By Brian Lee Crowley, April 23, 2025
On March 27, 2025, Brian Lee Crowley, managing director of the Macdonald-Laurier Institute and the Center for North American Prosperity and Security, addressed an audience of businesspeople, academics, and policymakers in St. John’s, Newfoundland and Labrador, Canada, on the theme of “Navigating Disruption” in the wake of U.S. President Donald Trump’s tariff wars.
The following commentary is adapted from his speech.
I am sure that many of you will expect me to begin my talk on “Navigating Disruption” with the Disruptor-in-Chief, U.S. President Donald Trump. I am sorry to disappoint you, but the disruption of the post-war order which has perhaps reached its apex under the Trump presidency actually traces its roots right back to the assumptions that underpinned the post-war order itself.
Many of us who grew up when that order was in its heyday—the 50s, 60s and 70s—assumed that its assumptions were permanent facts about the world, and failed to read the signals about the increasing conflict between those assumptions and facts on the ground. We failed to see that increasing mismatch would, slowly but inevitably, cause the collapse of the assumptions themselves and the emergence of a new set of assumptions more in tune with the reality of the world that we actually inhabit, as opposed to the one we wish that we inhabited.
Chief amongst these assumptions was that the world was divided into two specific camps. On the one hand was a democratic and freedom-loving West composed of a wealthy and militarily powerful America and an impoverished and weakened Europe. The West faced off against an ideologically and militarily expansionist Communist bloc actively seeking, by subversion and intimidation, to pry away members of the Western camp and those unaligned countries in what we then called the Third World. In 1945 America alone represented half of the world’s GDP, while Germany was a smoking ruin and Britain and France weren’t in much better shape.
The rest of the West recovered for many reasons, but chief amongst them was American generosity. The Marshall Plan that used American wealth to rebuild its former adversaries after the war, also saw America open its markets to the West’s exports, often on much more favourable terms than American exports were welcomed in return. And America essentially took on responsibility for defending the west from Soviet expansionism. In 1950, U.S. defense spending represented roughly 70 per cent of total spending on defense by all NATO allies. All of this was deemed necessary to underpin the NATO alliance and see off the threat of Soviet domination. The prevailing mindset was summed up in JFK’s famous 1961 speech in which he proclaimed that America “shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and success of liberty.”
Fast forward to today: The Soviet Union collapsed 35 years ago. In 2023, the last year for which we have complete data, America represented 26 per cent of global GDP and the EU 14 per cent. In that same year, American GDP per capita was $86,600. Germany’s was a healthy $55,500. France’s was an equally healthy $46,200. The EU, to which much of the rest of the west belonged, had become a protectionist bloc with significant barriers to U.S. imports while the U.S. still spent two thirds of all spending on defense by the NATO alliance countries. In other words, while America declined relatively speaking from an economic point of view, other NATO countries grew handsomely, also in relative terms and, freed from the need to defend themselves from external threats, they often spent their newfound wealth on generous welfare measures instead of on defense.
Over this same time, Russia’s share of global GDP fell to a paltry 3.6 per cent, whereas China has climbed to nearly a fifth of global wealth production. And while China is not exporting communist ideology to the same extent that the USSR did, it is clearly now the chief ideological, economic, and military competitor to the United States for the title of Top Nation. Moreover, China uses its wealth to finance a worldwide campaign to seek and solidify influence and power, which it does through the kind of subterranean malign influence we are all too familiar with in Canada, the Belt and Road Initiative, military expansionism, as in the South China Sea, the establishment of military bases as far away as Africa, and sending its navy to circumnavigate Australia as it did for the first time recently. China is at the centre of a developing web of authoritarian countries that want no truck nor trade with democracy and freedom as the West understands them and that sees the post-war multilateral order as a thinly disguised attempt to impose Western values on everyone else.
Not to put too fine a point on it, the West continued to rely on American generosity, and the U.S. continued to supply that same generosity long after the conditions which justified it ceased to apply. My view is that failure to redistribute the costs and benefits of the Western alliance following the fall of the Soviet Union was a dangerous accident waiting to happen. The Trump presidency merely represents the end of the old approach in Washington, which was politely but vainly to plead with its allies to shoulder more of the share of the defense which those allies demanded America disproportionately underwrite.
