ANALYSIS: Ottawa’s Strategic Silence and Europe’s Inaction in the Face of Trump’s Tariffs — Wisdom or Capitulation

The Silent Erosion of Competitiveness

But let’s examine the other side of the equation with the same rigor. Every week that U.S. tariffs remain in effect without effective retaliation is a week of tangible losses for entire sectors of the Canadian economy. The steel and aluminum industry, already weakened by the energy transition and international competition, is seeing its margins squeezed. Exporting small and medium-sized businesses that aren’t strong enough to absorb a 25% tariff surcharge are beginning to lose contracts to Mexican, Asian, or even American competitors who manufacture on U.S. soil.

There is also a devastating psychological effect on investment. When companies—both Canadian and foreign—see that access to the U.S. market is uncertain, they hesitate to invest heavily in Canada. Why build a plant in Windsor or Saguenay if the border could tomorrow be burdened by an additional tariff imposed by presidential decree? This tariff uncertainty is itself a drag on growth, regardless of the actual level of the tariffs.

This is what deeply frustrates me about the rhetoric of passive wisdom: it assumes that the status quo is sustainable indefinitely. But while Ottawa analyzes and procrastinates, companies are shutting down production lines. Workers are losing hours. CEOs are signing leases in Houston rather than in Hamilton. Wisdom comes at a price that diplomatic press releases never account for.

The Issue of Diversification—An Old Promise, Slow Execution

For decades, Canada has known that it is too dependent on the United States. For decades, every government—Liberal and Conservative alike—has promised to diversify export markets. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Comprehensive Economic and Trade Agreement (CETA) with Europe: these treaties exist, they are in force, but they remain underutilized. Canadian exporters continue to head south out of habit, for logistical convenience, due to business culture—and because the U.S. market remains, despite everything, the richest and most accessible one within reach.

The real question that the current tariff crisis should force Canada to ask itself is not so much “Should I retaliate now?” as “How do I fundamentally restructure my trade exposure model so that in five years, Trump 2.0 or 3.0 can no longer hold me hostage?” This is a major economic transformation—and it won’t happen quietly.

The Burden of European Fragmentation

The European Union’s situation differs from Canada’s but bears some troubling similarities. In theory, Brussels possesses economic clout comparable to that of the United States—an internal market of more than 450 million consumers, an international reserve currency, and considerable trade influence. On paper, Europe has the means to respond to U.S. tariffs with retaliatory tariffs that would hurt politically sensitive sectors in the United States: agriculture in the Midwest, Harley-Davidsons in Wisconsin, and bourbon in Kentucky. It is no coincidence that these targets were selected during Trump’s first term—they deliberately targeted key swing states.

But Europe is not a unitary state. It is a coalition of 27 nations with interests that are sometimes convergent, but often divergent. Germany, with its automotive industry that exports heavily to the United States, has a very different tolerance for risk than France, whose agricultural sector is more threatened by U.S. countermeasures. The Baltic states, focused on security issues with Russia, are particularly keen not to weaken NATO through a trade dispute with Washington. Reaching a European consensus on a tariff response is therefore a political exercise of formidable complexity—and it takes time.

I understand the workings of European institutions. I understand the constraints. But there are moments in history when slowness is not wisdom—it is weakness disguised as procedure. While Brussels seeks consensus, German factories, French winemakers, and Italian cheese producers are suffering the consequences of a decision made in Washington in the space of a few tweets.

The Dangerous Precedent of Non-Response

There is a real geopolitical risk to the doctrine of strategic silence that goes far beyond trade accounting. If the United States’ traditional partners learn that punitive tariffs can be imposed without significant retaliation, they send a signal to decision-makers in Washington: the tactic works, do it again. This is the logic of moral hazard applied to international relations. By failing to respond forcefully, Canada and Europe could, paradoxically, encourage future escalations rather than discourage them.

There is also the question of what other global players are observing. China, India, Brazil, and the Gulf states—all are watching to see how Washington’s traditional allies handle this difficult relationship. If the message they take away is that even the United States’ closest partners are taking the blows without really fighting back, this reinforces a certain view of the world: one in which American power is exercised without any real constraints, even from its closest allies.

The Power of Multilateral Mechanisms

An argument often overlooked in this debate is that Canada and Europe are not forced to choose between a dramatic tariff retaliation and total silence. There are intermediate mechanisms that allow them to challenge U.S. tariffs on the merits, on legal grounds, and regarding their duration—without triggering an immediate escalation. The World Trade Organization (WTO) has dispute settlement mechanisms that, in the past, have forced the United States to modify or withdraw trade measures deemed illegal under international law.

