A long time ago, well before the name Donald Trump elicited triumphant cheers or the angry gnashing of teeth, the man who would become president of the United States was selling economic nationalism as the country’s best path forward. 

“If the United States were a corporation, it would be bankrupt. It’s losing $200 billion a year. For years now, it’s been losing that,” Trump said during an episode of CNN’s Larry King Live show in 1987, using an argument for tariffs he would repeat, nearly verbatim, 40 years later. 

Then, as now, Trump saw trade deficits as a critical financial crisis that was the result of the United States being taken advantage of on the international stage.

“I believe it’s very important that we have free trade,” Trump told a caller from Canada during that Larry King show. 

“But we don’t have free trade right now because if you want to go to Japan or you want to go to Saudi Arabia or various other countries, it’s virtually impossible for an American to do business in those countries. Virtually impossible.”

• Watch the full documentary, “The Second Term: Project 2025,” from The Fifth Estate on YouTube from 1 p.m. Friday and at 9 p.m. Friday on CBC-TV.

Trump’s bellicose views on trade, tariffs and international relationships did not emerge out of the blue. Rather they are in keeping with ideas he has expressed since at least the 1980s, and are now buttressed by a cadre of allies and supporters who share his view. 

A decade after that appearance on Larry King’s show, Trump had not changed his tune.

“You try and sell an American car in Japan,” Trump said to NBC’s Tim Russert in 1999. “The boat is sitting there 40 weeks as they’re trying to get the first car off the boat. I mean, they’re just ripping us and they’re ripping us big league.”

At that point, Trump’s wrath was aimed at Japan. Canada, he said, was a great friend of the United States. 

“I support anything having to do with Canada because I think they’ve been one hell of a good ally,” Trump told a Canadian caller, who asked if the billionaire would support the deal that would become the North American Free Trade Agreement.

“The Canadian people are wonderful people, and they’re with us 100 per cent, as opposed to many other people in the world.”

Targeting Canada

Trump’s view of Canada changed when he first became president in 2016. Calling NAFTA “a nightmare,” his administration pushed for a renegotiation of the deal in 2018.

Today, as president of the United States for the second time, Trump has Canada squarely in his crosshairs. 

In Trump’s version of events, Canada is taking advantage of the U.S. through an unfair trade deal — the one Trump himself negotiated in 2018 — and he is threatening a trade war using high tariffs as his primary weapon.

“Without the U.S., Canada doesn’t really have a country,” Trump said on Feb. 9 from the cabin of Air Force One while enroute to the Super Bowl. Canada, he repeatedly claimed, has been unfair to the U.S. It should become the 51st state and the prime minister should be its governor. 

Chief among those close to Trump who share his views on tariffs is his longtime trade adviser Peter Navarro. 

A tariff hawk and evangelist for the false claim that Trump did not lose the 2020 presidential election, Navarro rejects what he calls an “ivory tower academic” free trade orthodoxy that sees tariffs as an impediment to economic growth.

Free trade has pushed American manufacturing overseas and allows “multinational corporations to maximize their profits by minimizing their labor and environmental protection costs,” Navarro wrote in his article “The Case for Fair Trade” in the controversial conservative presidential playbook Project 2025. 

“Our skies and water may be cleaner and our products may be cheaper, [but] Main Street manufacturers and workers bear the brunt of these policies.”

Economists say tariffs don’t work the way Trump suggests they do because they are not paid by governments. 

“A tariff is essentially a cost that is to the importer by the government of that country for bringing a product across the border,” said Pedro Antunes, chief economist at the Conference Board of Canada. 

The tax on imports, he said, is not paid by the country where the exported goods come from, but by the importer who passes it on to consumers in the form of higher prices.

“In some cases, tariffs are applied essentially to build up a nascent industry. But in most cases, they’re just because we don’t want to buy too much of a good that’s more competitive, more productive,” Antunes said.

For example, Canada’s dairy industry is protected by a complicated system of quotas and tariffs, built into the Canada-U.S.-Mexico Agreement (CUSMA), the renegotiation of the North American Free Trade Agreement. It has been a point of contention for some trade partners, including the United States, which imposes its own selective tariffs on dairy. The U.S. won a CUSMA trade challenge against Canada in 2022 over how those tariffs are applied.

Antunes also said that the U.S. trade deficit with Canada — an accounting statistic that means the U.S. has purchased more from Canada than Canada has from the U.S. — is not a negative.

While Trump sees the deficit as a loss, like a corporation losing money, Antunes said it means that American companies are simply buying products at the most competitive price, which happens to be available from Canadian vendors.

Energy biggest component of trade deficit, Statistics Canada says

Trump’s often-quoted number of the U.S. having a trade deficit of more than $250 billion with Canada is misleading. 

The U.S. trade deficit with Canada was around $63 billion US in 2023, according to the U.S. Census Bureau. Neither U.S. or Canadian data puts the U.S. trade deficit as high as the $250 billion.

Statistics Canada says 65 per cent of the U.S. deficit is from purchases of Canadian energy, mostly oil and gas from Western Canada. If those energy imports are removed from the equation, the annual deficit drops to around $23 billion US.

Like Trump, Navarro also regards a trade deficit as a problem and sees tariffs as a shield to protect American businesses and an incentive for manufacturing to return to the U.S. from overseas.