I am sorry to say that there was no more egregious and hypocritical outlier than Canada in this regard, with Ottawa publicly acquiescing in the NATO floor of spending 2 per cent of GDP on defense while brazenly explaining to their allies behind closed doors that we had absolutely no intention of doing anything of the sort. Remember, presidents going back decades have asked NATO allies to pick up more of the burden of defense. The Trump presidency does not represent some unforeseeable and inexplicable abandonment of NATO by a thug and madman. It is simply that America no longer asking nicely. The fact that Canadians resent being spoken to in this way is, quite frankly, self-indulgent, although I quite agree that Donald Trump seems to revel in being as offensive as possible. But Trump’s enjoyment of being offensive does not make him wrong to return to America’s allies some of the contempt and condescension to which America has been subjected in recent years.
That brings me to the Trump presidency. I will limit myself to saying that we all do ourselves a disservice when we act as if Trump acts irrationally, and that there is no way to understand his behaviour except as that of some kind of malevolent authoritarian. Let me suggest that Trump has at least three priorities about which he is completely open and unapologetic. If you follow the logic of these central ideas and make allowances for his bombastic negotiating style, there is little that cannot be understood about Donald Trump and his priorities.
Number One: America must be top nation in the world. And not as “the dominant member of a western alliance,” but America alone. China is the key rival and it is therefore the top preoccupation in the White House. Every other foreign policy question is subordinate to this one.
Number Two: the rest of the world has taken America for granted and, worse, successive administrations and D.C. insiders have colluded in this. Whether it is illegal immigration, defense spending, national security, border management, trade, organized crime, money laundering, cosying up to China, or any one of a number of other files I could mention, Donald Trump and his circle are determined that any concessions granted to other countries be matched by concessions of at least equivalent value to the U.S.
Now I grant you that Trump often has only that haziest idea of how some of the deals that he has in his crosshairs may already be in America’s interests and that he may exaggerate to some extent how America has been wronged by its allies and partners, but he is correct that America has very often sacrificed its own interests in the interest of maintaining solidarity with other democracies. Since Trump wants Top Nation status for America and regards reliance on allies as a source of weakness, not strength, the old appeals to history and shared values will get us precisely nowhere (and this is unlikely to revert much under subsequent administrations).
Number Three: At the forefront of Trump’s political priorities are the Americans who, in Trump’s mind, have paid the price of America’s decades of coddling allies and sacrificing the country’s interests in the name of the rules-based post-war order. These are the people immortalised in Vice-President J.D. Vance’s memoir, Hillbilly Elegy. People who have been treated with contempt by Washington’s elites for decades, derided as a “basket of deplorables” and “clinging to their religion and their guns,” the people who were expected to be satisfied with President Clinton “feeling their pain” but doing little to counteract it. These people regard Donald Trump as their tribune, and he will move heaven and earth not to disappoint them.
It is with these people in mind that Donald Trump wants to unleash an American economic renaissance, an almost unprecedented push for growth, aiming not to bring prices down, but to ensure that Americans who want work are able to get it. Moreover, the main engine of the growth he wants to unleash is going to be cheap energy, the lifeblood of the economy and a source of growth that has been obstructed by a green ideology among the elites that Trump unequivocally rejects. The tariffs and other instruments of economic power that Trump is deploying are all being put in the service of bringing jobs back to America and reducing trade imbalances but I think the central role energy is playing in this strategy is too little understood, not least by Canadians. Not all of Donald Trump’s assumptions are correct. His tariff wars may, for example, ultimately prove counter-productive for him. However, it would be foolish to ignore, or willfully misunderstand, the larger plan that is discernible amongst the chaos of his day-to-day tergiversations.
With this framing it worth turning our discussion to three further themes, Ukraine, Canada-U.S. relations, and energy policy.
Ukraine. Previous administrations placed the Ukraine conflict in the old edifice of assumptions, namely: that it was America’s role to lead an alliance of democracies in the defense of post-war liberal values; that America should pick up a major share of the tab; that aspiring members of our camp should be protected from authoritarian bullies; that borders (especially in Europe) should not be changed by force, but only by negotiation, lest they spill over into generalised conflict; and that Russia is an existential menace to the West.
Trump most emphatically does not share these assumptions. His hobby horse is not the post-war liberal order, but putting America’s interests first. He thinks that Russia’s invasion of Ukraine is not a world problem, but a European problem and if Europe wants to solve it, that is Europe’s business. Ukraine is not a NATO state, and he certainly is not willing to bring it into NATO if that brings in its train a direct conflict with Russia. Europe has no claim on American resources to combat Russia when it has the economic wherewithal to combat Russia if it wishes to do so.
