US-Canada tariff war is a national security disaster for both countries

It is a widely accepted  truism, to which the Trump administration subscribes, that economic security is national security. Indeed, in his May address to the 2026 Reagan National Economic Forum, Treasury Secretary Scott Bessent termed it “a foundational principle.”

The current trade war between the U.S. and Canada, therefore, poses nothing less than a threat to the national security of both countries.

Canada is America’s second largest trading partner. As of June it trailed only Mexico,   accounting for 12.6 per cent of all American trade. Until now, tariffs already in force have had a modest inflationary impact in both countries. But should Canada’s dollar-for-dollar tariffs come into effect September 8, followed in January by expanded American tariffs on Canadian goods, their impact on both governments’ ability to control inflation will be far greater, with serious consequences not only for their economies but also their military programs.

Inflation already exceeds recent Office of Management and Budget predictions, upon which the Department of War has predicated its defense programs and budgets. In 2023, the forecast was for inflation to stabilize at 2.3 percent beginning in 2025. Last year, both the Congressional Budget Office and the Office of Management and Budget forecast inflation for 2026 at 2.7 percent, with the number falling toward 2 percent in the years that follow. by 2030. The War Department has mirrored that estimate.

Actual inflation has been considerably higher. The Federal Reserve’s latest figures show annual inflation at 3.6 percent for 2026, with the three-year outlook at 3.3 percent. These increases will have a significant impact on the defense budget. They translate to an........

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