U.S. President Donald Trump is urging his allies in North America and Europe to the edge of a global trade conflict. Among those affected, Canada feels the pressure the most, confronting not only 25 percent tariffs on steel and aluminum but also additional general tariffs of the same rate. Canadian leaders are actively lobbying to prevent economic confrontation.
One of Canada’s significant proposals to the United States has received scant attention. Together with Helsinki, Ottawa aims to initiate a new era of American shipbuilding by constructing a modern fleet of icebreakers to help safeguard North America’s Arctic waters. However, Trump’s aggressive trade stance could jeopardize this initiative.
The president has repeatedly emphasized that asserting control over the Arctic is a crucial goal for his administration. He has pointed to the need to access vital minerals in the northern regions and to challenge Chinese dominance in the ice-covered waters as reasons to annex Canada and take Greenland.
Despite this rhetoric, Trump has inherited a strategy designed to enable the U.S. to access and secure the resource-rich Arctic without needing to extend its borders.
If implemented, this agreement could assist the United States in developing a new shipbuilding yard to produce the types of vessels its navy urgently requires. However, if the White House continues its trade dispute, these plans could be stalled.
In July, then-President Joe Biden announced the signing of the ICE Pact, a collaboration with Ottawa and Helsinki, “to work together on the production of polar icebreakers and other capabilities.”
Biden mentioned at the time that this deal would be vital for creating more icebreakers that are both better and cheaper. According to the administration, this initiative is crucial to “support the nation’s economic, commercial, maritime, and national security needs in polar regions.”
However, the U.S. is still significantly lagging. A 2023 report estimated that the U.S. Coast Guard would need approximately eight to nine new icebreakers to carry out its missions in both the Arctic and Antarctic.
“Are we where we need to be?” Adm. Linda Fagan, former commandant of the U.S. Coast Guard, remarked late last year at the Halifax International Security Forum. “The short answer is: We’re behind.”
During the winter months, Arctic passages necessitate heavy icebreakers to navigate and guide other vessels—whether commercial, scientific, military, or cruise ships. Even in summer, medium icebreakers are usually required for safe navigation. (Despite warming trends, it remains uncertain if or when Arctic summers will have days completely free of ice.)
Russia and China both possess a fleet of icebreakers capable of transporting cargo, research teams, and military assets through the Arctic. The size of this gap means Washington can no longer afford to ignore it. “We are behind as a nation,” Fagan added. “This isn’t just an Alaska issue. This is a U.S. sovereignty and defense matter.”
Although Canada possesses more icebreaker capacity than the U.S., the difference is minimal: it has only two heavy and seven medium icebreakers, with Ottawa currently working on replacing its aging fleet. (“Having more than one isn’t something to boast about,” Canadian Defense Minister Bill Blair, seated next to Fagan, quipped.) Finland has eight icebreakers, while Denmark and Sweden have several between them.
In contrast, Russia operates around 40 icebreakers, several of which are nuclear-powered. China, claiming to be a “near-Arctic state,” has three medium icebreakers and is in the process of developing a nuclear-powered heavy icebreaker. Both Russian President Vladimir Putin and Chinese President Xi Jinping have expressed their intention to collaborate more closely, including in the icebreaking sector, to open the “Polar Silk Road” through the Arctic.
“The increasing influence of competitors and adversaries in the Arctic is fueled by their rapidly expanding icebreaker fleets,” Paul Barrett, chief communications officer for Davie, told Foreign Policy.
Davie is the Quebec-based company responsible for designing and constructing Canada’s next generation of icebreakers, which are expected to play a central role in the ICE Pact initiatives.
“Despite ambitious shipbuilding plans,” Barrett stated, “the West is still greatly outmatched.”
Newly-confirmed Defense Secretary Pete Hegseth expressed similar sentiments. “We need to significantly enhance our capacity to build ships and submarines,” Hegseth remarked at a Brussels press conference. “This is not just for ourselves but to uphold our commitments to our allies as well.” He noted that “bloat” within the Pentagon has often delayed advanced systems for seven years or more.
As the race heats up to secure critical shipping lanes and strategic resources in the Arctic, bridging this capability gap is becoming increasingly urgent.
In 2013, the U.S. drafted plans to construct four to five new heavy icebreakers, followed by several medium-equipped vessels. Unfortunately, these ships have faced numerous delays and are not expected to enter service until at least 2029.
The ICE Pact was established to expedite shipbuilding, allowing for the production of more vessels at a lower cost.
Signed on the margins of the NATO summit last summer, the three nations finalized a memorandum of understanding in November. This agreement outlines how the countries can share sensitive, even classified, information regarding technical specifications for these ships, develop supply chains for their construction, and exchange trained personnel for the projects.
