Are Fighter Jets Canada’s ‘Bargaining Chip’ in Trade Talks?

There’s something that the U.S. ambassador to Canada thinks could help with thawing frozen trade negotiations over President Trump’s tariffs.

And that is for Canada to continue with a deal to purchase American-made F-35 fighter jets from the company Lockheed Martin. The government began an audit of that deal after Mr. Trump imposed tariffs on Canada.

The review will assess if the new fleet remains compatible with Canada’s military needs and the protection of its sovereignty “in light of evolving geopolitics,” according to the defense department.

Sweden is keeping tabs on the audit. This week, during a state visit to Ottawa by Swedish royals that focused largely on security and defense cooperation, the country’s senior government officials doubled down on their sales pitch for another jet model, the Gripen, by Saab, a Swedish company. Saab was one of the two finalists for the fighter jet contract, which Canada ultimately awarded to Lockheed Martin.

The latest unsolicited bid for the Gripen jets would bring 10,000 jobs to Canada under a deal to build the planes here, Swedish officials and the chief executive of Saab, Micael Johansson, have said.

The outcome of the defense department’s military procurement audit will influence future trade talks, Pete Hoekstra, the U.S. ambassador, told an audience at a national manufacturing conference in Ottawa on Wednesday.

“We’re actually waiting to see exactly where the Canadian government is going to come out on this,” Mr. Hoekstra said.

The result of the F-35 fighter jet review seems to be catching the Trump administration’s attention more than Canada’s efforts to look for trading partners elsewhere.

“We don’t get upset when the prime minister talks about doubling the number of exports to countries other than the United States,” Mr. Hoekstra said. “Hallelujah. A strong Canada, a strong and prosperous Canada, is good for us,” he added, later using the metaphor of a neighborhood to drive home the point that a stronger neighbor in Canada benefits the United States.

He didn’t extend the metaphor to another situation looming over the neighborhood: anger about Mr. Trump’s suggestions that Canada become the 51st state. As my colleague Matina Stevis-Gridneff reported, Mr. Hoekstra did not appear to be swayed by Canada’s hurt feelings over the annexation threats.

[Read Matina’s story: U.S. Ambassador to Canada Channels Harsh Trump Tone]

Mr. Hoekstra’s comments are the latest development in the saga of Canada’s program to modernize the Royal Canadian Air Force fleet of CF-18 fighter jets with F-35s, which are stealthier when it comes to evading radars and attacking ground targets.

In 2010, the Conservative government of Prime Minister Stephen Harper committed to buying 65 jets from Lockheed Martin. But the procurement was met with both political resistance from the Liberal Party and criticisms over cost from the auditor general, an independent officer in Canada’s parliament.

The deal was canceled in 2015 under the newly elected Liberal government of the then prime minister, Justin Trudeau. But in 2023, Mr. Trudeau changed course and approved a deal worth 70 billion Canadian dollars, or $50 billion, to order 88 of the F-35 jets, with 16 already purchased but yet to be delivered.

[Read: After Decades of Atrophy, Canada Vows to Beef Up Its Military. Can It Deliver?]

“I don’t believe that we’ve had enough jobs created and industrial benefits done out of the F-35 contract,” Mélanie Joly, Canada’s minister for industry, told reporters in Ottawa this week.

“Ten thousand jobs is indeed a very interesting offer,” she added, referring to Saab’s proposal.

The United States will probably not react well should Canada accept that offer, said Philippe Lagassé, a professor at Carleton University in Ottawa who studies military procurement.

“There is an increasing expectation that American allies will buy American military capability,” Professor Lagassé said. He raised a question that has been on the minds of other analysts reflecting on Canada’s consideration of Sweden’s pitch: “Is it just being used as a bargaining chip?”

The tenor of the visit from Sweden, which included the royal family members, a business delegation, senior ministers and the signing of a strategic partnership between the countries, suggests to Professor Lagassé that something bigger might be afoot.

“There’s probably a lot more seriousness to this than in the past,” he said.

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