Exclusive: Inside the trade talks
Canada’s ambassador to the United States says White House reaches out to him for help
The turning point in Canada’s relationship with the United States — the one that triggered a fractious and ongoing trade dispute — came as a panicked White House phone call on the evening of Feb. 28 to Dave MacNaughton, Canada’s ambassador to the U.S.
“I was at home at 7 and I get this call from somebody in the White House saying, ‘You got to help. The president’s going to announce 25 per cent tariffs on steel tomorrow morning at 11. You have to have help,” MacNaughton said in a Friday morning interview with The Standard following a speech at the 17th annual Niagara Leaders Breakfast, at the Holiday Inn which focused on the newly signed USMCA trade deal.
There had been rumours that President Donald Trump could lash out at Canada on trade. Steel and aluminium were in his crosshairs. Now it seemed the rumours were true and Canada’s relationship with its largest trading partner was about to take a dramatic turn.
MacNaughton made a flurry of frantic phone calls to American business and political leaders, trying to determine who was an ally and who wasn’t. Who might have the president’s ear and help stem the tide?
He sent a message off to Ottawa and eventually, Foreign Affairs Minister Chrystia Freeland joined the effort.
By 10:45 p.m., MacNaughton received a new message from his White House contact: Don’t worry. The president is just doing a photo-op with steel company executives. Everything is fine.
MacNaughton didn’t relax. He hoped for the best, but in his gut, he knew better. There was no predicting what
Trump will do.
“At 11:15 the next day, he announced 25 per cent tariffs on Canadian steel,” said MacNaughton.
Trump used section 232 of the Trade Expansion Act to justify the tariffs, which also included a 10 per cent tariff on Canadian aluminium exports, on national security grounds.
Ottawa pushed back, calling the tariffs unreasonable and Trump’s justification ridiculous. It didn’t matter.
So in July, Canada fired back, imposing retaliatory tariffs. Manufacturers and suppliers on both sides of the 49th parallel have taken an economic hit as a result.
Although MacNaughton believes the tariffs will inevitably be lifted, the issue remains unresolved.
The phone call to MacNaughton from White House officials in response to a move by Trump wasn’t the first. It may not be the last. But MacNaughton said it was a manifestation of the chaos inside the White House, what Washington Post journalist Bob Woodward has described in his book “Fear,” as the “nervous breakdown” of the presidency.
“It’s quite clear that on items that the president really cares about, he makes the final decision,” MacNaughton said. “He obviously doesn’t phone me and ask me.”
The first time a White House official warned MacNaughton about Trump on trade came during a call on April 24, 2017, before the free trade talks began.
The ambassador was at his Toronto condo after watching the Washington Capitals eliminate the Toronto Maple Leafs from the Stanley Cup playoffs.
The call was from United
States Secretary of Commerce Wilbur Ross.
“This is not a good sign, right?” MacNaughton said.
Trump was on the warpath about milk, Ross told him.
“He was with the president in Wisconsin when he came across all these dairy farmers who were saying that they were going out of business because of Canada,” MacNaughton said. “Ross said, ’I’ve never seen him so angry, and you know, he’s going to tear up NAFTA.’”
MacNaughton told Ross overproduction by the American dairy sector was the root cause of lower prices in that country.
“He said, ‘I don’t care. You got to do something, you gotta do something.’”
MacNaughton ended up on the phone with then-White House chief of Staff Reince Priebus, who the ambassador said appeared to understand the issues affecting the America dairy sector. Maybe, the issue would subside.
It didn’t. Trump would return to the dairy issue repeatedly. No facts about the American dairy sector could sway the president, not when a group of dairy farmers and supporters told him Canada was the problem, MacNaughton said.
During the trade talks, Ottawa gave American dairy increased access to the Canadian market.
So difficult were the trade talks, MacNaughton became worried Trump didn’t actually want a trade deal at all.
Help came from an unexpected source within the White House — Trump’s son-in-law and senior adviser Jared Kushner.
Kushner had been around the talks from the start, but as the final deadline to get a deal finished approached, he began to take on a more prominent role.
“When Jared became so involved in it, that really said to us that (Trump) was prepared, under the right circumstances, to do a deal,” he said.
The Standard will post the transcript of the entire interview with Ambassador David MacNaughton on Monday