Don’t mess with success
What Trudeau needs to tell Americans
Justin Trudeau performed faultlessly on NBC’s Meet the Press with Chuck Todd on Sunday — if you were watching from a Canadian perspective. But the point, presumably, was to change the hearts and minds of a U.S. audience about the judiciousness of Donald Trump’s tariffs on steel and aluminum — and from that point of view, the Prime Minister’s message was unconvincing. “Condescending hypocrite” was one response on the NBC website; “Castro’s son — don’t come to our country and blast our president,” said another. Trudeau was measured, pointing out that Canada and the U.S. have the most successful economic partnership and alliance in the history of the modern world. He argued persuasively that trade negotiations are not a zero-sum game and that Canada is seeking a win-win solution. But inevitably, the headlines were generated by his use of the word “insulting” in reference to the use of a national security provision as the excuse for imposing the tariffs.
On CNN, Global Affairs Minister Chrystia Freeland was even more forceful, saying Canadians are “hurt and insulted” by being classified as a national security threat. Larry Kudlow, Trump’s economic adviser, suggested the Canadians were “overreacting.”
“To say this is an attack on Canada is not right,” he said on Fox News Sunday. He compared the trade dispute to a “family quarrel” and suggested the steel and aluminum tariffs are subject to negotiation, which reveals the travesty of the national security provision. (If there is a genuine threat, how can it be negotiable?)
But Trudeau and Freeland should take a leaf from the book of baseball coach Tommy Lasorda, who once said he found it was pointless to talk about his troubles. “Eighty per cent of people don’t care and the other 20 per cent are glad you’re having them,” he said. Trudeau should be reiterating the message that Trump himself is trumpeting — that in his first 500 days, the president’s massive tax cuts and deregulation have produced “the best economy and jobs EVER and much more.”
The prime minister should gloss over the damage being done to security alliances, the potential debt bubble, the blind eye being turned to climate change and the impending constitutional crisis — those are America’s problems. Instead, he should point to the 223,000 jobs created in May, which reduced the U.S. unemployment rate to 3.8 per cent.
As The Economist said last week, Trump’s “homebrewed economic vision” has seen the earnings of listed firms rise by 22 per cent in the first quarter of 2018; investment increase by 19 per cent in the same period and optimism among the country’s 29 million small firms reach record highs. These gains have been made in a time of rules, openness and multilateral deals. Trudeau’s message should be: “Who in their right mind would mess with this formula?”
Trade wars might be winnable, but at a cost — the most immediate of which is unpredictability.
Todd asked Trudeau what he thought Trump wants from NAFTA. A better deal on the autos sector from Mexico, the prime minister said, and more access to agricultural sectors like dairy. The president reiterated his desire for changes on agriculture in a tweet on Monday.
“Farmers have not been doing well for 15 years. Mexico, Canada and China have treated them unfairly. By the time I finish trade talks, that will change. Big barriers against U.S. farmers, and other businesses, will finally be broken.”
If Trump does have legitimate grounds for complaint, it is on the access for U.S. dairy, eggs and chicken that is restricted by Canada’s supply management system. Trudeau indicated Canada is prepared to bend. “We were moving towards flexibility in those areas that I think was very promising,” he told Todd.
The comments by both Kudlow and Trump suggest they are still interested in a deal but that Canada will have to concede on dairy — not a bad thing necessarily, if it can be traded for concessions elsewhere.
That is obviously easier said than done when you are sitting across the table from someone who is more slippery than a greased weasel. But the trading system agreed to with the General Agreement on Trade and Tariffs in 1947 has proven resilient to challenges over the past70years.Ithassurvived because outlaw nations have found themselves on the receiving end of massive retaliation.
If Trump has not yet been apprised of the consequences of his tariffs, he certainly will be in Charlevoix, Que., this week at what is likely to be the G6 Plus 1 leaders’ summit.
It’s not yet clear, for all Trump’s bluster and brinksmanship, that he is ready to risk long-term economic damage in pursuit of his quest to reduce the trade deficit.
And even if he is, it is even less clear that Congress and corporate America, which have to this point understood that NAFTA would be renegotiated, are prepared to go along for that wild ride. It is to the broader self-interest of Americans that Trudeau has to make his pitch.
FARMERS HAVE NOT BEEN DOING WELL ... MEXICO, CANADAAND CHINA HAVE TREATED THEM UNFAIRLY.