Economy - Politics

Disgusted Canadian Prime Minister Has Had It With Trump And It’s Really Bad

Published on June 2, 2018 by Athena Pallas

Let’s start by noting that the only authority President Trump has to impose tariffs is for reasons of national security, yet Trump has just imposed steel and aluminum tariffs on Canada, Mexico, and the European Union, none of which are national security threats to the U.S. Viewing Canada in particular as a national security threat to the United States is so ridiculous as to be offensive, and Canadian Prime Minister Justin Trudeau has made it clear that Canadians are offended, that Canada will retaliate in equal measure, and that he continues to appreciate the American people as “partners, friends, and allies”, but thinks the Trump administration, on the other hand, betrays common sense. All of this spells a steep drop in the relationship between Canada and the United States, paralleling the drop in relationships with many U.S. allies due to Trump’s bullying tactics. According to The Atlantic:

 A visibly frustrated Trudeau responded almost immediately, saying Canada will impose tariffs against imports from the U.S. of steel, aluminum, and other products. “We are imposing dollar for dollar tariffs for every dollar levied against Canadians by the U.S.,” he said, adding the levies will take effect July 1 and will remain in place until the U.S. eliminates its measures against Canada…Trudeau seemed particularly aggrieved by the national-security grounds on which the Trump administration imposed the tariffs. He said Canada was America’s “most steadfast ally” in war and peace, calling the tariffs “an affront to the … thousands of Canadians who have fought and died alongside American comrades-in-arms.” But what he said next perhaps illustrates just how poor relations between the two neighbors have become. “In closing, I want to be very clear about one thing: Americans remain our partners, friends, and allies. This is not about the American people. We have to believe that at some point their common sense will prevail,” he said in the type of language that successive U.S. administrations have used to describe recalcitrant regimes such as Iran. “But we see no sign of that in this action today by the U.S. administration.”

On Friday Canada filed a grievance with the World Trade Organization over Trump’s tariffs, indicating the tariffs would undermine “the integrity of the global trading system”, according to The Hill. Trump twice issued temporary tariff exemptions to Canada, Mexico, and the E.U., seeking to hang those potential tariffs over the heads of these countries in order to strong arm them into doing as Trump wanted in trade agreements. For Canada and Mexico, that threat was attached to renegotiations of the North American Free Trade Agreement (NAFTA), which Trump wanted changed to be much more favorable to the U.S. Of course, that is not how mutually beneficial agreements work – they aren’t supposed to preferentially benefit one side, but that is lost on Trump. Canada and Mexico had originally entered into the renegotiations of NAFTA, created in 1994, with the plan simply to update the agreement to cover the growing digital economy, but Trump wanted extensive renegotiations. One thing Trump wanted that neither of the other two countries would likely agree to is a 5-year sunset clause, which would have forced NAFTA to be renegotiated every 5 years, injecting the kind of economic uncertainty the agreement is meant to prevent in the first place. Trump’s administration even cited the lack of progress in NAFTA renegotiations as a reason for imposing the tariffs on Canada and Mexico, rather than giving them a permanent exemption.

Of course it is unreasonable for Trump to be treating our allies this way. Previously Trump also has bragged about lying to Trudeau regarding Canada having a trade surplus with the U.S., yet Trump continues stating those lies. Just yesterday Trump tweeted, “Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?” It is actually the U.S. that has a trade and services surplus with Canada: $12.5 billion goods and services trade surplus according to The Hill, $8.4 billion according to The Atlantic.

What exactly is Trump accomplishing with these tariffs? It appears to be nothing good. The results are a possible trade war, which could cause prices to escalate, jobs to be lost, costs for U.S. manufacturers to rise, and U.S. export markets to shrink – a trade war hurts all those involved. The results do include definite harm to relationships with key allies. Canada has already indicated that they will impose retaliatory tariffs, dollar for dollar, in response. Trump’s tariffs will not force Canada and Mexico to renegotiate NAFTA on Trump’s terms. That may mean that Trump withdraws from NAFTA, as he withdrew from the Trans-Pacific Trade Partnership and the Paris climate accord, further isolating the United States on the world stage.

Trump continues to show in his bullying and his unilateral decisions that he doesn’t understand or appreciate the value of our allies. Trump expects the world to bend to his will, but that is not what is happening – Congress may just roll over and let Trump do whatever he wants, including misusing his power to impose tariffs on the basis of national security, when that is not the true reason, but other countries are showing that they will retaliate with their own tariffs and, increasingly, they will simply go around Trump to make trade deals with other countries. The United States keeps getting more and more isolated by Trump’s outdated protectionist trade policies, by his unwillingness to compromise for mutual benefit, by his bullying, by his lack of consideration for the consequences of his actions.

Featured image via Wikimedia Commons.