Canada already has several shipyards capable of building icebreakers, while Finland boasts a robust shipbuilding industrial base and leading companies—Wärtsilä manufactures some of the world’s most powerful engines, and Aker Arctic has extensive experience in designing and testing icebreakers.
In 2023, Davie Shipbuilding acquired Helsinki Shipyard, previously the world’s largest builder of ice-capable vessels. The shipyard had struggled in recent years, transitioning ownership from Russian companies to a private holding company. Western sanctions impacted its operations, especially following Russia’s full-scale invasion of Ukraine in 2022.
By purchasing the Finnish shipyard, Davie set the stage for a formal partnership between Canada and Finland, one of NATO’s newest members.
Given that Trump returned to office threatening to unleash economic turmoil on Canada and Europe—going as far as to suggest seizing territory in the north under the guise of national interest—the ICE Pact was seen as a glimmer of hope.
Both government officials and industry sources told Foreign Policy that Canada has been racing to implement the ICE Pact more quickly than originally intended.
“Trump was extremely interested in this ICE Pact,” Mélanie Joly, Canada’s foreign minister, noted at an event by the Montreal Council on Foreign Relations in December.
When Canadian Prime Minister Justin Trudeau and his finance minister visited Mar-a-Lago to meet with the president-elect in December—aiming to forestall a wave of tariffs that Trump had proposed—the icebreaker agreement was up for discussion. Joly recounted that Trump’s only concern was that the deal didn’t go far enough: “He wanted to ensure we would do more.”
Blair acknowledged that there are “some real challenges in shipbuilding across all our nations,” stating that the agreement would facilitate shared “capability and design” among the three countries. “We all feel a sense of urgency,” he added.
However, in late January, Trump altered his stance. In a briefing just days post-inauguration, he announced that the U.S. would be acquiring 40 new “big icebreakers. Big ones,” although he did not specify where these would come from.
Trump recast the ICE Pact as a disadvantage for the United States. “All of a sudden, Canada wants a piece of the deal,” the president told reporters. “I say, ‘Why are we doing that?’”
In reality, though, the ICE Pact could lead to increased production capacity within the United States.
This year, Barrett mentioned, “Davie aims to acquire an established U.S. shipbuilder, enhancing America’s capability to expedite the deployment of icebreakers and other specialized vessels.”
Coordinating efforts among the three countries—sharing investment, industrial capacities, designs, and technology—could initiate nothing short of “an American and Western shipbuilding renaissance,” he claimed.
Contrary to Trump’s assertion that Canada is benefiting unfairly from the arrangement, a Canadian official informed Foreign Policy that the ICE Pact presents a notable economic opportunity for the United States.
“One of the objectives here is to not only focus on the three ICE Pact partners but ultimately to create a broader market,” a Canadian official explained during a background briefing.
While Ottawa appeared optimistic about sidestepping a trade war, Trump nonetheless moved forward with plans to impose 25 percent tariffs on Canadian imports. The Trudeau administration secured a temporary 30-day reprieve from those duties only after intense discussions with Trump, only to confront an additional set of aluminum and steel tariffs, alongside the already looming 25 percent general tariff.
When asked in January about the potential impact of these tariffs on the icebreaker agreement, Canadian officials made it clear that economic measures would negatively affect virtually all aspects of the continental relationship—including those dependent on the closely integrated U.S.-Canada supply chains.
Delays or even a freeze on this shipbuilding initiative could impede efforts to exploit the natural resources made accessible by a warming Arctic, which is projected to contain up to one-fifth of the world’s gas reserves, alongside a smaller percentage of global oil reserves and a wealth of critical minerals.
Failing to establish an adequate naval presence in the north would also empower Moscow and Beijing to escalate their activities within the Arctic. Just last month, U.S. and Canadian fighter jets were deployed to intercept Russian jets flying in international airspace in the high Arctic.
Icebreakers represent the fundamental capability needed for accessing the Arctic, yet they are not the exclusive requirement. Last year, Canada introduced its Arctic foreign policy, primarily aimed at countering the increasing presence of China and Russia in the north. The policy outlines “a number of potential threats,” ranging from heightened Russian air activity in the area to dual-purpose Chinese “research vessels and surveillance platforms [employed] to gather data” in Arctic waters.
As Matthew Funaiole and Aidan Powers-Riggs of the iDeas Lab noted in Foreign Policy last year: “The ICE Pact marks a creative initial step in diminishing China’s shipbuilding supremacy.”
“This is something we must accomplish,” Ranj Pillai, premier of Yukon, stated to Foreign Policy. While icebreakers are critical to the foundation, he emphasized that projecting power into the Arctic—to counter foreign threats, protect essential infrastructure, and improve conditions for local inhabitants—will necessitate ports, bases, roads, fiber-optic cables, and additional naval assets such as submarines.
“There’s an opportunity here now,” Pillai remarked. “I believe we can accelerate our efforts.”
