The World Will Move On from Trump Tariffs. How Should a New Trading Bloc Show Up on Energy and Climate?

The “EU + 6”. The “Free 7”. Trump is the biggest loser, and the U.S. will hurt first and worst, as countries scramble for a saner global economy.

Trump can huff and puff, but that doesn’t mean he’s winning. Photo: U.S. Library of Congress/Unsplash, 2016

The astonishing thing about the last week is not that Donald Trump went ahead with his threat to blow up the global trading system by imposing tariffs on about 60 countries, including two economically mischievous islands populated only by penguins.

It’s that the rest of the world was so fast to push back, ready and determined to move on from an era of U.S. economic dominance.

That a promising approach to building a new trading bloc that bypasses the rogue regime in the White House has gone from online conversation to serious proposition in scarcely a week.

That if you survey the scene from just the right angle, a new, emerging bloc might be able to cover more ground and tackle multiple problems at once by pivoting to low-carbon goods and real decarbonization technologies.

And that Canada might yet place itself at the centre of this emerging new coalition of the willing, as long as our next federal government has the insight and inclination to play along.

In the last 100 or so hours we’ve seen a fast flurry of analyses on the slapdash, amateur-hour process behind Trump’s tariff announcement, the immediate impact on jobs, the shock reaction from global stock markets, and the apparent certainty that this spells the end of global trade as we’ve known it.

But there are more interesting, even hopeful and positive questions to ask, beginning with:

If every end is also a beginning, what’s next?

If the tariffs are really dealing a death blow to the established international trading system, what if this undercuts the fossil fuel industry as badly as Trump’s direct hostility and interference have devastated the U.S. renewable energy sector and climate justice community?

For Canada, now that we’ve declared that there’s no way back to an era when our economy was over-dependent on our neighbour to the south, what else do we gain by getting closer to countries that are farther along on their climate and decarbonization journey?

And how can we work with our future trading partners to accelerate the shift?

Sleeping Beside an Elephant

The roiling, ranting, manufactured crisis that Donald Trump has brought to our doorstep has communities, countries, and whole continents scrambling for solutions. So we might as well admit and embrace the reality staring right at us—Trump has created a moment when the sense of what’s “realistic” gets tossed in the air, when unexpected lines of thought suddenly make a whole lot more sense.

For Canada, that response begins with a level of unity and shared purpose that we haven’t seen in many decades. It extends into some serious, long-overdue conversations about how to make our economy truly independent. We’ve always known we were sleeping beside an elephant, as Prime Minister Pierre Trudeau told the Washington Press Club in 1969. But there’s been little serious talk about dialing up our economic relationships in other parts of the world sufficiently to dial back our dependence on the U.S.

Until now.

It was only about a week ago that I first saw Social Capital Partners Chair Jon Shell suggest a new trading bloc with the economic clout to survive, thrive, and leave the United States behind.

“We know what Donald Trump is afraid of,” he wrote on LinkedIn. “Now let's organize around it.”

The EU, UK, Canada, Japan, South Korea, and Australia (I'm now calling them "EU + 5") collectively have 760 million people and control 34% of the global economy and vast quantities of natural resources. We are an obvious threat to the U.S. and to China if we were to organize.

The best way to beat a bully is for the rest of the group to rise up against him.

The rest of Shell’s scenario is that much more plausible in the year when Canada holds the rotating chair of the Group of 7 forum of industrialized nations, and will be hosting G7 summits over the next few months.

The most powerful signal to give Trump would be for this group to meet in a very public way, ideally in Canada, so the meeting would play out on American TV in the right time zones. The stats on the economic and resource might of this new group would scroll across the bottom of Fox News. [If we can assume that Fox would even carry the story—Ed.]

A joint statement at the end pledging to work together as friends and allies to ensure a resilient and prosperous future for our populations would be a powerful message. Quick wins could be action on Ukraine and munitions manufacturing.

First and last, it needs to be 100% clear—and for Trump, spelled out with a Sharpie in simple, single-syllable words with lots of golf analogies—that no one is taking this lying down.

“My strong recommendation to Canada, Mexico, Japan, the United Kingdom, and the European Union is to join together to create a free trade zone that excludes the United States, imposing at least a 10% tariff on all imports from America,” writes Bill Clinton-era U.S. labour secretary Robert Reich. “Don’t negotiate. Do this now so you’ll be negotiating from a position of power.”

G7? Meet the ‘Free 7’ (By Comparison)

As Reich’s formula suggests, a useful add-on to Shell’s thinking would be to build on Canada’s relationship with its more reliable trading partner in North America by including Mexico in an EU + 6.

And by declaring an emphasis on clean energy and decarbonization trade, the countries could jump-start their economies after Trump’s tariff attack, boost affordability and local self-reliance across the entire bloc, support Ukraine’s reconstruction, and prevent military conflict in the first place—and oh, by the way, move closer to meeting their climate targets.

