For decades, the bedrock of North American prosperity was a relatively stable, integrated global market. However, the recent 2025–26 trade war between the United States, Canada, and Mexico—coupled with the lingering memories of the 2020 oil price collapse—suggests we have entered a volatile new era where economic policy is no longer about mutual growth, but about using trade as a blunt-force weapon.
We first saw the devastating potential of this shift on March 8, 2020. A breakdown in dialogue between OPEC and Russia over production cuts triggered a price war that facilitated a staggering 65% quarterly fall in the price of oil. In an event previously deemed unthinkable, the price of West Texas Intermediate (WTI) crude actually turned negative on April 20, 2020, as traders were forced to pay others to take over-supplied oil off their hands. This was not just a market quirk; it was a symptom of a world where the “Malacca Dilemma” and the “Hormuz Imperative” make every industrial engine vulnerable to geopolitical whims.
Fast-forward to February 1, 2025, and the tactics have evolved from production surges to universal tariffs. The U.S. administration signed orders imposing 25% tariffs on nearly all imports from Mexico and Canada, with a 10% levy on Canadian energy. The justification—stemming from concerns over fentanyl smuggling and illegal immigration—was described by critics as an “economic assault” on neighbors. Indeed, the Wall Street Journal editorial board went as far as to label it the “dumbest trade war in history”.
The fallout from these decisions is rarely contained within political borders. In 2020, the oil price war was a major cause of a global stock market crash. Similarly, in March 2025, the confirmation of tariffs saw the S&P 500 fall into a “correction” zone, losing over $4 trillion in value in a matter of days. For the average American household, these maneuvers translate to a projected loss of $1,200 in purchasing power as supply chains are upended and consumer prices for everything from electronics to produce begin to surge.
The human and political cost is perhaps most visible in the cooling of historically warm relations. In Canada, the rhetoric of annexation—moving from a perceived joke to a “deadly serious” threat—has fueled an unprecedented uptick in anti-Americanism. Provinces like Ontario and Quebec responded by banning American liquor and reviewing procurement contracts to penalize U.S. suppliers. Meanwhile, Mexico’s President Claudia Sheinbaum correctly noted that “problems are not resolved by imposing tariffs,” even as she successfully used 10,000 National Guard troops as a negotiation lever to secure temporary exemptions.
As we navigate the fallout, the lesson of 2020 and 2025 is clear: when trade is used as a hostage-taking tactic, the “victory” of a successful negotiation is often overshadowed by the permanent erosion of international confidence. Whether it is the 2020 oil glut or the 2025 tariff onslaught, these events prove that in a highly integrated world, you cannot sink your neighbor’s half of the boat without eventually going down yourself. It is time to return to the “cool heads” and “mutual respect” that President Sheinbaum championed, before the cost of disruption becomes a price no nation can afford to pay.