Carson Jerema: Trump wants trade — just not on terms anyone can decipher

U.S. President Donald Trump’s position in his trade dispute with Canada is that this country must absorb any and all unprovoked acts of aggression and possibly even ask the Americans if they can deliver more hardship, maybe even thank the president for imposing tariffs on us. It is difficult to draw any other conclusion from the new round of tariffs Trump has pledged this week to enact on Canada.

Threats of new 50 per cent levies on a smattering of Canadian imports, ranging from cement to dairy, and from jewelry and essential oils to smartphones and gaming consoles, are intended as supposed retaliation for Canada’s supply management system, as well as the ban on American liquor sales in some provinces, and Canadian tariffs on American auto imports.

In an op/ed published today in National Post, Trump trade advisor Peter Navarro outlines the U.S. position, arguing Canada “singles out American farmers, distillers, automakers, and workers.” This country, in Navarro’s view, is supposedly demanding “access to the American market while reserving the right to close its own when competition becomes inconvenient.”

This framing demands Canada accept that up is down and black is white. Since Trump has returned to the White House, he has levied tariff after tariff against Canada, nearly all of which violate the Canada U.S. Mexico Agreement, or CUSMA. These include tariffs on so-called non-CUSMA compliant goods, but also on Canadian-made autos and Canadian steel and aluminum.

The president constantly dangles the promise of a new deal, while also threatening new tariffs unless other non-trade concessions are met. This has included demanding Canada forego plans to bring in a digital services tax that would have largely affected American tech companies, an admittedly ill-advised policy. Prime Minister Mark Carney relented and killed the tax last summer and for doing so Canada got nothing in return, beyond constant threats of yet more tariffs.

Then again, in June, the government put a stop to a separate plan to force streaming companies, like Netflix, to pay into a fund to create Canadian content, which the Trump administration also opposed.

And just this month, Carney agreed to split the revenues from the new Gordie Howe Bridge, despite Canada fronting the entire cost of its construction, bending to pressure from Trump to rewrite an agreement signed in 2012.

A week later, the president threatened these new tariffs.

When Trump regained the presidency, he promised his supporters that his trade policy would increase American exports, but his trade war has, so far, yielded the opposite results. As Navarro notes, “Canadian imports of American alcoholic beverages fell 81 per cent” and “U.S. vehicle exports to Canada fell approximately 22 per cent.” The Americans blame Canada for this, when in fact, Canadian tariffs on American autos are in response to Trump’s auto tariffs on this country, while the removal of liquor from Canadian shelves is in response to the general trade dispute that Trump began.

Trump’s complaints about Canada’s supply management system of quotas and tariffs on dairy, poultry and eggs are not unfounded. However, the existence of the system violates no agreement. It exists as it did when Trump negotiated CUSMA during his first term.

Navarro justifies the new tariffs under U.S. legislation that allows the president to bring in tariffs when there is evidence of discrimination against U.S. exports when compared to goods from other countries. To be clear, the audience for this justification is primarily American voters, congressmen, senators and the U.S. courts, as levying tariffs would normally be the purview of Congress, unless explicitly delegated to the president through legislation for specific reasons.

Earlier tariffs, which were later successfully challenged in court, were justified to address a so-called national emergency, which is why the president use to talk constantly about fentanyl crossing the border, but rarely brings it up anymore.

In any case, those American laws shouldn’t matter to Canada, as the Americans have been consistently breaking the trade deal that Trump himself negotiated. U.S. legislation may or may not justify the president levying tariffs without consulting Congress, but it should have little bearing on how Canadians view the U.S. constantly violating international treaties it has signed.

Carney and Trump have apparently agreed to intensify negotiations for a new deal in the wake of these latest threats and after the Americans said they did not wish to renew CUSMA, moving the deal to yearly reviews until it expires. It’s possible a new agreement, maybe better, but most certainly worse, than what exists now will result from those talks, but given how Trump has treated CUSMA, it is not clear anything he agrees to can be trusted.

There will always be another agenda on the table, another imagined slight, a goalpost to move, or just a need to make others dance. There isn’t much Canadians can do, except to look inward, cut taxes, deregulate and, yes, cut trade barriers, to bring up our productivity and incentivize businesses to invest here. Of all the things that Ottawa can control, Trump is not one of them.

National Post

Carson Jerema is managing editor, comment at National Post.