Trump’s view is that Europe must be confronted with the consequences of years of feckless reliance on American defense spending. Beyond the defense spending issue, Trump is also of the view that, against America’s advice and wishes, Europe allowed itself to become dependent on Russian energy. Since energy is Russia’s principal export earner, Europe is in effect handing over to Russia the means for Russia to prosecute the war that Europe wants America’s help to stop. Finally, Trump’s Top Nation strategy sees Russia chiefly, not as an ideological adversary invading a country on the road to democracy, but as a wary confederate of China’s that might well be enticed out of China’s camp. For Trump, Ukraine is a distraction from his ambitions, and he is working to take it off the table regardless of the cost to Ukraine. The only thing surprising about this is that anyone is surprised by it.
Canada. I’d like now to talk about Canada, the U.S., and the world in the context of the “Great Disruptor” (AKA Donald Trump). I know that Trump’s incredibly disrespectful and contemptuous attitude toward Canada has, quite understandably, unleashed a wave of nationalism and pride in Canada. This has manifested itself, in part, as a desire to lessen our dependence on the United States.
On the one hand this is fine and might even give us the impetus to do things that we should have done years ago, such as to tear down the barriers to trade we have allowed to fester between Canadian provinces or diversify our trade away from our dependence on the United States.
But the idea that Canada could uncouple itself from a deep intimacy with the United States is simply fanciful and cannot be taken seriously as a policy by any adult government in Canada. As an historian once famously said, every Canadian prime minister comes to power promising to reduce our dependence on the U.S., and every prime minister leaves office having seen that dependency deepen.
There is good reason for this. History has made us the beneficiaries of a common language, legal system, and outlook that we share with very few other countries. Geography has made us neighbours, and the economics literature is clear that about 80 per cent of trade relationships are geography and the other 20 per cent to trade arrangements, such as free trade agreements. We famously have free trade agreements with the Indo-Pacific (CPTPP) and with the European Union (CETA) but neither of those agreements has made anything but a marginal dent in our trade relationship with the United States. History, geography, and economics have joined us inextricably at the ankle, the knee, the hip, and the shoulder. That is not going to change.
Canada is one of the most trade dependent countries in the world. We export 50 per cent of everything the private sector produces and something on the order of 75-80 per cent of that goes to the United States. Canada’s trade exports are also not in Canadian finished products that might, just might, be diverted to customers elsewhere in the world. But rather, something like two-thirds of our exports to the U.S. are intra-firm trade, meaning they are exchanges between parts of continental firms, and are inextricably bound up in continental supply chains. For Canada, there is no alternative but to deep dependence on the United States.
Should Canada build energy infrastructure to bring our oil and gas to other markets? Of course. Should we tear down barriers to trade between Canadians? Yes. Should we think this will replace mature management of our most important economic and defense relationship? Absolutely not.
Fortunately, Donald Trump is quite wrong when he says that America needs nothing from Canada. American firms rely on Canada for many things and cannot easily or cheaply be re-placed by U.S. suppliers. That is why time is on our side in the tariff spats, and why Donald Trump is already signalling that he knows he has gone too far in singling out Canada as the poster child for the abuse to which Trump thinks America has been subject.
When the tariff tiffs have exhausted themselves and even Donald Trump comes to realise that America actually benefits from Canada as a friend and ally, we need to be ready to put a Grand Bargain on the table that puts our trade relationship in the larger context of trade offs over the many things America cares about: defense spending, Arctic security, immigration, border management, organised crime, and energy, to pick just a few.
It has always fallen to Canada to draw America’s gaze to the benefits of continental co-operation and this time will be no exception.
Energy. Finally, let’s talk energy. Here I want to quote my friend Rod Martin, who is a keen observer of the U.S. political and economic scene. He says, “The President understands that energy isn’t just an industry — it’s the foundation of modern civilization, as well as American power, prosperity, and security. He’s setting the stage for an economic and geopolitical transformation.”
What is that transformation? Not the “green transformation” of the left’s fevered fantasies, but a shift from a mentality of energy scarcity to one of energy abundance, and from a mentality of anxiety over energy’s environmental footprint to one of optimism over that energy’s economic and technological footprint.
For decades, the left peddled doomsday tales about energy. They claimed the world had reached “Peak Oil,” that oil and natural gas would have to be left in the ground, that burning them would cause the end of civilisation, and that windmills and solar panels were the only ways to avoid the apocalypse.
This was “settled science.” Paul Ehrlich, the Club of Rome, Al Gore and T. Boone Pickens all predicted this.
