Former Canadian ambassador to the U.S., David MacNaughton, attends a news conference at the Embassy of Canada in Washington, on June 13, 2019.J. Scott Applewhite/The Associated Press
As ambassador to the United States from 2016 to 2019, David MacNaughton played a crucial role in Canada’s response to Donald Trump’s presidency.
This involved renegotiating NAFTA, pushing back against tariffs on Canadian steel and aluminum, and working with state governors, members of Congress and business leaders to pitch a protectionist White House on the benefits of trade.
The Globe and Mail spoke with Mr. MacNaughton about the U.S. election, how Mr. Trump and his opponent, Vice-President Kamala Harris, might approach Canada and how Ottawa should address rising protectionism in both the Republican and Democratic parties.
What’s at stake for Canada’s economy in the upcoming U.S. election?
Both the Democrats and the Republicans over the last several years have become more protectionist. And given the fact that well in excess of 70 per cent of our exports go to the United States, any form of increased protectionism or thickening of the border or tariffs is going to have a big impact on our economy.
Who poses the bigger risk to Canadian trade, Mr. Trump or Ms. Harris?
Trump is very transactional. He said he was going to rip up NAFTA. We were able to create a new trade deal. Harris voted against the new deal and I think is very much appealing to organized labour during the campaign.
So they’re quite different. She’s sort of ideologically a protectionist, and he’s just who he is – it’s all sort of a transaction that he needs to be seen to win. The fact of the matter is that the agreement that we have that’s in place [the USMCA] was one that he and his team negotiated. So it’s hard for him to say it’s a terrible deal.
The reality is that if we are going to maintain our current beneficial trading relationship with the United States, we’re going to have to focus in on the things that they think are most important, which, in addition to trade, are security, defence, fentanyl, migration and all of those things.
The idea is if we play along on other files, they’ll give us a lighter ride on trade issues?
When Trump imposed the steel and aluminum tariffs, under the guise that they were a national-security threat, apart from focusing in on some of the mutual benefits, we also spent a fair bit of time talking to the security and defence people. We said, “You say Canada’s imports of steel and aluminum are a national-security threat. Seriously? Do you really want to do that?” And I think at the end of the day those tariffs were removed in large part because of pressure from the U.S. military and security people.
Both Trump and Harris say they’ll reopen the USMCA when it comes up for review in 2026. What will they be looking for?
They’re going to want to see that we are in lockstep with them in terms of any measures that are designed to prevent particularly Chinese things coming into the country, whether that’s steel or cars or whatever it is. If we weren’t matching what the United States is doing on electric vehicles and bringing in Chinese EVs that cost significantly less, it would be noticed for sure.
I’ve heard people argue that Trump’s threats of 10- to 20-per-cent tariffs might be overblown because we’re covered by the USMCA. Does this downplay the risk?
Is his tariff going to be a universal tariff? Or will it be universal for all those who in his mind behave badly? We’ll see. I mean, what is said on the campaign trail and what actually ends up being implemented are sometimes different.
There’s no question, though, that we’re living in an environment where you won’t get many politicians in the United States to stand up and say, “I believe in free trade,” or “I believe in the multilateral trading system that’s existed since the Second World War.”
We’ve got to be in a position to emphasize that we’re prepared to step up and be part of an integrated Fortress North America or Fortress Canada-U.S. or whatever it is. We’re going to have to demonstrate that we are going to do that – and we’re not going to take 30 years to get minerals out of the ground that they need for EVs or batteries.
Is this true whether Trump or Harris wins?
Obviously if Trump wins, there’s sort of more immediacy to the outreach. I think if Harris wins, she’s probably likely to follow the process of going to the [USMCA] review in 2026. I can’t imagine that Trump would wait, regardless of what the details of the agreement say. He’s going to be talking tariff, tariff, tariff right out of the starting gate.
What advice do you have for Canadian politicians and diplomats in the event Mr. Trump wins?
A lot of the relationships that we sort of built over the first Trump presidency have been maintained. People like Bob Lighthizer [the former U.S. trade representative] are obviously going to be key.
The thing that was hugely beneficial when we were doing NAFTA renegotiation and on the steel and aluminum tariff side was the collaboration with the provinces and with the private sector – call it “Team Canada” or whatever. I never had any problem reaching out to premiers or business leaders, either to get advice, to get information or to get assistance. I think that’s going to continue to be important.
Would a split Congress work in Canada’s favour?
The whole U.S. political class has moved more protectionist and isolationist. I would have said, “What you really need are the Rob Portmans [former Republican senator for Ohio] and all the internationalists on the Republican side.” But you can’t find very many of them any more.
Even when we were doing the NAFTA renegotiation, I used to meet with a very sizable group of Democrats who were free traders. Well, you could probably get them all into a phone booth, if there’s any such thing any more, and have room left over now.
What you can do with Congress is remind individual members where their districts have significant relationships with Canada. We don’t want to get into a full-scale trade war with the United States of America. That’s a loser for us. But on occasion, it is helpful to remind them, as I did with Mitch McConnell, about how much bourbon the LCBO buys.
This interview has been edited and condensed for length and clarity.