The focus on climate and carbon would be consistent with the accelerated priorities the European Union has been setting since 2022, when Vladimir Putin’s invasion of Ukraine turned energy efficiency and renewables into a geopolitical security strategy for countries that were too dependent on Russian gas.

And this general line of thought is quickly gaining traction. Within a week, the idea of a wider trading bloc had broken out from social media and Substack newsletters to general media in a Toronto Star post by John Austin, a nonresident senior fellow at the Washington, DC-based Brookings Institution. His formulation brings together the EU, Japan, the UK, Canada, Mexico, South Korea, and Thailand in a group of nations that “would dwarf the U.S., as well as the economies of China combined with its ally Russia.”

Given America’s new stance, now is the time for the G7 member nations to disinvite the U.S. from the group, and morph to a new organization: a “Free 7.” It would be a new forum in which the nations that still believe in democracy, free markets, freedom of expression, and free trade would collaborate to strengthen their collective hand and push back against authoritarians—which now includes the U.S.

The work of the new Free 7 would be the urgent task of building an international coalition that stands up to the authoritarian axis—and successfully contains it. This means standing up to pressure from the U.S.

Take this as a thumbs-up for the basic idea, not necessarily the branding Austin attaches to it. It would take a whole other edition of The Weekender (or more) to unpack what we mean by “Free” and how well or widely it applies to the countries in the group, certainly including Canada.

But the point of contrast with full-on authoritarians like Trump still makes a lot of sense—to counter the rush to fascism that we’re seeing in the U.S. and, if it goes this way, to reignite the response to climate change and the energy transition. That general line of thought makes South Korea an interesting addition to the group after an unequivocal population pushed back against an egregious assault on the country’s democracy—unlike their U.S. counterparts, who splintered in response to Trump’s 2020 election loss and the deadly insurrection attempt that followed.

Things Are Moving Fast

The sheer incompetence in the way the tariffs rolled out shows that it isn’t a good idea to run a massive dislocation of the global economy on ego, retribution, gut hunches, and ChatGPT or Grok.

The good news is that the global response has been far faster than Trump’s on-again, off-again rollout. And (set the bar low enough) pretty much infinitely smarter.

Trump’s response to the EU+ concept shows he was feeling the heat before he even made the announcement. “If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs (sic), far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” he ranted in late March, in what the New York Times politely cited as a “middle-of-the-night social media post”.

Of course, there’s just one possible response to that: As Jon Shell wrote last week, “time to get started.”

Particularly when so many other responses to Trump’s mob boss rule are beginning to produce whiplash in Washington. In the couple of weeks:

• People in all 50 states took to the streets yesterday, joining an estimated 1,300 local rallies in a massive Hands Off protest. Organizers in Washington, DC initially told the National Parks Service they expected 10,000 people at the Washington Monument, then upped their estimate to 20,000 on Friday night. On Saturday, police began closing off adjacent streets after the numbers swelled to 100,000 or more.

• The protests, along with the result of three special elections last week in Wisconsin and Florida, capture the state of U.S. public opinion before the tariffs bite. “In a few days’ time, every desirable consumer good will be dramatically more expensive in the United States than on world markets,” writes former George W. Bush speechwriter David Frum, in a post for The Atlantic titled Make Smuggling Great Again. “Flat-screen TVs, athletic shoes, video-game equipment, even household basics such as coffee, toilet paper, and soy sauce—all will soon cost 20, 25, 35% more than they cost on world markets.”

• The U.S. stock market has just gone through its deepest crash since the early days of the COVID-19 pandemic.

• The Federal Reserve Bank of Dallas is warning that Trump’s trade policies and assorted ravings will undercut the fracking industry’s expansion plans (yes, okay, they said it more gently), and experts elsewhere say tariffs could disrupt plans to expand U.S. exports of liquefied natural gas (LNG). Not a great return on the $219 million the fossil industry reportedly invested to bring their hired hand back to the White House.

“The administration’s chaos is a disaster for the commodity markets. ‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry,” one Texas fossil executive told the Dallas Fed. “Tariff policy is impossible for us to predict and doesn’t have a clear goal. We want more stability.”

Another exec complained: “The keyword to describe 2025 so far is ‘uncertainty’ and as a public company, our investors hate uncertainty.”

• China, ever ready to widen its clean energy lead every time Trump takes office and the U.S. falters, is declaring the energy transition “irreversible” and now expects to see its climate pollution peak ahead of its 2030 target date “due to the plunging costs of renewable energy,” Bloomberg reported late last month. Chinese electric vehicle giant BYD plans to double its overseas sales this year, to 800,000 vehicles, and analysts say U.S. auto tariffs will position Chinese EVs to “race ahead”, the Financial Times writes.

