The editors of the Wall Street Journal continue to describe President Donald Trump’s campaign against Canada as “the dumbest trade war in history,” but there’s stiff competition for that title. Americans are still paying a 25 percent tax on imported light trucks in retaliation for European taxes on our chickens in the 1960s. The stupidity of Trump’s recent escalation is certainly impressive, though, and it contains as many layers as a Canuck walking to Tim Hortons in January. Consider these six.
It extends a failing trade policy. Trump’s tariffs are costing American households an average of $1,100 a year. They have not achieved the president’s stated goal of shrinking the trade deficit by any meaningful measure, and while manufacturing output has been rising, the expansion has been concentrated in the industries least affected by Trump’s tariffs.
The trade war weakens the United States in relation to China. Optimists believe Trump is trying to force Canada to adopt its own stringent tariffs against China. Even if that were the right tool for an international coalition to use to weaken the Chinese government or improve its behavior, simultaneously attacking Canada over everything from its dairy policy to its existence as an independent nation is no way to build that coalition. Canadian Prime Minister Mark Carney’s musings about drawing closer to Beijing may not be wise, but they are predictable.
It adds to Republicans’ worst political liability this fall. Voters are unhappy about the economy, and especially about the high prices that Trump promised to reduce. The tariffs raise prices, and voters know it. By announcing additional levies on Canada, Trump draws new attention to a policy Americans dislike, and underscores his stubborn persistence. In trying to rename Lake Ontario, he further signals that he isn’t focusing on voters’ priorities.
The spat could be especially unhelpful to Republicans in Michigan, which engages in a lot of trade with Canada and has races for governor, senator and several competitive House seats this year. As the Journal reported: “Detroit’s carmakers in particular could see some of their most profitable products walloped if Trump follows through on a threat to double tariffs on cars and auto parts from Canada to 50% from 25%.” (Never mind, again, that defending U.S. auto companies is one of the trade war’s supposed goals.)
The trade war is increasingly based on absurd complaints. Canada maintains some protectionist policies that harm American producers (and Canadian consumers), much as the U.S. engages in some protectionism against Canadian businesses. Yet the two nations largely practice free trade with one another. Scott Lincicome of the Cato Institute calculates that 99.85 percent of cross-border trade was duty-free before Trump started his trade war. The president called his first-term deal with Canada and Mexico “the largest, fairest, most balanced, and modern trade agreement ever achieved.”
Canadian dairy protectionism is a particular sore spot for American farmers. But the Trump administration itself finds that U.S. dairy exports up north have increased by 42 percent, adjusting for inflation, since 2019. Hence the Trump administration’s need to pad the grievances. The White House released a list of 11 “facts” about “the record of Canadian abuse” of the U.S. Five of them note that Canada had the temerity to retaliate against Trump’s tariffs. Another three don’t allege anything remotely resembling abuse (e.g., “the U.S. economy is approximately 13 times larger than the Canadian economy”). One uses the past tense because it condemns a policy Canada no longer has.
Trump is underestimating the Canadian government’s freedom of maneuver. The president’s tariffs are unpopular in the U.S., but resistance to them is popular in Canada. Carney was elected in large part to stand up to Trump. Few, if any, Americans voted for Trump so that he could fight Canada. Trump assumes the U.S. will prevail on account of its relative economic might. But that imbalance provokes Canadian nationalism — we won’t be bullied — while leaving Americans, at best, puzzled.
His negotiating tactics make no sense. Trump has admitted to making last-minute demands in talks with Canada. The administration also reportedly insisted that whatever deal was reached, it reserved the right to impose new tariffs afterward. Why would anyone agree to a deal on those terms?
The administration is gloating about its self-inflicted failure. It posted a picture of an eagle pinning down a goose, which was eye-rolling enough before it turned out to be a still from a fight the goose won. If the White House wanted to capture how much serious consideration it has given to its Canada policy, at least it selected the right image.
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