A 25 percent tariff on Canadian aluminum is an act of self-harm — economic self-mutilation — by the United States.
President Trump’s announcement on Monday that he was raising tariffs on all imports of steel and aluminum to 25 percent was all too familiar to Canadians, and to me, personally.
In 2018, when I was Canada’s foreign minister, the United States — our longtime friend, neighbor and military ally — imposed unjustified tariffs on Canadian steel and aluminum under a flimsy and frankly insulting national-security pretext.
Now, just four weeks into his second term, President Trump is once again upending the global trading order. First, he targeted America’s trade treaty partners Canada and Mexico with sweeping 25 percent tariffs, from which we have received a temporary reprieve. Days later, he imposed steel and aluminum tariffs on us and the rest of the world.
I saw this coming. As deputy prime minister and finance minister, I understood the threat posed by Mr. Trump’s aggressive economic nationalism. From the moment he was elected, I argued Canada needed to prepare for an emboldened Trump 2.0 who was intent on using trade as a weapon to sow chaos and scare capital and investment from all markets other than the United States.
Some Americans may feel this “might makes right” approach suits the current economic situation. The problem is that it will hurt America’s economy, too. Higher costs for supplies of steel and aluminum will hurt the very manufacturers and consumers President Trump claims to support.
Canada is the largest source of aluminum for the United States, sending it 3.2 million metric tons last year. Given the intense heat required to produce it, aluminum is electricity in physical form. That means that a tariff on Canadian aluminum is a tax on energy — at a time when the United States desperately needs more power to supercharge its A.I. race with China.
Canadians need to understand the cards we hold. And we have to be prepared to play them.
In 2018, Canada imposed dollar-for-dollar retaliation on 16.6 billion in Canadian dollars in U.S. steel, aluminum and other imports, deliberately targeting products from red states like Florida orange juice and Wisconsin cheese.
Mr. Trump may not care much about the objections of people in Canada — or Mexico or the European Union or South Korea — but he does care about American workers and businesses. If exporters feeling the squeeze from tit-for-tat tariffs start calling the White House, the pressure on the administration to reverse course will grow.
Such pushback led to the lifting of the tariffs on Canada in 2019 and it will work again now. All the steel- and aluminum-producing countries affected by these tariffs should impose dollar-for-dollar retaliation. We need to choose our targets with care. One hundred percent tariffs on Teslas, imposed by every country in the world, would be a good place to start.
The retaliation list should be published immediately to allow for maximum pressure on the administration from the American industries and workers we will target. These Trump tariffs are scheduled to come into effect on March 12. By then, Canada will have a new prime minister (I am one of the candidates) and that person must be prepared to act immediately.
These new import taxes, known as Section 232 tariffs, are a turning point for Canada and the world because they suggest the United States is making a historic change in its understanding of who its friends are, and indeed of whether it is interested in having any friends at all.
To his credit, President Trump was the first Western leader to recognize that the China shock is real for American workers, that China-driven global financial imbalances are unsustainable and that Chinese dominance of global technology would threaten the United States.
Naming these realities, which the international economic establishment was long reluctant to acknowledge, helped Mr. Trump get elected twice.
Here’s the rub. Actually fixing these problems will be much easier with the help of America’s stalwart friends, particularly Canada. And, at least before the past 10 days, we were keen to join your fight.
After all, our workers and our industries have suffered from the China shock just as America’s have. And we have had our own difficulties with Beijing, as President Trump should well remember.
America First need not mean America Alone. Indeed, the great rebalancing of the global economy that President Trump seeks can be accomplished best in cooperation with America’s traditional allies.
But if America, which controls approximately 25 percent of the global economy, pursues a punishing trade war with Canada and its other allies, all of us will have no choice but to seek other friends, wherever we can find them.
It is easy to see why a superpower might be attracted to splendid isolation. But it is the sometimes tedious, time-consuming work of cooperation with friends that will give Americans the best chance of recapturing the peace and prosperity achieved by the alliance-builders of the “greatest generation.”
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