Canada wins welcome but uncertain tariff reprieve

Canadians can breathe easier today — but just a little — after Donald Trump spared this country from his harsh, new tariffs on steel and aluminum imports into the United States.

Unfortunately this is no time, especially for those in Ottawa, to relax or entirely exhale.

Yes, Canada and Mexico are — for now — exempt from the 25 per cent duty on steel and the 10 per cent duty on aluminum the U.S. president announced Thursday.

For this, the Canadian government deserves considerable credit.

Not only did Prime Minister Justin Trudeau personally call the president this week to plead for the exemption, but he and his cabinet ministers have for months lobbied American politicians to keep the borders as open as possible for trade.

Yet Canada has received not so much a stay of execution in Trump’s paranoid protectionist court as it has won a temporary reprieve, with the emphasis on temporary.

As always with this capricious deal-maker, no action is clear or straightforward. The strings Trump attached to his tariff exemption could tie down an elephant.

Canada and Mexico are exempt from the tariffs, but only conditionally and for now.

Whether they permanently dodge these misguided, punitive measures depends on how they behave in the ongoing North American Free Trade Agreement negotiations.

What a crude, offensive bargaining chip Trump tossed on the table.

Do what he likes and Canada — the biggest foreign supplier of steel and aluminum to the U.S. — goes tariff-free. Annoy the president, which considering his renowned hypersensitivity is easy, and those tariffs are slapped on Canadian steel and aluminum shipped south of the border.

Not only is this infuriating, it exposes the falsehood of Trump’s reasoning for the tariffs, at least as they relate to this country.

Trump’s Commerce Department said the U.S. needs larger steel and aluminum industries to build its military hardware. That suggests the tariffs are linked to national security.

But either steel and aluminum imports from Canada and Mexico satisfy American national security requirements or they don’t. No NAFTA bone Canada tosses Trump’s way can alter the situation.

So, get ready to hold your breath once more. Trudeau is already planning what retaliatory economic weapons to fire if Trump hits Canada with his new tariffs. Fair enough.

But just as the American tariffs would hurt our steel and aluminum industries, so the Canadian economy would be collateral damage in any trade war that erupts between the two countries.

So many Canadian and American industries are seamlessly integrated, so many depend on unbroken supply chains stretching across the border, it’s obvious that workers, consumers and businesses in both countries will suffer if protectionist action escalates.

Moreover, even though Canada and Mexico might escape the tariffs, other countries around the world that do not will surely retaliate.

Such eye-for-an-eye economics will blind everyone. While we must steel ourselves for any steel-trade fight, we should continue working with the forces of reason in Washington D.C. and the state capitals to stop this battle before it gets ugly.