A trade war Canada will lose
Presumably Donald Trump was warned of the furious response he could expect from the United States’ trading partners were he to proceed with his threatened tariffs on their exports of aluminum and steel. He went ahead and did so anyway.
This is one problem with trade wars: they seek to achieve in retrospect what they failed to achieve in prospect. Were he likely to have been deterred by retaliatory tariffs, of the kind that Canada, Mexico and the European Union have just applied to a fantastic assortment of U.S. goods, he would have been already.
And yet, deterrence having so conspicuously failed, they feel obliged to carry out the threat regardless. It is difficult to see how the reality of a trade war is more likely to succeed than the anticipation, especially when dealing with a man who tweets “trade wars are good and easy to win.”
Perhaps its advocates are right to believe that retaliatory tariffs will so focus congressional and public anger on Trump, notably in the states most affected, that he will be forced into a humiliating retreat. Perhaps Trump is right to calculate that people do not necessarily put cause and effect together quite so logically — his people in particular.
They may even be moved to rally around their besieged (as they see it) president and country. Wasn’t it precisely to “fight back” against these scheming foreigners, with their long history of preying upon American naivety, that Trump hit them with the tariffs in the first place?
At any rate, while we are testing this theory, matching the U.S. tariffs we decry as madness and ruin with mad, ruinous tariffs of our own, it is our consumers and businesses who will be the victims. This is the other problem with trade wars. In a real war, the guns are pointed at the other guys. But tariffs are self-inflicted wounds.
This is a hard point to get across in the heat of battle. Suggest that retaliation is unlikely to work against them and certain to hurt us, and the response is a volley of patriotic oaths: We have to do something! So you’re saying we should just sit there and take it? You have to stand up to a bully! Why don’t you just take out U.S. citizenship then?
It is neither appeasement nor treason to refrain from costly, futile measures that at best are unlikely to succeed and at worst will trigger an escalating series of attacks and counter-attacks. It is simply facing facts. The U.S. economy is more than 10 times as large as ours. Its exports to Canada account for two per cent of its GDP; our exports to them are 25 per cent of ours.
Even in concert with the other countries targeted, it is unlikely that we can cause Trump to alter course, for the simple reason that he is Trump. A normal president in possession of a rational mind might well be dissuaded by the united opposition of much of the democratic world. Trump is not that president. If he were he would not have slapped the tariffs on us in the first place, in open defiance not just of economic sense or international trade law, but of the very “military security” invoked as its justification.
This is a point that bears repeating. The sheer enormity of Trump, the impossible combination of every conceivable malignant quality in one man — comprehensive ignorance, pathological dishonesty, thoroughgoing corruption, and a seeming determination to use his time in office to cause as much damage in as many ways as he possibly can — is a constant invitation to denial. The mind does not want to believe what the eyes and ears are telling it, that an emotionally disturbed man-child has control of the White House. But it’s true. The nightmare is real.
It is folly, then, to expect him to respond as other presidents might. What we can do is learn from this experience. Trump cannot be reasoned with, and he cannot be appeased; he can be flattered, but not with any expectation it will be repaid. His word is worth nothing, and while he can be frightened or bought, he absolutely cannot be relied upon. He will do what he will do, and there isn’t a lot the rest of us can do about it. This goes far beyond the odd tariff.
It was evident from the start that Trump represented a total break with all previous norms and expectations of how a president should behave or what he should believe in. Among those norms, it is now incontrovertible, is much of the international order successive American presidents helped to build over many decades.
A merely reckless or belligerent president might have torn up the Iran deal or withdrawn from the Paris climate accord or even pulled out of the Trans Pacific Partnership. Trump’s targets, by contrast, include NATO and the World Trade Organization — anything that constrains the U.S.’s freedom of movement in any way; anything that elite consensus thinks is in the U.S. and the world’s interest. And the worst of it is is that a significant portion of the American population agrees with him.
The collateral damage will surely include the attempt to renegotiate NAFTA — not that there’s anything wrong with that — never likely to succeed but now hopelessly compromised: the task for Canada would now seem managing the talks’ collapse, rather than endless attempts to keep them aloft. Next week’s G7 meeting should also be a lulu.
This week marked a breaking point, the moment when the international community finally confronted the reality that all of its leaders’ attempts to “handle” Trump had failed. The U.S., under Trump, is no longer the leader of the free world, but a problem for the free world, to manage and contain as best it can.