Middle powers like Canada, Germany, and Brazil are caught in an escalating geopolitical vice. As protectionist sentiment in Washington creates new trade barriers, middle powers face growing pressure to seek alternative markets. However, reflexively pivoting toward Beijing carries significant strategic risks. China currently holds a near-monopoly on critical mineral processing, controlling over 90 percent of global battery-grade graphite and rare earth elements. Trading economic reliance on the United States for strategic dependence on China does not deliver autonomy; it merely exchanges one vulnerability for another. The true, sustainable off-ramp for middle powers lies across the Atlantic by deepening strategic trade partnerships with African economies. Long relegated to the periphery of Western foreign policy or viewed through the outdated lens of foreign aid, the African continent is undergoing a massive structural transformation. Driven by the African Continental Free Trade ...
President Trump’s tariff strategy, aimed at revitalizing American manufacturing, continues to spark debate across economic and political circles. While the intent is clear, the broader implications raise important questions about its alignment with long‑term economic trends.
The U.S. manufacturing sector has steadily shrunk over the past five decades, falling from 23% of GDP in 1970 to just 9.7% in early 2025. Job losses have followed suit, prompting concern among policymakers and workers alike. Yet this decline is not unique to the United States—similar patterns are evident in Canada, Germany, and Japan.
Economists point to a natural evolution in advanced economies: agriculture gives way to manufacturing, which is eventually overtaken by services. In the U.S., the service sector has expanded from 71.8% of GDP in 1997 to 83.7% in 2025, driving employment growth and contributing to a low unemployment rate of 4.1%. While this figure suggests economic strength, it also signals potential inflationary pressure due to tight labor markets.
Certain industries—such as steel, agriculture, and pharmaceuticals—carry national security weight. However, targeted investments and regulatory reforms may be more effective than blanket tariffs. Canada’s post‑pandemic vaccine strategy, which relied on coordinated public investment rather than protectionist measures, offers a compelling case study.
Tariffs often come with unintended consequences. The U.S.–China trade tensions between 2018 and 2020 led to an estimated $48 billion in added costs for American consumers and manufacturers in 2019 alone, according to the Federal Reserve. These figures highlight the ripple effects on domestic supply chains and consumer prices.
Beyond economics, tariffs risk straining relationships with key allies. Canada, for instance, may respond with reciprocal measures, potentially harming industries on both sides of the border. Trade disputes can also spill into broader foreign policy arenas, complicating international cooperation.
The evidence suggests that embracing the service economy while selectively supporting strategic manufacturing sectors may offer a more sustainable path. This approach aligns with economic realities while preserving diplomatic goodwill—particularly with close partners like Canada.
By Farshid Keramat
Editor’s Note: This article is a condensed policy digest. The full, unabridged analysis was originally published by The Hill Times. You can read the complete article here.
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