The Donald seems obsessed with Canadian Dairy tariffs. As well he might be as they can go as high as 290%.
Over the next week or so, Canada and the US are going to have to climb down from their rather silly positions on everything from aluminium to felt pens.
A good place to start is with Canadian dairy. Why not announce a zero tariff on hormone/antibiotic free milk? It is a tiny percentage of American dairy production but a huge percentage of Canadian dairy is both hormone and antibiotic free.
Trump seems to be attracted by shiny objects and a “win” on dairy is very shiny indeed.
Only in Canada would the rudeness of our Prime Minister to a departing guest be raised – admittedly by Warren “Lying Jackal” Kinsella – to a question of Canadian patriotism. Our Minister of External Affairs has wagged her stubby little finger at the Donald and called his response to Trudeau’s rudeness “inappropriate”.
In so far as there is any thinking at all in Ottawa I suspect some bright light in the PMO, in the wake of Ford’s victory in Ontario, has had the idea that the way for Trudeau to win the next election is to try and cast that election as an opportunity for good Canadians to vote against the monster Trump. It is just the sort of idea which will emerge from a gender-balanced brain trust a bit high on soy. Because decent, good Canadians hate Trump and if Trudeau is seen to stand up to the orange ogre we will all troop to the ballot box in Trudeau’s support. While I think that is unlikely, it is really all these clowns have left.
Which is very bad news for Canada. Because Trump is not kidding on tariffs and could care less if all the Canadas rise as one in support of the Little Potato. As I pointed out below, at virtually no cost to the American economy, Trump can pretty much wipe out the one bit of manufacturing which exists in the so-called “Golden Triangle”. And if Ms. Freeland thinks he is inappropriate now, imagine how fast her finger will have to wag if he hits oil and lumber with the same sort of across the board tariff.
A lot of diplomacy and trade strategy can be learned in a school yard. Six grade one students are unwise trying to take on the kid in grade seven. While they might be able to slow him down they can’t actually hurt him, but one solid punch from the big kid and a little kid is laid out flat. Is that fair? Of course not. But it is how the world works.
Justin Trudeau, in a bizarre performance at the final press conference of the G-7 conference, managed to thoroughly piss off Donald Trump. To the point that Trump called him dishonest.
Now the Donald is going to be occupied with North Korea for the next few days and, at a guess, having withdrawn America’s consent to the G-7 communique may simply forget Trudeau’s deeply cowardly remarks. (It is cowardly to say things about a person when they have left the building when you had the opportunity to say them to that person’s face.) That is the best Trudeau can hope for. More likely, Trump will have detailed a hard man in a suit to run the numbers on Canada’s trade with the US and find out just how many cars we send south every year. These are not hard answers to find and when those numbers go back to Trump there is very little to stop him from dropping a 25% tariff on those cars.
I said over at Kate’s that the Americans see trade negotiations as business, the Canadians see them as politics.
From a business perspective, a 25% tariff on cars made in Canada will lead to more cars being made in the US. The transition will be a bit uncomfortable for a number of large US companies but in the overall American economy, it will be a blip.
In Canada? In Canada, more specifically Ontario, the destruction of the auto industry would be a full scale, all hands on deck, disaster. Realistically, the auto sector is Ontario’s largest private sector employer and the largest manufacturing sector. Being priced out of the US market would kill tens of thousands of well-paid jobs.
Trump has taken the measure of Trudeau and his tiny, annoying, Minister of External Affairs, Chrystia Freeland and concluded they are featherweights. Which means that Canada is potentially screwed because Trump has no faith in our leadership. You don’t call people dishonest publically if you plan to do business with them.
It is unlikely that Trudeau will be aware of just how badly he has failed for a few days. The Canadian media are heavily invested in a narrative which has Justin standing up to the big, bad, Trump. Trudeau’s tone-deaf advisors are, no doubt, revelling in the fact they got lots of “gender” language into the communique.
It will take a few days for the more sober side of the media to realize what peril Trudeau has put us in. And a few more for the geniuses in the PMO to figure out that Trump is not playing the same game as they are.
When they do figure it out the question will arise, “What the fuck do we do now?”
As I am quite sure Butz and his posse read this blog I have a simple suggestion.
Normally, I would have suggested they get in touch with Simon Reisman who negotiated both the Auto-Pac and NAFTA. Alas, Reisman is dead.
Second best by a long shot? Brian Mulroney. A man I have next to no time for but who a) managed to get Canadians onboard for NAFTA, b) was a quite successful Canadian Prime Minister, c) is wired into both Trump World and broad swaths of corporate America.
If Trudeau could get Mulroney to do it Mulroney would be going into the US with a serious, well thought out, everything on the table, pitch. Likely starting with first principles – no tariffs, no subsidies, no non-tariff barriers. Be prepared to dump dairy and end transhipment of Chinese steel. And pitch it to the Trump people as the template for the deals which could be made with the EU, Japan, India and so on. (China is a whole other thing.)
The key point here is that Canada has to move, and move quickly, away from the finger-wagging politics of gender inclusion and climate change to a hard-nosed business approach to getting the best deal we can with an America which is now willing to put its own interests first.
Our leverage is that, while Trump is perfectly willing to talk tough, he also seems to like having a few friends. Canada, notwithstanding our dolt of a PM, has been and could be the staunch friend Trump needs.
Mulroney might just be able to pull this off. Here’s why:
[Back story: Peter Newman released a set of transcripts of Mulroney “unbuttoned” without Mulroney’s consent.]
I have no idea whether or not Ford is actually a conservative or a populist (which are not the same thing) but what he is is very different from the run of Progressive Conservative leaders of the past few decades. Those leaders had a tendancy to reflexively adopt bien pensant thinking on things like climate change for fear of alienating perceived elites. Ford was never going to win the Annex or in Ontario’s university towns nor was he going to win a lot of votes from well paid members of public service unions so he was free to take a somewhat more reasonable, conservative, line. That, in turn, meant that real conservative voters, instead of staying home because voting would make no difference, seem to have shown up to the polls.
It will take a bit of analysis to see if that hypothesis is actually true – the question being the relative voting strength of the Conservatives in this election compared to the last two or three – but it is an idea that other conservative parties in Canada should be looking at. Running real conservatives on real conservative platforms might just bring disenchanted conservative voters out to the polls.
One other thought: contrary to received opinion, being dubbed a mini-Trump is not quite the kiss of death it was thought to be. There are, I suspect, a significant number of Canadians who rather like Agent Orange but are unwilling to take the social risk of saying so in the Great Progressive North.
Here’s a counter suggestion: total, real, free trade. No tarriffs either way on Canadian or US made and manufactured goods. An open border for evrything from steel to cheese. (And yes, the dairy farmers will scream…let’em.)
Canada is not going to win a trade war with its biggest trading partner. It is a silly idea and one which only the Liberals could come up with. But we could be creative and say, unilaterally, that we are eliminating all tarrifs and other barriers to US made goods. That would swat the ball back into Trump’s court.
So far as can be seen, the biggest US gripe about Canada is transhipment of Chinese goods. We can deal with that with a value add requirement.
Trump is never going to give an inch to retaliation. He’d rather die. But a better deal for Canada and the US, now we are talking.
And, best of all, cheap cheese and wine and all manner of good things.
The Donald seems obsessed with Canadian Dairy tariffs. As well he might be as they can go as high as 290%.
Jay Currie 