It would be funny if it weren’t so serious.
First, Donald Trump invokes a 1962 measure on national security to impose global tariffs of 25% on steel and 10% on aluminum. It appears to matter not that Canada, its largest supplier of both, is an ally in the North American defence apparatus and an integrated element of the supply chain. No exemptions.
Then he tweets that his country has a trade imbalance in Canada’s favour. It appears to matter not that this is not the case. The balance sheet suggests a $20-billion American edge, including $2 billion in steel. Fake news, we presume.
He then pursues The Art of the Deal: We won’t get a better arrangement on steel and aluminum if he doesn’t get a better North American Free Trade Agreement. If we play nice, he will think about a break.
The Canadian response was very Canadian.
Our prime minister calls the tariffs “absolutely unacceptable,” the extra word in there clearly for emphasis to avoid any inference of a “somewhat” or “partly” unacceptable tariff. Our trade minister rejects the tethering of the tariff and trade pact. There, that ought to do it.
Our finance minister, pushed for clarity, promised Canada will “consider how to react based on the news that comes out.”
At the risk of falling into one of those “gotcha journalism” moments in which a quote is taken out of context, let’s look at how that news actually comes out.
According to the US Commerce Secretary Wilbur Ross, his boss is to be taken on his word—until it’s not his word.
When pressed about the absolute nature of the tariffs—no exemptions, that is—Ross told an interviewer over the weekend: “I just said what he has said, he has said. If he says something different, it’ll be something different.”
If today Canadians can feel Trump has gotten a bit into our grill, we can take solace that we are by no means alone. If anything, we appear to have been granted a grace period as the president degraded Mexico, China, North Korea, Africa, NFL players, a military widow, Gold Star parents, Steve Bannon, Alec Baldwin, Meryl Streep, CNN, NBC, the failing New York Times, Ted Cruz, Arnold Schwarzenegger, Barack Obama, and of course, Hillary Clinton.
We are today’s shiny object.
I asked a representative of exporters if perhaps the time had come to just let Trump see what his folly foments—namely, let the tariff take hold and watch US business and consumers pay the price. Bad strategy, I was told, because it would encourage other countries (namely China) to turn to Canada instead of the US as a dumping ground. Lose, lose.
No, what is evident is that we’re being beaten at a game we will now have to play. Justin Trudeau’s tolerance of Trump’s intolerance is no longer tolerable.
We have depended to this point on charming a bully, on the trade-promoting Republicans, on the mix of politicians and diplomats at the NAFTA table, and on basic common sense to keep the president from presiding over a mutually painful feud with what was until recently its largest trading partner.
We might now need the World Trade Organization, whose leader has counseled the president to walk back his remarks, which is a little bit like asking the bull to walk back from the red cape. But who’s to say Trump will even recognize the WTO?
Given that Trump tweeted that Canada is not treating American farmers fairly, does it mean the end of dairy supply management?
Given that he doesn’t recognize the imbalance of trade in his country’s favour, might we be rolling back the clock on certain tariff-free products?
Given that his trade representative believes time is running short on creating a new NAFTA, could we wind up with a bilateral US trade deal instead?
Given that Trump hates to lose, might we lose an independent dispute resolution mechanism?
Tune in tomorrow. Wilbur Ross tells us all may change in an instant. Then again, we may never hear another word.
