What The Hell America!

Out of nowhere, for reasons mainly unknown (or unexplained), President Donald Trump has spent the early days of his second term insulting Canada and threatening its sovereignty, repeatedly suggesting that Canada should, and would, become an American state. He has stoked an on-again, off-again trade war, risking $900 billion in trade between the two countries. Canada is not blameless in the relationship; it spends paltry sums on its own defense, traditionally preferring to have the U.S. taxpayer absorb that burden. At a recent Atlantic event, I spoke with the Canadian ambassador to the United States, Kirsten Hillman, about Trump’s aggressively anti-Canadian posture, and about her country’s defense spending and trade policies.

Jeffrey Goldberg: My colleague Anne Applebaum recently said something that struck me: Donald Trump has achieved the impossible. He’s made Canadians angry. Are you angry at the way Canada is discussed by President Trump?

Kirsten Hillman: Well, first, thank you for having me, in my polite Canadian manner.

I think Canadians have gone through a range of emotions: surprise, disbelief, confusion, sadness. But we, I think, are angry and frustrated. Angry sometimes because we are unsettled by a behavior, in particular with respect to the tariffs, that is having serious and immediate impacts on our well-being, economically. It’s having big impacts here as well, but it’s having impacts on our well-being, and Canadians are like, “Well, can we just talk about this? Because we don’t think this makes sense for you, for us. This isn’t how good friends work together. Let’s get down and talk about it.” And we will. But I think, yes, Canadians have become very seized of this issue, very seized indeed.

Goldberg: How do you explain Trump to your colleagues in Ottawa? Do you tell them, “Oh, he means it. He literally wants to make Canada a state”? Do you take him seriously but not literally?

Hillman: One: I think that it’s clear that the president of the United States and his administration are seeking to transform, in particular, their economic relationship with the world and, therefore, very much with us. We have the single biggest trading relationship with you, of any country in the world; we’re your biggest customer. We buy more from you than China, Japan, the U.K., and France combined. It’s a huge relationship, in all ways, not just economic. And the president and his administration are seeking to change that in ways that I think are quite consequential. And that is what it is. It will change, and therefore we will change, and therefore we will move into something different than we have been in for a few generations.

In terms of taking the president seriously, Donald Trump is the president of the United States—of course we take him seriously. He’s a man with enormous influence and power over this country and the world. And so yes, we take it seriously.

Goldberg: Among the things Donald Trump told The Atlantic in a recent interview is that the U.S. is “subsidizing” Canada “to the tune of $200 billion a year.” True or untrue?

Hillman: Untrue.

Canada and the U.S. have the biggest bilateral trading relationship in the world. We sell, back and forth, in goods and services, $2.5 billion a day. In that relationship, for those who are looking at this through the perspective of balanced trade, which the president most certainly does, Canada has a trade deficit—in other words, we buy more than we sell—of manufactured goods, of electronics, certainly of services, stuff that Americans make and manufacture, the things that the president is very deeply concerned about. We buy more of that from you than you buy from us. And we are about one-tenth your size, just to put that in perspective. Another thing to put in perspective is, in manufactured products for the United States, more than half of what you manufacture in the United States, you export. So, selling your manufactured products to other countries is very important for the jobs that the president wants to create. And I think 77 percent of your economy runs on services. Again, we are a huge consumer of American services.

But a third of what we sell you is energy, and a lot of that is oil, and the Canadian oil that we sell is transported down to the Gulf Coast, where it’s refined. It is, frankly, according to many Canadian experts, sold at a discount. That product is then refined and resold at three times the price into the United States, to third-country markets, keeping your manufacturing costs down, right? So yes, we sell you more energy than you sell us—that is absolutely true. And because a third of what we sell to you is energy, overall, we have a trade deficit, but it’s about $60 billion, not 200. But if the United States wants to balance trade with Canada, the only way to really do that—we can’t buy that much more from you; we are 41 million people; there’s only so much we can buy. We will have to sell you less energy. And I don’t actually think that’s what the administration wants.

Goldberg: So, when he says we don’t need anything that you make, that is untrue?

Hillman: I believe that the U.S. benefits from the Canadian-energy relationship, from our manufacturing relationship. We sell you critical minerals. We sell you uranium. We sell you all sorts of products that, if you weren’t buying them from us, and if you don’t have them in the ground, if you don’t actually have them, then you’re going to buy them from someone else. And is it going to be Belarus or Venezuela? Why wouldn’t you buy it from us? An ally, a steadfast ally and friend and an ideologically aligned country that wants democracy and rule of law.

So what does need mean? Does it mean the United States could survive without affordable Canadian energy? Probably. Does it mean that the price of all sorts of things would go up for Americans? Yes, it does. Does it mean you might buy it from Venezuela? Probably. Is that the objective? I don’t think so.

Goldberg: Does the president understand economics?

Hillman: I think the president has a very specific vision of what he’s trying to do in America. I think there are a lot of people that don’t feel that the means by which he is seeking to do that make sense or are traditional. But he’s undaunted.

Goldberg: Can you explain the Canadian position on these tariffs?

