As the relationship between the United States and Canada continues to degrade, it now comes at the expense of each country’s industrial security.
Last month, the Pentagon announced the unilateral suspension of the 86-year-old Canadian Permanent Joint Board on Defense in response to what the White House sees as Ottawa’s failure to present a credible plan to spend 3.5 percent of GDP on defense by 2035. And the opening of the gleaming new bridge between Detroit and Windsor has been long delayed in the tense run-up to the continental trade deal review.
What many policymakers in Washington fail to realize is that their actions are producing the opposite of their intended effect (encouraging Canada to invest further in its defense). Instead of forcing hard choices to deepen continental security and integration, they are contributing to the growing perceptions among Canadians that the United States is an unreliable and unpredictable partner. To borrow a phrase from Prime Minister Mark Carney’s Davos speech from earlier this year, many Canadians now believe the country should “hedge against uncertainty.” Just when Washington needs to expand its defense industrial base, the Trump administration is undermining the political foundations needed to do so with its closest allies.
The fundamental problem is not a lack of mechanisms for cooperation or disagreement over the importance of munitions, shipbuilding, or critical minerals. Rather, effective industrial integration depends on credible demand signals, which are difficult to sustain when one partner can unilaterally redefine priorities and punish perceived noncompliance.
Under these circumstances, the appropriate policy objective is not transformation but mitigation. In Ottawa, policymakers have little choice but to continue reducing Canada’s long-standing dependence on its superpower neighbour and expanding economic and strategic alternatives where possible. In Washington, meanwhile, Congress would better serve U.S. national interests by constraining the most disruptive elements of the Trump administration’s agenda, thereby restoring a measure of predictability and credibility to bilateral cooperation.
What Existing Analysis Gets Right
From Ukraine to the Middle East, ongoing wars evoke an old lesson: Military power depends not just on advanced weapons, but on the ability to produce them at scale. With this lesson in mind, both Ottawa and Washington have pursued more active industrial strategies, with an eye on fostering ecosystems of engineers, manufacturers, and suppliers, as well as testing capabilities to sustain military production.
A recent article in War on the Rocks makes a strong case for closer Canada-U.S. cooperation in defense. Why should the U.S. and Canada duplicate investments or compete for labor and capital in, for example, shipbuilding or Arctic capabilities, when the two neighbors can integrate and synchronize their efforts?
Thanks to both geography and history, the United States and Canada already share countless formal and informal agreements, including a commitment to defend one another in the event of an attack. Their economies and defense sectors are likewise interconnected. Canadian firms participate in American production programs, from the F-35 fighter jet to artillery shell manufacturing. Canada is also the original focus of the National Technology and Industrial Base, a congressionally mandated framework designed to integrate the defense industrial bases of America’s Five Eyes partners.
The authors of the article arguing for greater cooperation proposed a kind of “Goldilocks” plan for more defense integration: Close enough to achieve greater efficiencies and resilience, but not too close, as this would upset the political class committed to “sovereignty.” Prima facie, their blueprint aligns with Prime Minister Carney’s talk of a “Fortress North America,” where a more independent Canada would help “make America great again” through deeper integration in selective sectors, such as automobiles, aluminium, energy, and minerals.
But after more than a year of the Trump administration’s coercive public statements and policies, “sovereignty” has become an insurmountable obstacle. Among American allies, nine nations of Europe have decided to join a Paris-led nuclear deterrence initiative to bolster security on the continent. Related, Japan, South Korea, and Australia are all expressing interest in European defense production.
Canada’s strategic orientation is no different. The Carney government has set out on an ambitious nation-building strategy that includes both retaliatory tariffs on American goods and a rapid diversification of trade and investment away from the United States. Ottawa is likewise expanding its military spending and security-related infrastructure, while seeking a landmark strategic defense and security partnership with the European Union. Together, these and related initiatives reveal a hedging logic aimed at bolstering Canada’s strategic autonomy over the long term.
The same emphasis is visible on the domestic front. Ottawa has expanded measures to counter disinformation and foreign interference, reflecting concerns that strategic competition targets political and social cohesion. Crucially, China and Russia are no longer the only sources of threat. Reports of links between Alberta separatist networks and figures within the Trump-aligned political ecosystem further reinforce Ottawa’s interest in strengthening national-security protections against foreign political influence, including from the United States.
For U.S.-Canadian defense cooperation to deepen, the Carney government would have to make a major policy U-turn. This seems unlikely. Canadian voters would not only punish this reversal, but also reward politicians who think Canada should prepare for American threats — economic, military, technological, or informational — against its northern neighbour.
Diversification and Autonomy
The government’s policies are less a break from Canadian foreign policy than a return to a longstanding goal: greater autonomy from the United States. Like Pierre Trudeau’s “Third Option” in the 1970s, Ottawa once again seeks to reduce dependence on Washington by diversifying its economic, diplomatic, and security ties. Today, however, the driver is not fear of economic absorption but growing uncertainty about the reliability of the United States government as a partner.
