Defending the fortress (North America)

As published in Substack

In chess, a ‘fortress’ is an endgame strategy where the player with fewer pieces builds a stable, carefully coordinated, and unbreachable position. Even a player opposite with a material advantage is stymied. The game falls into an endless exchange of stalemated moves which, absent any mistakes, neither player can lose. This may be instructive in assessing Prime Minister Mark Carney’s comments about ‘Fortress North America.’

Carney surprised many when, in an early May speech to the Global Progress Action Summit, he declared: “Canada remains open to deeper integration [with the United States] including options for Fortress North America in selected sectors.”

Although he was clear that this was only one option ‘on the table’, and Canada had other alternatives it could pursue, it was the first time he endorsed the idea – at least publicly.

While Carney didn’t repeat the term in his prepared remarks three weeks later to the Economic Club of New York, he did so during a fireside chat afterwards: “It’s our strong view, and we’ve been clear about this, a ‘Fortress North America’ in autos, in steel, in aluminum – that’s in everyone’s interest.” This second reference garnered greater interest from trade observers, with some wondering if it signaled a major policy shift.

Critics of Fortress North America argue Carney is putting Canadian sovereignty at risk. They warn it could also undermine his goal of doubling non-U.S. exports and attracting billions in foreign investment. Yet there’s another view: Fortress North America is essential to diversifying our global trade and investment partnerships. Carney isn’t trying to enshrine protectionism but preserve Canada’s options and opportunities.

On sovereignty, it’s important to recognize ‘Fortress North America’ is not something U.S. President Donald Trump has proposed. In fact, when senior representatives of the Business Council of Canada met with Ambassador Jamieson Greer, the U.S. Trade Representative, he was explicit with us that it’s not a term or concept his president uses personally. He implied Trump’s vision for trade is more focused on ‘Fortress America.’

This isn’t a new problem nor one limited to Republican presidential administrations.

In May 2024, two years before Carney offered ‘Fortress North America’ as a solution for economic security, then-Defence Minister Bill Blair applied it to national security under the Biden Administration: “There is a natural tendency for them, quite understandable, that they want to take an approach which is somewhat like a fortress America. My job, our job is to make sure that approach instead is fortress North America.”

Blair suggested that to do so, Canada must “demonstrate to our closest ally, our dearest friends and partners, that we are committed to the defence of this continent and both of our countries. We do that through NORAD modernization, we do that for investments in the defence and sovereignty of our own North.” Whether Fortress North America is a Canadian creation, Blair’s blueprint for building it is now being adapted for trade.

Reviewing the text of Carney’s twin speeches to the Global Progress Action Summit and the Economic Club of New York, you can see echoes of Blair’s design: He set out to demonstrate to our largest trade and investment partner that Canada is committed to the economic security of this continent and both our countries, through USMCA modernization, investments in defence and the sovereignty of our own economy.

Distilled into a Carney soundbite: “Canada Strong will help make America great again.”

By specifying the ‘select sectors’ he wanted within the walls of a Fortress North America, Carney was further telegraphing his thinking. Steel, autos, and aluminum imports from Canada to the United States are all subject to section 232 tariffs, ostensibly to safeguard U.S. national security. White House officials have made clear their primary if not only national security metric are U.S. domestic manufacturing capacity utilization rates.

Carney has likely put on the table a ‘fortress’ which incentivizes U.S. manufacturing by limiting imports into North America in exchange for 232 tariff relief in those areas and USMCA renewal. The easy targets are dumped or subsidized goods, which can already be subject to countervailing duties under Canadian law. For other imports, there are a variety of tools available, such as harmonizing tariffs or imposing quotas and caps.

This take us to a discussion of auto imports from China and the broader question of how can you reconcile more trade with China with advocating for Fortress North America?

The answer, in part, was picked up by a ‘hot mic’ at the G7 leaders’ summit when Carney was overheard telling President Trump he put “a cap, we capped, a hard line [on autos]. I thought you’d actually like that” – to which Trump replied, “That’s good. I like that.”

The exchange highlights an important dimension of what Trump and Carney are trying to achieve: They both want more trade with China.

Fortress North America, then, isn’t a set of rules designed to minimize trade and investment from other countries but, rather, to manage trade and investment with them. Indeed, managed trade and investment is what President Trump went to Beijing to secure with sixteen U.S. CEOs in tow.

For Canada, the greatest risk has never been that Trump would ban any and all imports or investment from China into North America but that he’d impose a ‘do-as-I-say-not-as-I-do’ rule where imports and investment from China are welcome in the U.S. but prohibited in Canada and Mexico. A Fortress North America model creates a framework for ideologically consistent, if not necessarily identical, trade regimes for all three.

Since the Prime Minister’s own visit to Beijing in January, the Carney government has talked about establishing ‘guardrails’ on Chinese trade and investment. Those guardrails will be the walls of Fortress North America and vice versa. It’s likely no coincidence that Carney delivered his speech to the Economic Club of New York the same day Chinese Foreign Minister Wang Yi arrived in Ottawa for his first trip to Canada in a decade.

Returning to our opening chess analogy, one way to look at the current situation is to envision Prime Minister Carney playing two games at once. Across the board from either the United States or China, the G1 and G2 economies, Canada will always find itself at a material disadvantage.

Still, if he can establish a stable, carefully coordinated, mutually-reinforcing ‘fortress’ with both, Carney could position us so that Canada can’t lose.