The Trade Wars

 

I cannot vouch for its accuracy, but I hear reports that, in response to Trump’s new “reciprocal” tariffs, at least seventy nations have offered to cut their own tariffs and restrictions in order to have them removed or reduced. And only two nations have responded so far with retaliatory tariffs: China and Canada.

Until now, the US has looked on Canada, if they thought of us at all, as their best friends. Cousins across the border.

I’m afraid we are revealing ourselves as secret enemies.

Shame on us.

Sunny Ways

 

Pierre Poilievre is caught in the Erin O’Toole trap. He has taken roughly the same position on the Trump tariffs as the Liberal government. If this remains the dominant issue in an election, he has given the Canadian public no reason to vote for him. If the agenda is going to be hostility and retaliation, the Liberals are more convincing; since Poilievre is ideologically aligned with Trump. He loses. At the same time, by agreeing with the government, he begins to look squishy, like controlled opposition; not decisive like Trump. Poilievre’s Conservatives and Farage’s Reform in Britain risk seeming unexciting by comparison.

It is bold and would take iron nerve, but what Poilievre should have done, and perhaps could still do, is to show leadership: explain the real situation to the Canadian people. We cannot win a trade war with the US. Whether we like the tariffs or not, an angry reaction is suicidal.  And to be honest, Trump has a point. We have been imposing quotas and high tariffs, on, for example, eggs and dairy products. We need to announce our readiness to put these on the table. Poilievre needs to point out that the result will be beneficial for Canadians as well as our American cousins.

And he can go further: far from objecting to the offer of statehood—a rejection which is an egregious insult to the USA, when none need have been taken by Canada from the offer—we will helpfully hold a Canada-wide referendum on the issue. Trump is welcome to make his case directly to the people, and we will freely choose. Why would any patriotic Canadian not want this?

It is the Canadian tradition to be polite and to compromise; to seek friendship with all. It is a perversion of the Canadian spirit to be rude and dismissive of our closest friend and ally.

Sunny ways, my friends, sunny ways.

The Conservatives might take an immediate hit, in the current atmosphere of hysteria. But very soon, I expect the Canadian public to sober up and realize that retaliation is a disastrous tactic. Doug Ford’s debacle with his electricity surcharge shows the way.

Explaining Trump's "Erratic" Tariffs on Canada

 

Of course the Trump tariffs are not about fentanyl. Trump needed to declare an emergency to give himself the power to impose tariffs. Fentanyl and terrorists crossing the border are perhaps a real concern, but they are not the main issue. They are rather the legal justification.

It is also not about forcibly annexing Canada. This is what the Canadian left wants you to believe; this is a straw man argument. Trump has publicly ruled this out. He is issuing an invitation to join the US, which is quite a different matter. Is a man proposing to a woman forcibly annexing her?

An interesting piece from the New York Times, posted on Facebook by Warren Kinsella, claims that in his phone calls with Trudeau, “President Trump laid out a long list of grievances he had with the trade relationship between the two countries, including Canada’s protected dairy sector, the difficulty American banks face in doing business in Canada and Canadian consumption taxes that Mr. Trump deems unfair because they make American goods more expensive.”

So the problems are Canada’s supply-side management over dairy, chicken, and eggs; our restrictive banking regulations; and the GST. Probably also the carbon tax. All things we, as Canadians, should want to abolish. Eliminating them would make our lives better—especially for the poor.

Ordinary Canadians should support Trump against our own government on these issues. This looks like a case of patriotism being the last refuge of a scoundrel.

To be fair, the piece goes on to suggest Trump wants to tear up the 1908 boundary treaty. But this makes no sense; that treaty did not change the boundary, but dealt with how to survey and mark it more clearly. Nor would it be worth Trump’s while to upset the applecart for some island in Passamaquoddy Bay, or Port Roberts. If he is suggesting border treaties can be renegotiated, this looks like just another pressure tactic.

Trump wants fair trade.

How to Respond to the Trump Tariffs

 

Daniel O'Connell achieved Catholic emancipation by following the Gospel
advice to "turn the other cheek."

A friend has asked me what I would do in response to Trump’s tariff threats were I the government of Canada.

Making threats, talking tough and retaliating with counter-tariffs is insane. Canada is sure to lose in a trade war. I fear Ford and the Liberals are actually prepared to destroy Canada for the sake of getting themselves re-elected one more time.

