The US-Canada trade war demands expanded public ownership and Canada’s exit from the USMCA and NATO

The trade war with the United States is already causing devastation for workers across Canada. Despite doing the right thing and walking away from a bad deal on tariff negotiations, the response from the Carney government has been to make working people pay for the deepening trade war and to show a willingness to make profound concessions that will hurt working people. These concessions reportedly include adjustments to Canada’s dairy quota allocation formula, threatening supply management; ending provincial procurement policies that give preference to Canadian firms, meaning more public money will flow to U.S. corporations; and dropping retaliatory tariffs on American steel, aluminum, and autos, while leaving some level of U.S. tariffs in place. Furthermore, Carney continues to support the renewal of the US-Mexico-Canada free trade agreement (USMCA) which will continue to strip Canada of its manufacturing base and hundreds of thousands of well-paid permanent jobs, while profoundly undermining Canada’s sovereignty and independence.

The Communist Party of Canada rejects this approach. We call for a response to the trade war that puts workers first and builds genuine popular sovereignty, not the hollow “Captain Canada” posturing of a government that serves corporate interests.

However erratic, narcissistic and chauvinistic Trump may be, the shift in U.S.-Canada relations is not driven by his personality. The move from liberal “free trade” to protectionist tariffs is driven by the decline of U.S. imperialist hegemony and the connected global capitalist economic crisis. “Free trade” was never a capitalist moral principle, it is a tool used by the capitalist class when it serves their global interests. Today, U.S. calls for “fair trade” and “reciprocal tariffs” are simply euphemisms for using the country’s market size as political leverage to extract unilateral concessions. What does the U.S. government want? It wants to eliminate supply management and destroy the livelihoods of Canadian farmers. It wants to eliminate cultural protections, including for French language content, and remove the already insufficient taxes and regulations faced by U.S. tech monopolies. It wants to scrap procurement policies that create decent local jobs and force Canada to accelerate the privatization of public healthcare. It seeks to eliminate Canadian jobs in forestry, auto and steel. It demands Canada remain in lockstep with Washington as it escalates its economic war on China. The U.S. also seeks deepened integration of Canada’s military with its own, while demanding guaranteed access to Canada’s critical minerals and oil reserves to serve the U.S.-NATO war machine.

Pinning hopes on a new USMCA as a way out of the crisis is a recipe for more disaster. The reason why the Canadian economy is as susceptible to coercion in the form of tariffs is because of decades of free trade policies. The USMCA deal, like NAFTA before it, was never about fair trade. It was and is a corporate constitution designed to empower monopolies, pit workers against each other across borders, and systematically dismantle Canadian sovereignty. Corporate free trade is a race to the bottom which has already led to the deindustrialization of much of Canada’s manufacturing sector. The USMCA in particular has already proven to be bad for workers. Since it was signed in 2018, unemployment has climbed and the employment rate has fallen. In the last eight years, Canadian corporate profits have soared to record highs with profits outstripping real wage increases by nearly 600 percent. Even before Trump’s tariffs, the data showed a deal that delivered for corporations while leaving workers behind.

The Communist Party continues to call for the immediate withdrawal from the USMCA. We call on the labour and democratic movements, the NDP and Greens, to unite in mass opposition to the renewal of the USMCA, as they did in the leadup to the 1988 federal election. In that election, even the Liberals opposed free trade, with Liberal leader John Turner calling Tory leader Brian Mulroney “a sell‑out” for his shift from opposing free trade to supporting it. The tariff negotiations have exposed what the US will demand in the upcoming free trade negotiations. This agenda can be defeated with the united action of the labour and people’s movements demanding withdrawal from USMCA now.

One of the central points of disagreement between Canada and the U.S. appears to be that Washington wants to dictate who Canada trades with, effectively ending Canadian sovereignty over foreign policy. The Liberal government conceded much of this in the USMCA they signed in the first Trump administration. The “non-market economies” clause represented a concession to Trump’s neo-McCarthyism, binding Canada to U.S. aggression against China and whomever else Washington labels a “non-market economy”. The Carney government has also signaled it is comfortable with restrictions on trade with “non-market economies”. This is a massive erosion of sovereignty, and must be rolled back.

It is worth asking who will pay for this trade war. The Canadian parliament—dominated almost entirely by political representatives of monopoly corporations and led by a central banker, one of capitalism’s high planners—will ensure that the working class pays. Canada’s announced billions in retaliatory tariffs and aid packages to domestic industries come from the public taxation of working people. In both countries, capitalists fight for market share, while workers face layoffs, spiralling inflation, and stagnant wages. However, it is corporate Canada that has the ability to pay as corporate profits hit a record high of $677 billion in 2025. The reality is that we are not “all in this together”.