Although the American economy is strong by the metrics of its GDP and stock markets, working class Americans have felt the sting of inflation and rising costs of living for years. The message of a return to the days of plentiful, high-paying manufacturing jobs helped build Trump’s support among blue-collar voters. 

“America is the globe’s biggest trade loser and a victim of unfair, unbalanced and nonreciprocal trade,” Navarro wrote in his Project 2025 article, echoing the same language Trump has used for decades and on the campaign trail.

Praise from Trump supporters

Navarro has been praised by Trump supporters, including influential figures like Michael Flynn, a retired lieutenant-general who was Trump’s national security adviser for 22 days during his first administration before resigning after he lied about conversations he had with Russian officials.

“When we look back at the four years that Donald Trump was in office — this is the guy who was standing there, behind the scenes, making a lot of these, particularly these trade agreements,” Flynn said of Navarro in 2023 at a pro-Trump event in Miami.

On stage, Navarro made false claims about the COVID-19 pandemic, vaccines and the 2020 election. Navarro was sentenced to four months in a federal correctional institution for refusing to obey a congressional subpoena to testify about his role in planning efforts to overturn Trump’s 2020 election loss.  

During the Miami event, Navarro also beat the drum of economic nationalism, protectionism and tariffs. 

“The boss loves tariffs,” he said, referencing Trump. “I wrote more executive orders than you can shake a stick at, making sure our government only used American steel, American aluminum, American parts.”

There are conflicting narratives around how Navarro became part of Trump’s inner circle. Media reports say he came to Trump’s attention early in his first term after his son-in-law, Jared Kushner, found one of Navarro’s books on trade on Amazon.

‘Happy to help in any way’

But in his 2021 book In Trump Time, Navarro tells a different story, saying he and Trump had been communicating for years. Navarro said he first reached out to Trump — whom he called DJT and “The Boss” — in 2011 after Trump praised one of his books. 

“So it was that when DJT announced his candidacy, I was not only one of the first to predict he would sweep the Republican field and likely win the presidency, I also let him know that I would be happy to help in any way.”

However they came together, Narvarro has been an active supporter of Trump and the aggressive protectionist policies favoured by the president. 

In Project 2025, Navarro wrote that Trump was stymied in his first term as “key policy advisers and cabinet officials clashed on the issues of international trade.”

“Too much of his trade policy was disrupted or derailed by key personnel who did not share the president’s vision of fair, balanced and reciprocal trade,” he wrote. 

Early in Trump’s second term, there appear to be no debates between rivals in his cabinet. 

‘Share his way of thinking’

“People like Peter Navarro and [Treasury Secretary Scott] Bessent and [Commerce Secretary Howard] Lutnick, who are now his top appointees, are there because they share his way of thinking, not because he’s learning from them,” Jeff Ferry, chief economist emeritus at the Coalition for a Prosperous America, a Washington, D.C.-based think-tank, told The Fifth Estate.

“Tariffs and other trade policies like that are essential for the U.S. today,” Ferry said. “For our economy to grow and to help … basically the bottom 50 per cent of our workers who are often in direct competition with workers in these poor countries, we need some form of insulation, and that’s called tariffs.”

Navarro is not the only pro-tariff voice in Trump’s inner circle. Lutnick, whose position is more influential than Navarro’s, also echoes Trump’s trade grievances and hails tariffs as the solution. 

“We are treated horribly by the global trading environment. They all have higher tariffs, no-tariff trade barriers on subsidies,” Lutnick said during his confirmation hearing. “They treat us poorly. We need to be treated better. We need to be treated with respect. We can use tariffs to create reciprocity, fairness and respect.”

The movement behind Trump, including the authors of Project 2025 — which included Ferry’s think-tank, Navarro and dozens of others — often represents an array of competing views on a host of issues, including trade, said California-based author and investigative journalist Katherine Stewart.

But those diverse voices are now all singing the same song, she said. 

“This movement includes a lot of different groups, and some of them have very different interests and agendas in mind, but they’re all kind of, for now, rowing in the same boat as it were,” said Stewart, whose recent book Money, Lies, and God: Inside the Movement to Destroy American Democracy examines the inner workings of the Trump movement. 

Trump’s initial threat of 25 per cent on all Canadian imports was set to go into effect on Feb. 1, but he delayed implementation after Prime Minister Justin Trudeau promised retaliatory tariffs in return, as well as making a commitment to appoint a “fentanyl czar” to tackle drug trafficking at the Canada-U.S. border.

The Canadian promises of enhanced border security were effectively an announcement of a $1.3-billion plan to beef up border security. While the fentanyl czar is a new position, Canada is not a major source of fentanyl trafficking, according to the U.S border services own data.

Trump’s tariff threats are already appearing to have an impact in the United States. 

Becca Balint, Vermont Democratic state representative, said utility companies in her state — which imports electricity from Canada — are already raising prices in anticipation of a trade war.

And in Tennessee, the Travel Alliance Partnership said tourism has already taken a hit. Canadian travellers to the state have declined as much as 30 per cent as Canadians opt to buy Canada and vacation elsewhere. Forbes magazine reports even a 10 per cent reduction in Canadian tourism could cost the U.S. more than $2 billion in lost revenue.