Contemporary Canadian hedging revives the Cold War concept of “defense against help”: maintaining sufficient sovereign capabilities to avoid intervention by a larger neighbour. While once focused on Arctic and continental defense, the concern now centers on preserving political autonomy amid U.S. economic and political pressure. Once again, the issue is not only burden-sharing within NORAD, but limiting dependence on a transactional and unpredictable partner.
In this context, Ottawa’s diversification of defense partnerships takes on broader strategic significance. Alongside the aforementioned defense agreement with the EU, Canada has deepened cooperation with South Korea, Australia, and other Indo-Pacific partners while pursuing Canadian-controlled capabilities in what Prime Minister Carney calls “strategic stack” areas, including artificial intelligence, clean energy technologies, critical minerals, semiconductors, space-based communications, vaccines, and, of course, key defense technologies such as radars, drones, and underwater sensors.
In short, what once seemed economically inefficient now appears politically astute, as voters reward government efforts to reduce vulnerability. Canadians acknowledge that the North American partnership is not an either-or choice. Yet they also believe in reassessing the assumptions and choices that have shaped collective Canadian life over the past half-century, if not longer.
Conclusion
The paradox facing Washington is that defense-industrial power in the twenty-first century cannot be rebuilt through coercion alone. Expanding production capacity, securing supply chains, coordinating procurement, and sustaining technological advantages all require long-term political trust among allies whose cooperation remains voluntary and politically contingent. Yet, the more Washington weaponizes asymmetrical interdependence to extract alignment, the more allies such as Canada will hedge their bets by diversifying partnerships and reducing strategic vulnerabilities.. In this sense, the growing resistance to deeper continental integration is not simply a Canadian reaction to Trump-era nationalism. It also reflects a broader structural contradiction in contemporary American strategy. A United States that treats allies simultaneously as indispensable industrial partners and as targets of coercive pressure risks weakening the very alliance networks upon which Western industrial and strategic resilience ultimately depend.
This is where U.S. lawmakers might decide to intervene more frequently. Recently, we have seen members of Congress trying to constrain the Department of Defense’s discretion by incorporating statutory requirements and limitations into the Fiscal Year 2027 National Defense Authorization Act, thereby influencing the direction of defense policy and force planning. However, there are limits on the extent to which the legislative branch can constrain the executive branch’s authority over foreign policy. As a result, while Congressional efforts can offer some policy stability, they’re ex post facto. The United States has already acquired a reputation as an unpredictable partner, and overcoming this perception will take a very long time.
The extent to which U.S. allies, including Canada, are willing to bear the costs of hedging, however, remains uncertain. Pursuing greater strategic autonomy from the United States would almost certainly expose Canada to various forms of American coercion, including punitive tariffs, restrictions on market access, pressure on integrated supply chains, and the possible exclusion of Canada from key defense-industrial programs, technology-sharing arrangements, and military institutions such as the Permanent Joint Board on Defense and, much worse, North American Aerospace Defense Command. Ottawa could also face reduced access to sensitive intelligence, procurement networks, or continental defense initiatives if Washington comes to view Canadian diversification efforts as politically or strategically disloyal. In military and economic terms, a more autonomous posture may entail duplicating capabilities previously outsourced to the United States, requiring substantially greater and longer investments in sovereign capacities.
None of this leaves Washington without options for arresting the slide. The most immediate lever is the one Congress is already reaching for: writing predictability back into law through multiyear appropriations, statutory procurement commitments, and limits on the executive’s discretion to suspend cooperation. Yet, as we suggested above, the value of this route is precisely what is in doubt, since it presumes that congressional authorization still meaningfully binds an administration prepared to govern around it. Restoring credible demand signals will therefore require mechanisms that do not rest on the goodwill of any single branch or administration. Long-horizon, contractually binding co-production agreements are harder to unwind than executive declarations, and they create domestic constituencies with a direct stake in continuity. Cooperation anchored at the state and provincial level, where integrated supply chains already run deep, can sustain collaboration beneath the turbulence of presidential politics.
Similar challenges extend well beyond defense. Building a more independent and resilient Canada will require significant resources and whole-of-society commitment, as many of the necessary capabilities cannot be developed by a single government. The central question, therefore, is whether Canadians are prepared to bear the long-term costs that a hedging strategy may entail in an era of coercive American nationalism.
Justin Massie is a professor at the Department of Political Science, Université du Québec à Montréal. He is the co-editor of America’s Allies and the Decline of U.S. Hegemony (Routledge, 2019), and Intelligence Cooperation in a Multipolar World: Non-American Perspectives (UTP, 2024).
Srdjan Vucetic is a professor at the Graduate School of Public and International Affairs, University of Ottawa. He is the co-author of World of the Right: Radical Conservatism and Global Order (Cambridge, 2024) and Beyond Five Eyes Intelligence: An International Political Sociology (McGill-Queen’s, 2026).
Image: TheWxResearcher via Wikimedia Commons.
