The Trade War Is Now Fought Province by Province

In January, the U.S. Treasury Secretary stood in front of cameras and invited a Canadian province to leave its own country.

I think we should let them come down into the U.S., and Alberta’s a natural partner for the U.S. — Scott Bessent

Scott Bessent wasn't speaking to Ottawa. He was speaking to Alberta, as if the federal government in between didn't exist. And he wasn't freelancing. State Department and Treasury officials had already held secret meetings with the Alberta Prosperity Project, a separatist group, discussing a $500 billion U.S. line of credit to bankroll secession ^[1]. This week Trump named provinces individually, proposing to rename Lake Ontario and writing off the province's business entirely ^[2].

The United States is giving serious consideration to changing the name of Lake Ontario to Lake America in that we don’t expect to (be) doing much business with Ontario any longer. — Donald Trump

That's the pattern on one side of the border. Washington has stopped treating Canada as a single negotiating partner and started treating it as a collection of provinces to be courted, pressured, or written off one at a time. The provinces have answered in kind. Ontario Premier Doug Ford proposed a 25% surcharge on electricity exports to the U.S., and he was explicit about the design — the target was swing states like New York, Michigan, and Minnesota ^[3].

Nothing should be off the table. — Doug Ford

That's not a trade measure aimed at Washington's negotiators. It's a province aiming a lever at American voters. Ontario spent $75 million on ads voiced by Ronald Reagan's 1987 recordings, targeted at Republican-held districts, with Ford describing the goal as splitting the party's factions ^[4].

I see foreign countries now, that we are doing really well with, taking ads, 'Don't go with tariffs.' — Donald Trump

The province passed a Buy Ontario Act ordering public bodies to buy from Ontario suppliers first, other Canadians second, and international firms only as a last resort ^[5]. Ford has hosted consular roundtables with 16 nations and planned trade missions to the Middle East, Asia-Pacific, and South America, all to cut a 72% dependence on the U.S. market ^[6]. A province is running a foreign policy. Cross the border and the same thing is happening from the other direction. New York state and city launched a "New York Loves Canada" discount tourism campaign to win back Canadian visitors after a 26% drop ^[7]. Oregon watched Canadian tourism fall 32% ^[8]. British Columbia and Washington State set up a formal interparliamentary group in January, with legislators on both sides citing shared frustration with their federal governments ^[9].

When you get right down to some of the things that are happening at the federal level, we both face similar challenges, so it’s something that we have common ground on. — Rick Glumac

Border states and provinces are building their own channels because the federal relationship has stopped serving them. All of this has been building for months. What changed this week is that every layer moved at once — Trump renaming a lake to sever a province, Ford aiming a surcharge at swing states, New York courting Canadian tourists — while the two federal governments had no negotiation scheduled between them. The federal track that once existed is gone: Trump and Carney negotiated a trade framework in June 2025, and by July it had collapsed into a tariff spiral with 50% duties and no active deal-making ^[10]. Here's why the patchwork will outlast any future agreement. Provincial liquor boards banned American products from their shelves, and Manitoba's premier told consumers to keep boycotting even if the bans lift.

For American whiskey producers, this remains unfinished business. — American Whiskey Association

Ottawa can sign a deal. It cannot make a provincial liquor board restock, or make a Manitoba shopper reach for Kentucky bourbon again. And the province Washington has been courting hardest for secession — Alberta — is simultaneously the one pushing hardest for deeper trade within Canada, its energy minister arguing that a closed market makes internal trade more urgent ^[11].

When one of those markets becomes shut down, then it becomes even more important that we trade amongst ourselves. — Dale Nally

The governments that would sign any deal are no longer the ones setting the terms of this relationship.