The federal government’s temporary EI measures are wholly inadequate. Waiving the one-week waiting period and providing extra benefits for long-tenured workers falls far short of what working people need. We need a real expansion of EI to cover all the unemployed for the full duration of unemployment and increase benefits so that earnings are at 90% of previous incomes to ensure workers can pay their mortgages or rent and feed their families.

The response to attacks on key industries is more bailouts. Over the past quarter-century, the working class has been forced to finance corporate monopolies that then cut jobs and outsource production. In the auto sector alone, this amounts to as high as $79 billion in corporate welfare. We need only look to last September’s $500 million in government aid to Algoma Steel for another example. In December, Algoma announced the layoffs of 1,000 workers and this year it was discovered that the CEO of Algoma received a massive increase in bonuses and stock-compensation to the tune of $5.75 million. These are public funds that could have built a stable, publicly owned and democratically controlled auto industry with well-paying union jobs. Instead, tariffs and free trade agreements have left us with closed plants, mass layoffs, and the departure of the auto industry from Canada to the U.S. within a few years.

As the tariff deal deadline was approaching, U.S. Vice-President JD Vance mocked Carney, saying he “comes in and puffs his chest out” and tries to “out-tough” Trump, but “fundamentally, like, they climb down on a lot of issues.” Vance added that Canada has “shifted in a Trumpian direction.” For once, Vance was telling the truth. The Carney government has made unnecessary concessions to Trump and adopted many “Trumpian” policies: massively increasing military spending, rolling back environmental and Indigenous rights, introducing measures that have facilitated mass deportations and stripped refugee protections, and using Section 107 of the Labour Code to break strikes and send workers back to work. The Carney government wasn’t pressured into making these “Trumpian” moves however. The reality is that both the Carney and Trump governments belong to corporate monopoly interests which support many of the same policies.

If the Carney government were serious about defending sovereignty, it would be rolling back U.S. corporate penetration at home through expanding public ownership. Instead, it is opening Canada to unprecedented privatization of public wealth and services. Real sovereignty means condemning the U.S.’s illegal war on Iran instead of calling it “worth it.” Real sovereignty means standing with Cuba against the U.S.’s attempt to strangle the Cuban people. Real sovereignty means rejecting the U.S. demand that Canada be disallowed to trade with non-market economies. Real sovereignty means fully implementing the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and expanding environmental and labour rights, instead of rolling back Indigenous, environmental and labour rights in the name of “fast-tracking projects of national interest”. Real sovereignty means the people of Canada taking control of our key economic pillars through public ownership and democratic control, instead of accelerating the privatization of public wealth and services to foreign capital.

Instead of choosing between reactionary tariffs and massive job losses on the one hand, and submission to continental corporate free trade on the other, we must fight for a real alternative that will create jobs and build a genuine popular sovereignty. We need to get out of the USMCA. We need truly multilateral and mutually beneficial trade that serves working people. We must nationalize our key industries and put them under democratic public ownership. Public ownership of auto and steel would rebuild Canadian manufacturing, creating tens of thousands of well-paid and permanent value-added jobs. We need mass construction of social housing and public infrastructure across Canada to end the housing crisis and create jobs. We need to expand Employment Insurance to 90% of previous earnings for the full period of unemployment. We need plant closure legislation with teeth, requiring corporations to justify closures before a public tribunal with the power to stop them. To fight for peace and sovereignty, Canada must withdraw from NATO and NORAD and pursue a foreign policy based on peace and international solidarity.

Canadian and U.S. corporate monopolies share a common agenda: driving down wages, gutting environmental regulations, eroding democratic oversight, and maximizing profit at any cost. For Canada’s billionaires and their transnational partners, access to the U.S. market is well worth sacrificing public healthcare, workers’ livelihoods, and even core aspects of Canadian independence. The Carney government’s agenda weakens collective bargaining, restricts strike action, and will Americanize Canada’s labour laws, all while claiming to stand up for Canadian workers against Trump. We call on working people across Canada to organize and mobilize around the demand for governments to put workers first and build popular sovereignty. Real sovereignty means expanding democracy. It means taking control of our economy, our resources, and building a future. The working class must lead the fight for a truly independent and socialist Canada.

Central Executive Committee, Communist Party of Canada