The problem is that these mechanisms are slow—proceedings can drag on for several years—and that the Trump administration has systematically undermined the functioning of the WTO, notably by blocking appointments to the Appellate Body of its dispute settlement system. The tool exists, but it has been deliberately weakened. That said, initiating formal proceedings has real symbolic and diplomatic value: it establishes legal precedents, mobilizes coalitions of other affected countries, and creates a case file that can be used in future negotiations.

What strikes me about this crisis is the cruel irony of the situation: the United States, together with its allies, built a rules-based multilateral trading system—and now it is that very same system that Trump is using as a playground to impose unilateral rules. And meanwhile, the architects of this order, led by Canada, are trying to figure out how to survive amid the rubble of a structure they themselves built.

Parallel Economic Diplomacy

Beyond formal mechanisms, Canada and Europe can also resort to what might be called parallel economic diplomacy—discreet but effective measures that exert real pressure on Washington without crossing the threshold of direct escalation. This could include accelerating trade partnerships with other major economies—agreements with ASEAN, strengthening ties with India, and deepening intra-block trade—which signal to Washington that its partners have alternatives and are ready to pursue them.

It may also include subtle non-tariff measures: revisions to public procurement procedures that subtly favor non-U.S. suppliers; tightening technical standards that create administrative barriers for certain U.S. products; and coordination among allies to present a united front in international economic forums. These tools are less visible, less dramatic, but potentially more sustainable than reciprocal tariff salvos.

Wisdom or Rationalization of Powerlessness

Let’s be honest: calling silence “wise” may simply be an elegant way of rationalizing a real powerlessness. Wisdom implies a deliberate choice among real options. But if Canada and Europe are not fighting back, it may also be because they lack—both politically at home and economically—the means to bear the cost of a prolonged escalation. Canadian and European governments know that their own industries, their own unions, and their own consumers would suffer from an all-out trade war. “Wisdom” is sometimes the name we give to constraint when we’d rather not admit that we’re stuck.

We must also acknowledge the psychological factor weighing on the decision. Trump has a remarkable ability to create uncertainty and keep his opponents in a state of perpetual indecision. The threat of additional tariffs, the possibility of negotiated exemptions, and contradictory statements among members of his administration—all of this creates a strategic fog in which it is genuinely difficult to make clear-headed decisions. And uncertainty, in this context, benefits whoever holds the tariff lever.

This is the crux of the problem that no one really wants to name: when we say that silence is golden, we are implicitly saying that our economic dependence on the United States is so deep that we cannot afford to fall out with them. It is a difficult, uncomfortable truth that says something important about the real state of our economic sovereignty in 2025.

The Underestimated Domestic Political Dimension

The calculation of restraint isn’t made only in the trade war rooms of Geneva or Ottawa—it’s also made in election polls. For Mark Carney and Canada’s newly elected Liberal government, a heavy-handed tariff retaliation that triggers a recession or massive job losses in manufacturing Ontario would be politically catastrophic. There is therefore a real temptation to manage the crisis by seeking to minimize visible damage rather than risking a head-on confrontation whose effects could be felt before the next election.

In Europe, the dynamics are similar. Several key governments—in Germany and France—are facing intense domestic political pressure, with populist and nationalist parties capitalizing on every sign of economic weakness. A German chancellor who triggers a trade war that hurts the automotive industry—the backbone of the economy and a national symbol—would pay a huge political price. Trade caution and electoral caution converge on the same stance.

The Years 2018–2019 and What They Taught Us

This isn’t the first time Trump and his tariffs have disrupted the global trade order. During his first term, between 2018 and 2019, he had already imposed tariffs on Canadian and European steel and aluminum. The reaction back then was different from what we’re seeing today: the European Union responded quickly with counter-tariffs targeting politically sensitive U.S. products, and Canada did the same with a carefully calibrated list of retaliatory measures. The result? An escalation that lasted several months before exemptions and a renegotiated trade agreement (USMCA) put an end to the hostilities.

Those who advocate for patience today argue that the 2018–2019 response didn’t really work—tariffs persisted for months despite the countermeasures, and the Canadian and European economies suffered as a result. But those who defend the retaliation counter that without that pressure, Trump would never have agreed to return to the negotiating table and end the most destructive measures. The truth lies somewhere in between—and history does not allow for a definitive conclusion.

