A weakened Trump still means trouble for the Canadian economy

You don’t need a poll to know what most Canadians will be rooting for come election day in the United States. Something resembling a thunderous rejection of the Trump agenda would go down very well this side of the border, where animosity toward the President runs deep.

For nearly two years, the Trump administration has treated Canada as a scapegoat and an economic enemy. That’s reason enough to hope the Republicans get clobbered in the midterm elections.

Practically speaking, there may also be some optimism in Ottawa that a weakened President would no longer have free rein to wage economic war on Canada. Why else would the U.S. embassy accuse Canadian officials of meddling in the U.S. electoral process?

“Keep your nose out of American politics,” U.S. Ambassador to Canada Pete Hoekstra said a couple of weeks ago with his trademark diplomacy.

Truth is, the U.S. midterms probably won’t matter much for Canadian fortunes either way. Many would delight in seeing Mad King Donald reduced to lame duck. It would be a moral victory for Canada, perhaps, but not an economic one.

Lawrence Martin: Hold off on the cheering: A Trump drubbing in the midterms could make things worse

Tariffs in the U.S. tend to have staying power, regardless of which party imposes them. An emboldened U.S. Congress is also unlikely to clear the trade uncertainty hanging thick over the Canadian economy.

“Pete Hoekstra can rest easy knowing that Ottawa doesn’t really care,” Bradley Saunders, an economist at Capital Economics, said in a recent report.

A Democratic sweep on Tuesday would leave Canada facing the same old threats – and perhaps even some new ones, if U.S. President Donald Trump blames Canada for tipping the scales in favour of Democrats.

The polls are currently leaning toward a major Republican defeat, with Democrats poised to seize control of the House of Representatives and possibly even the Senate.

In a couple of key Senate races, Canada has become an unlikely campaign issue. In Maine, where U.S. border agency data shows border crossings from Canada declined by 25 to 30 per cent last year, the hit to state tourism is fuelling a backlash. Same goes for the tariffs on Canadian goods that are weighing on household finances.

The fallout from the trade war could also help Democrats hold a crucial Senate seat in Michigan, which does more than US$60-billion in annual two-way trade with Ontario alone. Since the start of 2025, tariffs have cost the state US$23-billion, according to the National Taxpayers Union Foundation.

Could Mr. Trump’s treatment of Canada end up costing his administration legislative control in Washington? It’s not out of the question. And wouldn’t that be a sweet bit of karmic payback?

This might help to explain why Mr. Trump’s surrogates have been increasingly lashing out at Canada over election interference.

“If you interfere in our elections in Maine and Michigan, you will pay even more dearly,” trade adviser Peter Navarro said in September.

Then last week, Mr. Hoekstra released a “fact sheet” with several instances of “potential interference,” which seemed mostly to be standard diplomatic interactions over tariffs. He followed this up by saying Mr. Trump could blame Canada and retaliate if races in Michigan and Maine go the Democrats’ way, according to a CTV News report of a private business lunch. The U.S. embassy said the comments were taken out of context.

Perhaps Mr. Trump takes an even harder line with Canada after the midterms. He has shown he can do so unilaterally, having overseen a radical expansion of executive power in the first half of his second term.

It’s not a given that a Democrat-led Congress would repeal tariffs on Canada, even if it could.

“We also suspect tariff revenues are too tempting for lawmakers in either party to pass up given the precarious state of the federal finances,” Mr. Saunders said.

Investors, consider snoozing through the U.S. midterms

Protectionism has deep roots in the Democratic Party. California Governor Gavin Newsom, who’s an early hopeful to win the party’s next presidential nomination, recently promised that the disrespect of Canada would end if a Democrat ended up in the White House in 2029. But would he reverse the tariffs? “I can’t guarantee that,” he said.

Say Mr. Trump tries to withdraw from the USMCA trade pact. It’s unclear that he would even need Congress’s approval to do so, Mr. Saunders said. Likewise, Congress cannot force him to abide by the trade agreement as it already exists.

It is Canada’s sad lot to live with Mr. Trump’s belligerence for two more years and change, regardless of Tuesday’s outcome. That won’t stop millions of Canadians from celebrating his comeuppance.

Editor’s note: A previous version of this article incorrectly stated that the trade war with Canada could help to flip a Senate seat to the Democrats in Michigan. The Democrats are seeking to defend a highly crucial seat.