Hillman: Tariffs are a tax on anything that’s imported into the country. And they serve a variety of purposes. They raise revenue. They disincentivize imports—they make imports more expensive—and by disincentivizing imports, they can potentially, I suppose, incentivize domestic production. All of that works in the abstract and sometimes in the concrete. But again, coming back to Canada-U.S., we are deeply integrated over generations to be as efficient and competitive as possible as neighbors and partners by using the comparative advantages of each country. So, we are a commodity country. I mean, we do lots of great stuff other than commodities, but in our relationship with the United States, largely what we do—70 percent of what we sell to you—are inputs that you put into products that you manufacture in the United States, and often sell back to us.

Goldberg: What does an angry Canadian look like?

Hillman: Well, did you watch that last hockey game?

Goldberg: What does an angry Canadian look like off the ice? We could make jokes about stereotypes, but at a certain point, you are discovering a national pride that has not been right up there on the surface, the way it is with some other countries, including the United States. Your conservative candidate lost because he was seen as too close to MAGA ideology. Would you really reorganize your economy to pull away from the United States, at a certain point? I mean, if you can’t get what you consider to be a good deal, what does the future look like?

Hillman: I think that it’s a question of mitigation. We will seek to strengthen our own economy, and we’re doing that already. We will seek to reinforce relationships that we have all over the world. We have a trade agreement with Europe. We have a trade agreement in Asia. Canadian businesses are already giving me anecdotes about selling their product into those markets.

Goldberg: You’re a two-ocean country, just like we are.

Hillman: Right. So the products that are not as competitive down here because of the tariffs, they’re going to go to these other countries. The U.S. buyers aren’t happy, but the Canadian sellers are doing what they have to do for business. But of course, we want to get to a place of sort of stability and predictability with the United States.

Goldberg: But what if you can’t?

Hillman: You know what? I think we can. This administration has changed the paradigm about the role that it wants to play and how it proceeds in trade and economic discussions or relationships. There’s no question about that. And we have to adapt. But the American people, the businesses here in America, consumers here in America, are better off with a more stable relationship with your biggest customer.

Goldberg: Has Canada made any mistakes along the way in managing its relationship with the United States?

Hillman: That’s a good question. I mean, we all make mistakes, don’t we? I’m not sure I would characterize it as a mistake. I think that what Canada and probably all of America’s allies around the world have to continually make sure we fully understand is that the U.S. is seeking to play a different kind of role, to do things differently. We have to actually act in a way that fully recognizes that, and relate to this administration from where they are, right? They want to transform the way the U.S. relates to the world. They will do that, and we will therefore have to do the same.

Goldberg: Let me ask one specific question on the subject of noneconomic relationships. Your military is very small. You have, I think, 68,000 active-duty soldiers, airmen—

Hillman: 70,000.

Goldberg: You don’t spend even 2 percent of GDP on defense, although you’re trying to move it slowly. Isn’t there a legitimate reason for Americans to say, “Canada, like many European countries, just hasn’t pulled its NATO weight.” I mean, I’m wondering if that’s something that stimulates some American resentment of Canada.

Hillman: I think that there’s no question that not just the U.S., but all of our NATO allies are eager to see Canada spend more and faster. We have tripled our spending in the last 10 years or so, but yes, we can do more and we will do more. We just had an election yesterday. I anticipate that that will be something that our new prime minister will speak to soon. So yeah, I think that that’s a fair point. But I guess the other thing that I would say—so, absolutely a fair point—where we are trying to really orient ourselves in our defense priorities, is toward things that we can do that are specific to Canada.

Goldberg: Under pressure, Canadian patriotism is becoming a thing. Do you feel differently now as a Canadian than you did six months ago?

Hillman: Not me. I represent Canada in a foreign land. And I am every single day reminded of my Canadian-ness. It’s a big part of my job to understand that and to express who we are as a nation to you here in the United States. We’re a deeply patriotic country with a strong sense of our values, who we are, and our hopes and dreams. But more to your beginning point, we’re a quieter bunch about it. We are not born of revolution. We are born of negotiation. We are born of a much more gentle birth, if you will, than the one you encountered. And I think that—

Goldberg: You were kind of ambivalent about King George III. We get it. [Laughing.] “There are good people on both sides.”

Hillman: Our founding nations are France, the U.K., but of course, our First Nations, our Native people, were there, who remain a huge part of our cultural reality and important to our cultural identity. So we’re just a different country, but we’re the less rowdy cousin at the Thanksgiving table.

Goldberg: Right.

Hillman: But not today. Not today.

Goldberg: Not today?

Hillman: Getting rowdier.

Goldberg: And my final question: When you met Donald Trump five years ago, when you first came to Washington to do this job, did you think that he was anti-Canadian? Did anything suggest that, oh, there’s trouble afoot here?

Hillman: No, in fact, I met President Trump during the NAFTA renegotiation a few times and then over the course of the COVID crisis, when we had to slow down the border. And on the contrary, I think he is very supportive of Canada-U.S., very supportive of us. I don’t think that President Trump is anti-Canada, just to be clear. I don’t think President Trump is anti-Canada at all. And Canada’s not anti–United States. We love you guys. You’re our neighbors and our friends. I mean, you were talking about the military: We fought and died together in all the wars—First World War, Second World War, Korea, Afghanistan, all over the world. So there is no greater partnership. We have almost half a million people go between our two countries every day. Not, maybe, lately. But truly, we have an enormous amount of interconnection. If you ask me why I’m confident that we will figure this out, it’s because of that. It’s because of the half a million people almost every day; it’s because of all of this. We have to—those of us who represent our people—our job is to figure it out, and we will. And I’m convinced that the president will be happy to do so, or will certainly do so.