What history teaches us—and what I’ve finally come to accept after much reluctance—is that there is no single, universal right answer to Trump. Sometimes retaliation works. Sometimes it exacerbates the crisis. The context in 2025 is different from that of 2018: polarization in the U.S. is more intense, Trump is politically more powerful, and the allies are economically more vulnerable. Perhaps the current restraint is indeed more justified than it was in 2018. Perhaps. It’s not certain.

The Trade Wars That Dragged On—and Their Forgotten Victims

The history of protectionism and trade wars offers grim lessons on what happens when escalation is not quickly contained. The Smoot-Hawley Tariff Act of 1930—probably the example most often cited by economists—triggered a spiral of international retaliation that helped turn a recession into the Great Depression. While this extreme precedent is certainly out of proportion to the current situation—we are far from a collapse of global trade—it illustrates the destructive potential of unchecked escalation.

More recently, the U.S.-China trade war launched by Trump during his first term yielded mixed results for both sides. China retaliated with counter-tariffs; the escalation continued for years; and in the end, American consumers absorbed much of the cost of the tariffs in the form of higher prices, while American farmers lost market share in China that has not been regained. The deal signed in 2020 did not truly end the trade war—it merely put it on hold temporarily. Tensions persist.

Fundamental Reform or Cosmetic Fixes

The real question this crisis raises is not tactical—it is structural. Canada and Europe must decide whether they want to continue managing crisis after crisis at the whim of Washington, or whether they are ready to embark on a profound transformation of their model of trade dependence. For Canada, this means investing heavily in market diversification—not just signing trade agreements that remain underutilized, but building physical infrastructure and cultural business bridges that allow companies in Vancouver to do business just as naturally with Tokyo or Seoul as with Chicago or Detroit.

For Europe, this means accelerating the development of its strategic economic autonomy—a project long championed by France but often blocked by more Atlanticist partners. It means producing more critical goods locally, reducing dependencies on semiconductors, energy, pharmaceuticals, and defense technologies—and, by extension, becoming less dependent on the whims of U.S. trade policy.

There is something almost liberating about this crisis if we choose to see it differently. Trump is a painful but real wake-up call. He is telling us—shouting at us—that trade dependence is a strategic vulnerability. Canada may need this wake-up call to finally do what it should have done twenty years ago: truly build alternatives to the U.S. market, not just promise them in campaign speeches.

The Role of the Private Sector in Pressuring Decision-Makers

A crucial player in this debate is often overlooked: the Canadian and European private sectors themselves. The large corporations that have the most to lose from tariff uncertainty have considerable lobbying power and political influence—in Ottawa as well as in Washington. It is often these same companies that have the most leverage to convince U.S. Republican lawmakers and senators—who are sensitive to the interests of their corporate donors—to temper the White House’s tariff zeal.

Coordination between Canadian and European business associations and their U.S. counterparts—who are also suffering from disruptions in supply chains—could prove a more effective channel for exerting pressure than official diplomatic statements. It’s not glamorous. It’s not heroic. But in the world of international trade in 2025, the most important battles are often won in corporate boardrooms in Washington, D.C., not at press conferences in Ottawa or Brussels.

Workers in the Blind Spot of the Strategic Debate

While economists debate the wisdom of silence and diplomats weigh the balance of power, there are men and women who cannot afford to wait for the optimal strategy to be identified. The worker at the Saguenay aluminum plant whose shift has been cut because a U.S. order was canceled. The British Columbia lumber producer who doesn’t know if next month’s shipment will make it across the border with a 25% tariff. The Saskatchewan farmer who checks the futures markets every morning, hoping that grain tariffs won’t be extended.

These human realities are often absent from strategic analyses that debate the relative merits of retaliation and restraint. They are captured in aggregate statistics—unemployment rates, GDP, trade balance—but behind these figures lie family budgets, mortgages, and plans for the future put on hold. Strategic wisdom must not become a conceptual luxury for decision-makers who, for their part, are not risking their jobs in the coming months.

This is where the debate over the wisdom of silence touches me most deeply. There is a fundamental inequality in who bears the cost of this strategic caution. Senior officials, economists, and trade ministers—they can afford to wait and see how the situation unfolds. Workers in vulnerable industries, on the other hand, are waiting with empty hands. This is a truth we must have the courage to state loudly and clearly.

The implicit social contract that this crisis is putting to the test

There is an implicit social contract underlying any open trade policy: the aggregate gains from free trade will be distributed sufficiently so that those who lose jobs in industries exposed to competition can be compensated, retrained, and reintegrated into the economy. This contract has failed in many countries—and this failure has fueled precisely the nationalist populism that brought Trump to power twice.