And yet today the U.S. is not only the world’s largest oil producer, it is the world’s largest oil exporter, this in a country whose production was continually dropping for decades, and who had legally banned exports in pursuit of reducing dependence on foreign oil. Today America hasn’t just achieved a long-elusive “energy independence” — it’s energy dominant thanks to technological innovation like the fracking revolution. And it achieved this while meeting and even exceeding its Paris climate goals.
And now President Trump seeks to use America’s energy dominance to replace Russia and OPEC as the key energy player in the world.
Beyond fracking the other technological innovation driving the world’s energy transformation is the drive to create a worldwide market for natural gas by building the LNG infrastructure to connect the world’s natural gas supply to global markets. Natural gas will no longer be stuck on the continent that produced it, transportable by pipeline across land, but stranded the moment it reaches tidewater.
Under Joe Biden’s “Green New Deal,” America’s natural gas boom was stopped in its tracks. Biden froze new LNG export terminal approvals, cutting off the possibility of expanding American reach in global markets at precisely the moment that Europe found itself desperately wanting to wean itself off Russian gas.
But President Trump has reversed the LNG terminal moratorium, because energy isn’t just an economic juggernaut — it’s a strategic weapon. America learned that the hard way in the 1970s when, for political aims, OPEC embargoed the West in 1973, and in 1979 the Iranian Revolution powerfully disrupted oil supplies — in both cases throwing the economy and the NATO alliance into chaos. As Rod Martin wrote, President Ronald “Reagan realized two could play that game, and teamed up with the Saudis to collapse oil prices, depriving Russian exports of profitability and bankrupting the Soviet Empire.”
Right now, the U.S. is pumping out 15 billion cubic feet of LNG per day. To put that in perspective, that’s enough to power Japan for two full days, every single day. The world’s third largest economy, Japan is wholly dependent on foreign energy. Its supply line runs 7,000 miles — 20 days at sea, one way — from the dangerous Middle East past hostile China. Japan’s alternative? Russia. Or at least those were the choices for Japan, Korea, Taiwan, and other allies until America, Australia and now, timidly, even Canada, made LNG production an economic and a strategic imperative.
Morgan Stanley projects U.S. LNG capacity alone will double by 2029. Why? Because the world needs gas, America has lots, Trump is turning it loose, and the market knows it.
And, a small parenthesis here, this search for global energy dominance is also a superior strategy to the one most of the West has been pursuing to reduce greenhouse gases. Instead of a pessimistic mentality that relies on government regulation to tell industry how to reduce emissions, using obstacles to production as their chief lever and accepting that this will ultimately lower our standard of living, this optimistic strategy relies on wealth creation and the technological innovation it unleashes and pays for to master the problem. It is worth noting that this is no Hail Mary pass. On the contrary, an optimism toward industry and technology is the strategy that has consistently allowed Western societies to meet and master challenges that other societies found insurmountable.
A clever Canada, also endowed with energy abundance, would make it clear to Donald Trump that it wants to work with him to make North America the world’s dominant energy power, relieving our partners in the Indo-Pacific from reliance on unstable supply from the Middle East, reducing Russia’s ability to finance mischief in Europe, and doing the world the environmental favour of enabling a massive shift from coal to natural gas throughout Asia.
Washington is blissfully unaware of the extent to which Canadian energy exports to the U.S. make America’s energy exports to the rest of the world possible. If America had to supply its own energy needs entirely from domestic production, instead of getting 4 million barrels a day from Canada, it would have to cut its oil exports nearly in half. At a time when the fracking revolution’s increase in U.S. oil supply may be tapering off, the oilsands’ exceptional longevity will be a real ace in the hole for Trump’s dream of world energy dominance.
Canada is blessed and cursed by its proximity to America, but we have little practical alternative to making the best of our relationship with an America that is not isolationist but, on the contrary, is seeking to escape from reliance on unwieldy alliances and act, as much as possible, alone and unencumbered on the world stage. This is what being Top Nation now means to them. If Canada can convince America that it is better as a reliable and committed partner inside the tent within an unencumbered North America, the 21st century will be neither the American nor the Canadian century, but the North American century.
If Canada sticks with a strategy of hostility and incomprehension towards Trump’s America, if we allow bureaucrats to continue to throttle our energy industry and we introduce carbon tariffs, if we continue to lag on carrying our share of the burden on defense and national security issues, then America will claim this century and we will settle into the low-growth impotent irrelevance that now characterises Europe. These are the choices Canada now faces.
Brian Lee Crowley is the founder and managing director of the Macdonald-Laurier Institute and the Center for North American Prosperity and Security.