Playing the Indian Card

Sunday, June 10, 2018

Canada - US Trade War

Now Donald Trump has harsh words for Justin Trudeau. Harsher than the words he is prepared currently to use about Kim Jong-Un. Trump has called Trudeau “dishonest and weak.”

I can sympathize with Trudeau. His actual remarks, which set off the Twitter storm, were pretty much business as usual; they sounded familiar to any Canadian. Canada has been “insulted.” Canada would be “firm.” The US was being “unjust.” Trudeau as Canadian prime minister thought he had free license to poke the US in the eye whenever it seemed to be to his domestic political advantage, and the US, an indulgent big brother, would ignore it, swallow the insult, and look the other way.

The problem is, Trump has never been prepared to simply accept business as usual. As the US media has found out. Trump’s whole appeal is that there is going to be no more “business as usual.”

Canada’s advantage has always been doing a good job of keeping tabs on happenings down in the USA. If Trudeau’s government was really caught by surprise here, it is a stunning bit of incompetence.

It is not just Trump. His advisors Larry Kudlow and Peter Navarro were ready to immediately go on the US networks and use extremely undiplomatic language: “a special place in hell.” “Stabbed us in the back.”

Sure, they had license from above to talk that way. They were instructed to talk that way. But I don’t think they would have been so dramatic, public, and vocal if they did not themselves believe it. Americans are fed up with this sort of stuff. That’s why they elected Trump.

Time for Canada and everyone else to wake up and realize the game is over.

In a press conference, Trump has laid out his case: he is no protectionist. He is for free trade. He wants all tariffs and subsidies gone.

But what we have now is everyone else milking the US, getting free access to the US market, but then getting to set their own tariffs and subsidies. Trump cited a 260% (or something like that) tariff on US milk and dairy products entering Canada.

We all know about that, don’t we? Maxime Bernier ran against those tariffs. Yet Trudeau never mentioned them in his public comments.

If that is the position Trump presented to Trudeau during the talks—and I think we can assume that it was—you can understand his anger. Trudeau is falsifying the issue, and falsifying Trump’s position. It does indeed seem like “bad faith.”

Trudeau’s government can go two ways here: it can get involved in a trade war, with ever higher tariffs. Wrecking the Canadian economy, while possibly also somewhat inconveniencing the US. Or it can agree to cut existing tariffs. To the benefit of both sides, including all Canadian consumers.

Unfortunately, it has officially chosen the worse path.

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