Knuckling under won’t win battle of steel tariffs
What was Ontario’s economic development and trade minister thinking when he publicly called on Canada to surrender in the trade war with the United States?
On Monday Todd Smith said Canada should remove tariffs put in place in response to Donald Trump’s imposition of 25 per cent tariffs on steel imports and 10 per cent on aluminum. Canada’s tariffs match those dollar for dollar, and are used in part to support companies and workers in the affected sectors.
Further, Smith said his boss, Doug Ford, wanted the same thing. “I know that the premier has suggested this to the federal government that they should remove their tariffs as a first step in removing tariffs overall.” As far as we know Ford hasn’t spoken on the matter, but if that’s how he feels, he should go public.
Why on earth would anyone, Ford or his minister, believe that Donald Trump would respect capitulation? Has Trump shown in past behaviour that he respects weakness? We must have missed that newscast.
Smith’s suggestion is so patently ridiculous it took only hours for steel and aluminum companies to pipe in with their support for Ottawa. A tweet from the Canadian Steel Producers Association, said: “The federal government’s retaliatory action against the U.S.A. is vital in protecting businesses and steelworkers.” The Aluminum Association of Canada said the Trudeau government should “maintain all tariffs on U.S. imports and support Canadian businesses as long as U.S. tariffs are in place.”
Analysts and pundits from all quarters were equally mystified and distraught. Why would the Ford government side with Trump against Canada? More than one suggested it might be linked to Ford’s oft-expressed respect and affection for Trump’s leadership. But suggesting Canada should surrender?
It turns out, if you believe the updated position of the province, that wasn’t behind Smith’s play. He really meant to say we should revisit tariffs on things other than steel and aluminum, like Kentucky bourbon and playing cards. That, he says, will demonstrate to Trump that Canada is willing to deal. This new position — if it can be called that — isn’t nearly as damaging, but it’s equally stupid. Do Smith and his boss really think Trump will come to the table based on bourbon and playing cards?
He won’t. He thinks his tariffs, broadly, have been a huge success and a sign of his historic greatness. Yes, they’re hurting Americans as they’re hurting Canadians, but Trump isn’t one to worry about his own citizens welfare. In his view, measures like these are signs of strength and dominance.
Tariffs are a real and growing problem for steel and aluminum companies. High steel prices have cushioned steel producers to some extent, but the impact of tariffs is already being felt in Sault St. Marie, and will eventually hit Hamilton as well.
Canada continues to work trade and diplomatic channels to see tariffs lifted. Some have suggested the prime minister shouldn’t give final approval to the new NAFTA agreement without resolution, and that might be worth considering. Trump sees NAFTA as a major accomplishment, and the fact that it might be stymied due to his nonsensical tariffs will trouble him. His own Congress has said it won’t support the new trade pact until tariffs have been lifted, and that might be worth Ottawa’s consideration, too. Much more work remains to be done.
But please, no more suggestions that Canada take a knee to the biggest bully in the free world. That’s embarrassing, and would only make dealing with Trump more difficult. The Trudeau government has walked a fine line to date between working with Trump and not being pushed around. That should continue to be its strategy.