Canada, Trudeau, score trade war victory with U.S.
Tears of joy flowed openly at Hamilton’s Stelco plant after American President Donald Trump finally agreed to end to his tariffs on Canadian steel and aluminum.
And tears of joy may well have been shed privately by Justin Trudeau for what was surely a victory for thousands of Canadian metal-industry workers like the ones at Stelco, for the Canadian economy and, yes, his own Liberal government.
After nearly a year, an ugly, needless and mutually harmful North American trade war was over as of this week.
For this welcome peace, Prime Minister Trudeau’s government and in particular Foreign Affairs Minister Chrystia Freeland can claim huge credit. And that’s true even if Trump’s escalating trade war with China played a role, too.
On this file, the federal government acquitted itself well in ending a crisis it didn’t create and negotiating its way to a solution with the world’s most powerful economy.
It was on June 1, 2018 that Trump hit Canada and Mexico with tariffs of 25 per cent on the steel and 10 per cent on the aluminum they exported to the U.S. The president’s reasons were bogus. His claim that dependency on foreign metals threatened American security was absurd. Canada is America’s closest trading partner and military ally. Mexico is a staunch neighbour, too.
What Trump was really trying to achieve with a tactic that likely violated the North American Trade Agreement between the three nations was to force a renegotiation of this deal that favoured the Americans.
It mattered nothing to Trump that his tariffs, which were countered by retaliatory tariffs from Canada and Mexico, hurt businesses, workers and consumers in all three countries. Or that his insulting claims that Trudeau was “dishonest” and “weak” for complaining about the tariffs plunged Canada-U.S. relations into their deepest chill in a half century.
This was vintage Trump bully-in-the-china-shop deal-making. In this instance, it accomplished nothing that a more civil discourse between the U.S. and its Canadian and Mexican partners would have done.
Trump did succeed in persuading Canada and Mexico to help his administration crack down on steel and aluminum from China and other foreign countries that circumvent American tariffs by being shipped to the U.S. through Canada and Mexico. But the U.S. ended up withdrawing its key demand that Canada and Mexico agree to quotas that capped their metal exports. So what was all the fuss really about?
Beyond celebrating the end of Trump’s tariffs, Canadians can be grateful the revamped North American trade deal now has a far greater chance of being ratified. Refusing to approve this agreement until Trump dropped his tariffs was one of Canada’s most effective weapons in this dispute. The tariffs Trudeau slapped on a host of American products also did their job.
It’s likely another factor was at play. Trump is embroiled in a far larger trade war with the world’s second largest economy — China. Waging economic conflicts on multiple fronts is tricky. Making peace with Canada and Mexico — and even enlisting them as allies against China — allows Trump to focus on one target.
That said, Trudeau’s government deserves applause for its handling of this dispute. While its reputation was dented by the resignation of two prominent cabinet ministers and the SNC Lavalin affair this past winter, it can point to the end of the trade war as a major accomplishment and proof it can rise to difficult challenges. With the next election five months away, that should inspire more than a few Liberal tears of gratitude.