Canadians Rethink Their Relationship With the United States
Now, she said, she has never known the relationship to be under this much strain.
Few people have watched the arc of Canada-US politics as closely as Caroline Mulroney.
The daughter of former prime minister Brian Mulroney, she grew up around a cross-border relationship shaped in part by her father’s bond with Ronald Reagan — a partnership that helped produce a landmark Canada-US free trade agreement and set the tone for decades of co-operation.
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“It was his work with Ronald Reagan that led to our first free trade agreement with the United States, built on their friendship and the belief that our economies would do better working together,” she said from her office as Ontario’s President of the Treasury Board and Minister of Francophone Affairs – roles she will soon leave.
Now, she said, she has never known the relationship to be under this much strain.
Tensions have worsened sharply since Donald Trump returned to office in 2025.
A web of American tariffs has put pressure on the long-standing free trade pact linking the US, Canada and Mexico, known as USMCA, which is scheduled for review this summer.
Those talks could bring major changes, with the prospect of more tariffs and tighter rules around auto production looming large. Few sectors show the depth of economic integration more clearly than the car business.
Caroline Mulroney has seen the close Canada-US ties forged by her father Brian Mulroney wane
The US president has objected to a supply chain in which an American truck can cross the Canada-US border several times before final assembly.
“There is no such thing as an American-built vehicle, no such things as a Canadian-built vehicle. We build vehicles together,” said Brian Kingston, President of the Vehicle Manufacturers’ Association.
As trade rules shift and uncertainty spreads through the market, some automakers are already trimming production in Ontario.
Brian Kingston believes cross border co-operation is vital for the vehicle manufacturing industry
More than 100,000 workers in the Canadian car industry are now waiting to see whether the US, Canada and Mexico free trade agreement survives this summer’s review — or whether they will need to brace for a new set of rules.
“If we don’t have access, there is no Canadian automotive industry. That is just the way our industry is structured. We do need an agreement with the Americans, if not, our industry looks smaller and it will employ less people,” he said.
Wake-up call
Still, many Canadians view Washington’s new posture as a jolt — a moment that underlines the need for Canada to rely more on itself.
“We do have to become less dependent on the United States, not only in economic terms but also in a strategic sense,” said Associate Professor of Canadian history at the University of Ottawa, Damien-Claude Bélanger.
“The Canadian government has attempted to limit our dependency on the United States now, really since the 1940s. It has been a long-standing effort by a whole series of governments, both Liberal and Conservative. But it has never been done so seriously as it has been now and that’s likely to, over time, have an effect.”
Federal and provincial leaders in Canada have stressed that the country is not abandoning the US so much as widening its field of vision — seeking other alliances and fresh investment beyond its closest neighbour.
“This may feel like a setback but actually it’s opening up a number of opportunities globally,” said Donna Skelly, Speaker, Legislative Assembly of Ontario.
“Ireland and Canada, I believe, have an opportunity to identify where we can collaborate. We have such deep ties. Let’s just move forward,” she said.
Donny Skelly believes strains in Canada’s relationship with the US can also open up opportunities
Across the country, Canadians are reassessing both their ties to the United States and the way they believe their neighbour sees them.
Official figures show the number of Canadians who entered the country after returning from the US in 2025 fell by 25%.
A University of Toronto study, using mobile phone activity to track movement, also indicated there was about a 42% drop in visits by Canadian residents to US cities last year.
On the streets of Ottawa, some people said they had stopped travelling south “just on morals”.
Canadians are recalibrating their attitudes to their southern neighbour
One man said he used to drive regularly from Ottawa to New York state — just 45 minutes away — but no longer brought his smartphone with him because he feared US border officials might find anti-Trump content on the device and refuse him entry.
Still heavily dependent
Yet for all the political friction, the economies and industries of the US and Canada have been intertwined for generations. Pulling them apart is far more complicated than the rhetoric suggests.
Canada’s economy is still heavily tied to the US, with nearly 70% of its exports going south of the border. Most goods also continue to enter the US duty free.
Even if a trade deal is reached in the coming months, the bigger question may be what kind of relationship is left afterward.
Caroline Mulroney, for her part, remains hopeful the two countries can still find common ground.
“I understand the ground has shifted in a dramatic way and I assume in a fundamental way, one that will stay with us,” she said.
“Our economies are deeply integrated and no province in Canada knows that better than Ontario. We have to get back to a place where we can trade more freely than we are now,” she added.