If Canada and Europe now choose strategic restraint in the face of U.S. tariffs, they have an obligation to invest heavily in social safety nets and economic transition programs for workers in the most vulnerable sectors. These are not optional measures—they are necessary countermeasures to a strategy that requires the most vulnerable to absorb shocks for which they are not responsible. This social dimension of the trade debate is dramatically underrepresented in the analyses I read on this subject.

Three Possible Paths

Looking ahead to the coming months, we can identify three plausible paths for trade relations between the United States and its traditional partners. The first scenario is that of quiet negotiations leading to a successful outcome: Ottawa and Brussels maintain their restraint, technical discussions progress behind the scenes, and within a few months, sector-specific exemptions or a partial framework agreement will mitigate the most damaging tariffs. This is the preferred scenario of advocates of passive wisdom—and while it is possible, it is by no means certain.

The second scenario is one of escalation. Trump, interpreting this restraint as an invitation to go further, announces new tariffs on other sectors—automobiles, pharmaceuticals, and agricultural products. Faced with growing domestic political pressure, Ottawa and Brussels are ultimately forced to retaliate, triggering an escalation that both sides wanted to avoid but that no one was able to prevent. This is the worst-case scenario—but it is far from impossible.

The third scenario, the one least often discussed, is that of a slow drift: no dramatic escalation, no agreement, just a gradual erosion. Tariffs remain in place, the Canadian economy adapts painfully, certain industries gradually relocate to the United States, and in five years we realize that we’ve lost entire swaths of our industrial base without there even having been a visible crisis to react to. This may be the most dangerous scenario—and the most likely one if the wisdom of silence isn’t accompanied by a proactive transformation strategy.

The red lines that Ottawa and Brussels must publicly define

One thing that Canada and Europe have not yet done clearly—and which would constitute a strong diplomatic move without immediate escalation—would be to publicly define specific red lines. To state explicitly: “If tariffs reach a certain level in a certain sector, we will respond with a specific measure.” Such clarity would serve several purposes simultaneously. It would inform Washington that patience has concrete limits. It would reassure domestic industries that their government is not resigned to simply taking the hit. And it would create a deterrent framework that, if credible, could precisely prevent the escalation it purports to manage.

The absence of publicly stated red lines sends the opposite signal: that restraint is unconditional, that patience is limitless, and that pressure can continue to mount without triggering a response. This is not wisdom—it is strategic ambiguity that can be misinterpreted.

What This Crisis Reveals at a Deeper Level

Having completed this analysis, I am convinced of one thing: the debate over the “wisdom” of Canada’s silence and Europe’s inaction is less important than the question it obscures. The real question is not tactical—it is existential. What kind of economic power does Canada want to be? What level of strategic autonomy is Europe prepared to build for itself? These questions predate and transcend Donald Trump—they will remain after he is gone, regardless of the outcome of the current tariff dispute.

Strategic restraint in the face of tariffs can be reasonably justified in the short term, for reasons of balance of power, preserving channels of negotiation, and avoiding an escalation whose costs would be borne first and foremost by workers who asked for none of this. But this same restraint becomes a trap if it is not accompanied by a profound and urgent transformation of the model of trade dependence that has made us so vulnerable. Silence may be wise for today—provided it paves the way for a stronger voice tomorrow.

I conclude this analysis with a sense of ambivalence that I fully acknowledge. I understand the arguments for caution. I partially agree with them. But something inside me resists calling that wisdom. Wisdom, to me, implies a vision. A plan. A direction. What I see in the attitude of Ottawa and Brussels looks more like crisis management than a doctrine. And managing a crisis without a vision is just retreating—even if it’s done elegantly.

A Call to Move Beyond the Rhetoric of Binary Choices

The real challenge for Canada and Europe is to move beyond the false dichotomy between a full-scale response and total silence. Between these two extremes lies a space for diplomatic, economic, and strategic action that remains insufficiently explored. Symbolic and targeted retaliatory measures, coupled with massive investments in trade diversification, accompanied by clear communication on red lines and a multilateral mobilization of partners with shared interests—this is what a true doctrine of strategic wisdom should produce.

The true measure of success in the coming months will not be simply that Canada and Europe have avoided an all-out trade war—that is the bare minimum. The true measure will be that they have used this crisis to build something stronger, more autonomous, and more resilient. That in five or ten years, a new U.S. administration—regardless of its political leanings—will no longer be able to hold its partners hostage with the same ease. That is wisdom. Not silence—transformation.

Signed, Jacques Pj Provost