Stand up to these threats

Donald Trump has a beef with China over trade. So, naturally, he’s taking action by threatening to impose punitive measures on … Canada.

It’s a ludicrous, self-defeating action. But the world has become so accustomed to nonsense coming out of the Trump White House that this latest volley seems almost par for the course.

In fact, Trump’s credibility is so low that the biggest point of debate among the experts is whether he will actually carry through on his threat to impose punishing tariffs on imports of steel and aluminum into the United States.

Will it really happen this week, as the president has insisted in the last few days? Or will something quite different emerge from the cloud of bluster and the blizzard of tweets? No one knows — including, it seems, Trump’s Republican allies and his own senior staff, who have been fighting among themselves on this very issue.

For the moment, though, the trade hawks in the White House have the upper hand. And with their support, Trump is promising to deliver on one of his campaign promises — to revive the metal-producing industries that were once a mainstay of the industrial economy of the northeast.

The big complaint from Trump and other American economic nationalists involves China, whose state-subsidized steel producers, they say, have been flooding the world market and driving down prices to levels where U.S. companies can’t compete.

That’s the ostensible problem. The supposed solution that Trump proposes is an across-the-board, 25-per-cent tariff on steel imports and a 10-per-cent tariff on aluminum, all in the name of national security.

It turns out the biggest target of such a move would actually be Canada, which is the largest exporter of steel to the U.S., sending $5.1 billion (U.S.) worth south of the border in 2017. Other leading suppliers of steel to the U.S. are South Korea, Mexico, Germany, Japan and Taiwan — American allies all.

Far down on the list, at No. 10, is China, the cause of all this Trumpian wrath, which sold just $1 billion worth of steel to the United States last year.

To make Trump’s move even more illogical, Canada is actually a net importer of steel from the U.S., as Prime Minister Justin Trudeau pointed out in a refreshingly firm rejection of the threatened tariff. Imposing such tariffs on Canadian steel or aluminum, he said, is “absolutely unacceptable.”

And this is setting aside the effect of such tariffs inside the United States itself. It might save some steel- and aluminum-producing jobs, but as many economists point out, there are far more workers in industries that consume metals. The tariffs would just make their products more expensive and therefore less competitive.

So if Trump does carry through with his threat, the result would be almost uniquely self-destructive.

He would manage to alienate his closest allies; make key U.S. industries such as automaking less competitive; raise prices for American consumers; potentially set off a trade war; undermine the rules-based international trading system under which the United States has flourished as the world’s pre-eminent economic power for decades; and divide his own political base, which includes both free-trade Republicans as well as economic nationalists.

All this while inflicting barely a scratch on the Chinese and their state-subsidized steel makers. Well done, Mr. President. Still, the week is young. There’s time for many more tweets and reverses of policy. And it’s far from clear that when the details are announced they will be as menacing as Trump seemed to promise on Friday when he tweeted with a breathtaking degree of ignorance that “trade wars are good, and easy to win.”

There is, first of all, the question of whether some countries will be exempted from the threatened tariffs. When the administration of George W. Bush imposed a similar measure in 2002, Canada was excluded.

Given how integrated the U.S. and Canadian metals industries are, there’s an excellent argument for such an exemption this time. That argument would be particularly strong since Trump invoked national security as justification for the new tariffs. There’s absolutely no basis for claiming that relying on Canadian steel and aluminum threatens American security.

Trump has already rejected the idea of excluding some countries from the tariffs. But some of his top trade advisers are already musing about bringing in certain “industry exemptions” that might accomplish essentially the same goal and “tailor” the tariffs to hit the real target — China.

Trump himself is adding to the uncertainty by suggesting that Canada and Mexico might be excluded if the U.S. gets a better deal on NAFTA, which is being renegotiated. The tariff threat, in other words, might turn out just to be another bargaining tactic.

Canada should hang tough amid all this confusion. It has both facts and logic on its side in arguing against a pointless trade war. It also has plenty of influential allies on this issue in the United States itself, many of them in Trump’s own party. This is the time for Canada to draw the line and reject a plunge into mutual economic self-destruction.

The tariff’s result would be almost uniquely self-destructive