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Everything Trump wants to do threatens everything Trudeau wants to do

Trump’s appointment for commerce secretary, billionaire investor Wilbur Ross, has railed against free-trade agreements.

Lucas Jackson/REUTERS

With Donald Trump's proposed cabinet now largely in place, Justin Trudeau's challenge is to limit the damage its members and their president threaten to inflict on Canada over trade, the environment, business competitiveness, China, even NATO.

That's not the public position, of course. At a press conference Monday, the Prime Minister confirmed that he had invited the president-elect to make a trip to Canada his first foreign visit after the inauguration, although "we're still working with the incoming administration to finalize it."

That visit could coincide with Mr. Trump's decision to reverse President Barack Obama's veto of the Keystone XL pipeline from Alberta to the Gulf of Mexico, which will be welcome news for the Canadian petroleum sector.

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But on every other front, the situation is grim. Mr. Trump's cabinet choices put Canada's economic and national security at risk.

Mr. Trump has reportedly chosen Rex Tillerson as secretary of state. The Exxon Mobil CEO negotiated a Russian Arctic production deal that made him beloved by Vladimir Putin.

Read more: Rex Tillerson is a life-long oil man who backs Keystone

Analysis: Russia doesn't mind impression that it has friends close to Trump

Richard Shirreff, the former deputy commander of NATO, warns that the Russian President may take advantage of disarray within the Western alliance to invade the Baltic states next year, claiming he is acting to protect Russian minorities. Far from warning Russia of severe consequences if it acts irresponsibly in Eastern Europe, Mr. Trump promotes reconciliation.

Mr. Trudeau has committed to sending troops to Latvia to bolster NATO's defences in the Baltics. Is Canada putting soldiers in harm's way even as the Americans retreat from their European defence commitments?

Mr. Trump hasn't protested Canada's meagre contribution to the North American Aerospace Defence Command (NORAD). Maybe he doesn't know. If so, here's hoping no one tells him.

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Closer to home, Mr. Trump wants to lower the business tax rate from 35 per cent to 15 per cent, which would eliminate the Canadian corporate tax advantage. On top of that, Canadian businesses face billions of dollars in new energy costs, because of last week's federal-provincial agreement to impose the equivalent of a national carbon tax. Mr. Trump's nominee to head the Environmental Protection Agency, Scott Pruitt, is openly skeptical of the science behind global warming, and intends to roll back many of the EPA's protections.

How will Canadian manufacturers that export into the United States remain competitive against such headwinds? Will those headwinds force Mr. Trudeau to reverse or at least weaken his government's commitment to fight climate change?

The Canadian competitive disadvantage will only worsen if Mr. Trump demands changes to the North American free-trade agreement. His nominee for commerce secretary, Wilbur Ross, has railed against free-trade agreements that both men believe discriminate against American firms. How will the Liberal government defend Canada from new and punitive American trade measures?

Oh, and the nominee for labour secretary, Andy Puzder, dislikes the minimum wage. So expect a growing wage gap between American and Canadian workers.

Challenge could turn to opportunity, if Mr. Trump continues his confrontational approach toward China. On Fox News Sunday, the president-elect delivered a clear warning: "I don't know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade … I don't want China dictating to me."

Mr. Trudeau has made improving Sino-Canadian relations a priority. A hostile U.S. could move the Communist government to sign a free-trade agreement with Canada on terms favourable for this country.

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But if Ottawa gets too close to Beijing, this could prompt retaliatory measures from the Americans. And in any case, a trade war between the world's two largest economies is bound to be bad for this trade-dependent nation.

To sum it up: Everything Mr. Trump wants to do threatens everything Mr. Trudeau wants to do. Pierre Trudeau said that being next to the United States is like sleeping with an elephant. Justin Trudeau must cope with an elephant that's gone rogue.

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