European states (14). While only time will tell which path Europe will choose, strengthening alliances will be the best course of action.
With Trump vowing to once again withdraw from the Paris climate agreement, this would have increasing negative effects on the climate at a time when we are only beginning to see some of the worsening results of climate change (15). With one of the worlds largest polluters stepping aside from the fight against climate change, it could leave other nations uncertain on how to proceed without the leadership of the US (15). Similarly, Trump has been vocal about leaving the United Nations Framework Convention on Climate Change (UNFCCC) (16). While scholars are divided on whether or not Trump could go through with this withdrawal, it once again weakened the US position as a leader in global initiatives and combating global challenges (17). Increases in climate change have also led to challenges in climate security which can be defined as, “the impacts of the climate crisis on peace and security, particularly in fragile and conflict-affected settings.”(18) According to the United Nations Development Programme (UNDP) “the impacts of climate change can aggravate or prolong it, making it more difficult to reach and sustain peace.”(18).
With the risk of a global recession, threats to security in Europe, and worsening impacts of climate change, other democratic countries would be forced to step up in the absence of American leadership. To achieve stability and safety in the face of American isolationism and protectionism, current alliances such as CETA would need to be strengthened. Rather than the leadership of a single nation, alliances could ascend to global leadership positions.
Responses
In response to the United States, the most powerful military and economy in the world, practising an isolationist foreign policy while there are current conflicts, economic recovery from the COVID-19 pandemic, and global issues such as climate change, other powers will not only need to step up their roles but strengthen current alliances. According to a 2024 estimate by the International Monetary Fund (IMF), the United States currently possesses a GDP of about $29 trillion (USD) (19). Comparatively, the United Kingdom, Canada, and the EU possess a combined GDP of about $25 trillion (USD) (19). Furthermore, the GDP based on purchasing power parity (PPP) of the US is roughly $29 trillion (USD), while the combined GDP (PPP) of the UK, Canada, and EU is roughly $35 trillion (USD) (20). This gives some economic room for global initiatives such as tackling climate change or world security. Given the global nature of these issues, it would be expected that other democratic allies would want to strengthen their ties in the event of US isolationism. Countries in the Pacific, such as Japan, South Korea, Australia, or New Zealand, would likely be keen to join a newfound alliance to protect their trade and security interests. Renegotiating international trade and diplomatic relations also allows for addressing issues such as the immigration of skilled workers between these states and strengthens the protection of workers rights.
Without the aid of the US in addressing global security, there would certainly be a transition period. However, if other countries were to strengthen existing trade relations, such as CETA or any bilateral trade agreements, by adding in new signatories to increase trade flow, this could lessen the risk of global recession and weakening of currencies. Similarly, countries could revamp existing military alliances with the US, such as NATO or AUKUS, and the effects on the current liberal international order could be dampened. An agreement is similar to AUKUS between Canada, the UK, and the EU to ensure the continuation of transatlantic security. While this is essentially the mandate of NATO, Trumps comments about other NATO members and their spending put the future of the alliance into uncertainty at a time when stability is in short supply.
Regarding climate change, though the United States is one of the largest polluters, it is not the only one. The absence of the United States in global climate agreements should not deter the participation of other nations. On the contrary, it should encourage the increased global cooperation required for such a task. A world in the absence of American leadership may be difficult to navigate, but through cooperation with bilateral and multilateral agreements, work can be done to provide stability through a group leadership initiative between the EU, UK and Canada.
Policy Proposals:
References
Jacob is a recent graduate from the University of Leeds, where he completed a Masters in Political Science. He also volunteers for political and charitable organisations in his local community.
Madeline was our Deputy Director (Internal) and now works at the National Audit Office as an Audit Associate. She previously worked as a Political Researcher at Animal Think Tank and holds a degree in Economics, Politics, and International Relations from Lancaster University.
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