This is a perfect example of where Jesus’s advice to turn the other cheek applies. When one is dealing with an opponent of overwhelming superiority, the only hope is to appeal to their conscience. Luckily, Americans have a good conscience and are already well-disposed to Canada.

1. Call Trump’s bluff in a dramatic fashion. Declare a referendum, to be held in a year, on Canada joining the US. As a government, stay strictly neutral, if you cannot openly favour the idea. Do nothing to restrict American money or influence from getting involved in the campaign.

The referendum would almost certainly fail: current polls suggest only 10-15% of Canadians would support annexation. If it passed, I doubt the Americans would let us in anyway. And if they did let us in, frankly, not a problem. They’re a democracy; we’d be fine.
The referendum campaign would, one hopes, inspire a lot of American speakers and opinion leaders to talk up Canada, in hopes of getting Canada to vote for annexation. And this would influence other Americans to be more sympathetic to our plight. Overall, this will impress on the Americans that we are love them, are a part of them, not “other.”

And it would make many Americans feel responsible for letting us down if they refused us entry. We would be building moral capital.

2.       A charm offensive. Enlist a real “Team Canada” of Canadian celebrities with a large following in the US, and ideally cachet with Trump’s base, to go on talk shows and podcasts talking about how close Canadians and Americans have always been. And about growing up in Canada. Comedians are especially good for this, because people generally love anyone who makes them laugh, and Canada has many comedians popular in the US. We want to win the hearts and minds of the American public. We want them to identify with us and our lives, to see us as the same as Americans, growing up with Captain Kangaroo, the Muppets, and so forth, admiring American culture. Maybe pining for things they had in America that we did not get.

We should also develop our own ads, tugging at the heart-strings, with swelling music and nostalgic video clips, reminding Americans of times when Canadian hockey fans sang the American national anthem, when Newfoundlanders welcomed stranded American air passengers, when the Canadian embassy in Iran sheltered American diplomats, scenes of fighting together in Afghanistan, Korea, WWII, WWI; sharing joy at VE Day. How baseball, football, and basketball all have Canadian as well as American roots. There’s a lot of material available.

3. Regardless of Trump or the Americans, we ought to want to stop all fentanyl traffic and keep terrorists out. Canadians are dying. We should immediately offer to set up a high-level joint task force with the USA, like we once did with NORAD.

The Americans also want us to spend more money on defense; but this is also in our own national interest, and our NATO commitment. We need to be able to defend our Arctic. Why fight over it? Let’s do it.

4. Trump goes on about the trade deficit. There are a number of major “trade irritants” the Americans have long complained about. But what they want is actually, in many cases, also what is best for Canadians. Our own government, pandering to special interests, is the problem. They are suckering us by appealing to patriotism, the last refuge of a scoundrel.

a.       We should want to drop “supply management” for dairy and eggs: it is not just unfair to US farmers, it is a cruel levy on the Canadian poor, a huge transfer of wealth from the poor to the rich.

b.       We should lift restrictions on US investment in Canada. These are good for a few oligarchs, because they limit competition. But refusing investment is obviously bad for the Canadian economy, hobbles job growth, limits choices, and raises prices. We should have the courage to compete openly in the entire North American market.

c.       We should end all “Canadian content” regulations. Americans see these as unfair trade practices, and in the age of infinite information over the internet, they are unenforceable, intolerable restrictions on freedom of speech, and only cripple Canadian media outlets in the market.

d.       We should limit the use of any Chinese parts in Canadian manufactures resold on to the US market. It is more in our interests than in those of the US to ensure that anything labelled “made in Canada” is actually made in Canada.

e.       We should stop subsidizing any companies or industries. Any such subsidies are trade irritants. They look like unfair competition to the Americans, because they really are unfair competition. They are also almost guarantees of graft and government corruption, distorting market forces, and transferring wealth from the poor to the rich.

We probably don’t want to do all this unilaterally, instead of holding them back as bargaining chips in trade negotiations. But we should be negotiating right now: on the 25% tariffs. Throw some meat on the table as an immediate offer in exchange for removing these tariffs.

By doing all this, we will win the American public over to our side. And they will also see thir prices rising due to tariffs. Together, these should make keeping the tariffs on politically unsustainable for an American government.