Op-Ed: Canada to match US tariffs as idiotic US trade bullying fails badly

The most fundamental reality of international relations is trade. Trade is how the international economy works. It’s the glue that fixes to everything you buy and sell.

Canada has taken off the gloves in response to the interminable babble from the US and its imposition of 50% tariffs on Canadian goods. The back-and-forth between the two countries about trade has been long, arduous, and utterly pointless.

So are the tariffs. Tariffs are a long-discredited form of protectionism. They didn’t work in the late 1800s. They directly contributed to the Great Depression. They obstruct and physically reduce trade, as importers have to pay extra for materials and goods.

The other problem is more existential. Tariffs are the exact opposite of free trade, which the US almost single-handedly championed for decades. Free trade enables movement of trade and streamlines the business processes. The European Union’s single market Is a case in point.

Let’s be clear:

The exporter pays nothing.

Tariffs are added costs to US consumers.

How it’s in America’s best interests to add costs to a truly whimpering and directionless domestic economy is anyone’s guess.

Another folksy issue here is that since the US decided to outsource its manufacturing to anywhere but its own soil, the US is a net importer of practically everything. “Made in the USA” barely exists today in practice.

This is where history bit a large chunk out of the US economy, and it was all self-inflicted. It would take years for America to revive its manufacturing to anywhere near the scale required for domestic needs, let alone compete with China.

The US vs Canada problem

There wasn’t a problem between the US and Canada until this administration got its illiterate ideological pseudopods onto the subject. A “national emergency” was the stated reason for the tariffs in general. How Canada was involved in this DIY delusional socioeconomic disaster is unknown.

Pierre Trudeau famously said that being next door to America was like sleeping with an elephant. It was a pretty apt analogy back then, as the Vietnam War sputtered out and the stench of Watergate undermined America’s image

These days, the elephant is arguably insane and unsanitary. “Utterly repulsive” would be a massive understatement. Nothing about America’s wind-assisted scattergun trade policies makes any degree of objective sense.

Carney has done an excellent job of making points by simply not budging and has earned Canada some well-deserved respect internationally in the process. Canada, in fact, is widening its horizons with mooted closer relations with the EU, as America’s horizons shrink.

Let’s spell this out:

Tariffs and their effects relate directly to the scale of demand. Canada has made a point of both boycotting US goods and simply sourcing elsewhere. That’s done Canada no damage at all, whereas loss of Canadian trade has verifiably affected the US markets, particularly in cross-border trade.

The US is the big market for demand. Canada doesn’t purchase on anywhere near the scale of the US consumer market. The net effect of US tariffs can only be negative on the US, whereas the Canadian market may barely notice the effect of Canadian tariffs on US goods.

So the US has lost this round before it starts.

What happens next? Guess.

Canada can simply ignore the whole issue until the current US administration gets neutered, either by its own behaviour or the midterms or more likely both. Canada can easily adopt the Chinese approach of saying nothing unless absolutely necessary and just watch the train wreck.

There is not even the beginning of anything barely worth mentioning as a reason for Canada to lift a finger in terms of US trade. This idiocy will blow over soon enough. The world is waiting patiently for business as usual with the US to resume, preferably without the freak show and its questionable “personalities”.

Meanwhile, the US is creating a massive future damage control mission for itself in turning trade into a subject for discussion. Just disentangling the mess will take years. It’s hard to define the sheer scale of destruction that the endless trade disasters have created. In the past, doing business in the US was the epitome of success in international trade. Now, it’s a very bad and unprofitable joke.

Child psychology as international trade policy

The stony and progressively more unfriendly silence with which the world in general greets every US trade initiative would have an impact on the most errant two-year-old.

Maybe the realization that things are different outside the bassinet would work. Maybe the idea that whining in social media about high-level government agreements or disagreements is a very bad idea would sink in.

Maybe a despairing last-ditch attempt to get back to normal protocols and realistic diplomacy would work. The world doesn’t like bullying, and it can do a lot about it. It depends on how much money you want to lose and how many markets you want to lose.

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