• Less than 100 days into his second term, Trump’s wrecking ball approach to America’s economy and its most basic institutions and guardrails has 75% of the country’s scientists ready to leave for Canada or the EU, according to a poll for the journal Nature. (And if any of you soon-to-be scientific expats are reading this, Canada is ready to offer you a warm welcome.)

“These are terrifying numbers, if true,” wrote U.S. blogger John Ellis. “Even if only 35% of the best young scientific minds in the United States are seriously considering living and working elsewhere, the numbers are still terrifying. Brain drain is always a disaster. Nothing good comes from it. The downside is enormous. And the more that leave, the more will follow.”

• And all along, global leaders who stand up to Trump are getting the kind of reward they crave, the positive reinforcement they understand best: from Canada and Mexico to Ukraine and France, “leaders across the world have seen a bump in their public approval since Trump came to office,” the Financial Times writes. Canada’s shift toward Mark Carney’s Liberal party has been by far the most dramatic, but Nathalie Tocci, director of Rome’s Institute for International Affairs, pointed to a wider trend.

“You have this bully that is smashing the system,” she told the Times. “Rather than just kissing the ring, these leaders basically stand up and politely say ‘no’, and their voters appreciate the fact that they are not being colonized.”

Time to Stand for What Matters

But in international trade relations, as in the fight against climate change, standing against what we can’t and won’t accept is just half the battle. The next successful trading bloc will only fulfill John Austin’s vision of a “Free 7” if we’re very clear and deliberate about the kind of economic activity we want.

In a Toronto Star op ed this week, Savanna McGregor, Grand Chief of the Algonquin Anishinabeg Nation Tribal Council, says Conservative Leader Pierre Poilievre’s “Canada First” National Energy Corridor doesn’t meet that standard.

Reading Mr. Poilievre’s announcement, I am left wondering why it does not mention Indigenous people even passingly, other than to expect fancifully that we give “approval … before any money is spent.” Surely he knows Canada’s constitution requires Indigenous consultation, accommodation, and ultimately consent to build major infrastructure inside his National Energy Corridor? How can there be consultation (to say nothing of accommodation and consent) if the corridor is “pre-approved” before anyone has the blueprints for what infrastructure will be built and where?

McGregor asks how city dwellers would respond to word of a “pre-approved” major development in their own back yard, with no indication of whether it’s a school, a shopping mall, or a radioactive waste dump.

It sounds ridiculous and contemptuous, yet this is exactly how Mr. Poilievre and many others hold Indigenous communities today (there is a radioactive waste dump on Algonquin land right now). Obviously, pushing a development decision without identifying the development would never fly in a city where the residents have no constitutional right to be consulted—so it definitely will not fly for Indigenous people having that right.

“Ironically, the pre-approved corridor Mr. Poilievre wants to speed development up would nearly paralyze it,” McGregor writes, citing court cases that would slow down a campaign promise that she describes as a “war with Indigenous nations”.

Then there’s the question of who gains if those projects are fast-tracked. In a separate post for the Star, Toronto Metropolitan University associate professor Shari Pasternak and Emily Lowan, fossil fuel supply lead at Climate Action Network Canada (of which Energy Mix Productions is a member), connect dots to some of the main movers and shakers in Trump’s inner circle. Which means that projects like the Prince Rupert Gas Transmission (PRGT) pipeline and the Ksi Lisims LNG export terminal “are now making Canada vulnerable to Trump’s predatory goal of North American energy dominance.”

Pasternak and Lowan write:

The solution is not to copy Trump’s “drill, baby, drill” approach with a thin gloss of maple syrup over top; it is respect for Indigenous jurisdiction and a just transition from fossil fuels to clean energy. Canadian pride should come from ethical investment and reconciliation—not backstopping U.S. corporations.

We’ve all heard the too-easy, too-glib line that a crisis is a terrible thing to waste. And once, just once, I wish the pundits and prognosticators who keep talking that way would turn their attention to the climate crisis and the fossil fuel industries that drive it. Or the nature and biodiversity crisis. Or the food security crisis. Or the multiple, wrenching human rights crises going on around the world as we virtually speak. No need to be fussy.

But here’s the thing so many of us have been hoping for—since the U.S. election result in November, and since around 8:10 PM Eastern last June 27, as we watched then-U.S. president Joe Biden implode onstage in his debate against Trump. Faced with the worst we’ve ever seen from Trump, the #ElbowsUp mantra is extending far beyond Canada, into a global coalition so wide that it might be able to withstand this moment, recover, thrive—and thrive green.

There are no guarantees, and it’ll take a while to see how things land. But the first step in building the solution we need is to envision it. And over the last week, that’s been happening.

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Mitchell Beer traces his background in renewable energy and energy efficiency back to 1977, in climate change to 1997. Now he and the rest of the Energy Mix team scan 1,200 news headlines a week to pull together The Energy Mix, The Energy Mix Weekender, and our weekly feature digests, Cities & Communities and Heat & Power.

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