To win in the long run, Canada must make concessions to Trump
There are parallels between the twin crises of immigration and tariffs currently being pushed by the American president. In both cases, Donald Trump’s modus operandi is to project toughness and strength without really having thought through the potential policy implications. The impact of the child separation tactic to punish refugee claimants has seemed to backfire in the eyes of most, but there is little evidence that the president has been chastened by this experience apart from complaining about the unfairness of the media coverage.
Likewise his application of tariffs, initially on steel and aluminum but with threats of possibly more to come, is the act of someone who has given more thought to theatrical optics, than how the action might play out in practice. Despite the president’s proclamation that “trade wars are good” and “easy to win”, the vast majority of economists would suggest that everyone becomes a loser in this exercise.
Those sympathetic to the president have rationalized that the tariffs are merely a bargaining tactic to win concessions from trading partners, just like the separation of children from their refugee parents was a tactic to deter them from coming to America. Unfortunately for Mr. Trump things haven’t really worked out that way.
If those migrating from violent dysfunctional Central American countries like Honduras, Guatemala and El Salvador are sufficiently desperate and fearful for their survival, they will go to whatever ends are necessary. Likewise America’s important trading partners cannot allow themselves to be seen cowering in the face of Trump’s bullying tactics. Indeed if Justin Trudeau and other western leaders did choose to appease the American president, he might very well double down and make further demands. This has already been suggested by the additional threat of an automobile tariff.
It goes without question that Canada will be hurt economically by the newly emerging trade war, but so will everyone else including the United States. Evidence of this is now becoming apparent with decisions by Harley-Davidson and smaller companies such as the Mid Continental Nail Corporation to export production or to shut down entirely. Canada isn’t alone in feeling it has no option to retaliating with offsetting tariffs. Prices for softwood lumber and metals have already been affected as a result.
The American agriculture sector is particularly vulnerable to these countervailing measures, and already US producers of soybeans, wheat, dairy, beef and pork are losing money because the nations affected have strategically decided to target commodities produced in Republican voting areas.
Political leaders in the erstwhile Western alliance must at last acknowledge that pandering to Donald Trump’s King Learlike need for praise, isn’t reciprocated with policy concessions, and that conciliatory behaviour is a one-way street with him.
Among the president’s instincts is a preference for bilateral deals rather than multilateral ones. It is understandable that a larger more powerful political actor would feel they have greater leverage negotiating with Canada and Mexico separately, than jointly as in the NAFTA discussions. His penchant for unpredictability has itself become quite predictable, and is more a result of lack of preparation and “winging it”, than tactical forethought.
After all the bluster about his summit with the North Korean leader, most of the substantive achievements seem to have been on the other side. It has been suggested that his foreign policy is transactional, believing in neither friends nor enemies. This is how he can demonize Justin Trudeau and praise Kim Jong Un.
In order to settle the above controversies, be it the fate of incarcerated children or international trade disputes, a willingness to compromise seems to be crucial to their resolution, the Canadian government must be willing to make some modest concessions on supply management, and goods brought home by citizens travelling south of the border, such that Trump can claim some kind of victory. However so long as threats and intimidation characterize the actions of those involved, there is little reason to be optimistic about the outcome.