Harry Storm
So much for Canadian Prime Minister Mark Carney’s Great Speech. Now U.S. president Donald Trump is threatening to impose a 100% tariff on all Canadian goods if Canada and China reach a wide-ranging trade deal.
Trump is of course well known for making mercurial threats that often don’t come to fruition, and a 100% tariff on the U.S.’s biggest trade partner would have a massive impact on American imports and raise prices on a multitude of goods. However, the impacts on Canada, should he make good on his threat, would be catastrophic.
Trump’s tariff threat comes after Canada made a deal with China to reduce the tariff on Chinese electrical vehicles into Canada from 100% to 6.1% in exchange for China reducing its tariff on Canadian canola oil from 85% to 15% and additional tariff relief on lobster, crabs and peas.
This agreement also led to speculation that Canada and China would sign a free-trade deal, which Trump originally supported, saying it would be a “good thing.” But then came Carney’s Great Speech, where he declared the old, U.S.-led world order to be over, effectively writing the U.S. off as a reliable trading partner and ally and suggesting that “middle powers” i.e. the rest of the western world, would have to come together as never before. Yet even as Carney basked in the glory of the Great Speech, it didn’t require a soothsayer to know this would focus an angry Trump’s gaze back on Canada.
Referring to the Canadian PM as “Governor Carney,” Trump called the recent tariff agreement a mistake and said if a trade deal is struck he would impose a 100% tariff on all Canadian goods, adding that he would never allow China to dominate Canada.
The Canadian Minister for Canada-U.S. trade, Dominic Leblanc, has attempted to smooth things over by stating that the deal with China simply resolved several important tariff issues. “There is no pursuit of a free trade deal with China,” he said.
It must be acknowledged that Trump bears much of the blame for the rest of the western world’s antipathy, having shunned, bullied and embarrassed longtime allies such as Canada, the EU, and even tiny Switzerland and Denmark. Hard as it may be for him to accept, other countries aren’t looking for and don’t want a king of the world.
Trump’s hubris and his petulance may be ugly character traits, but given his ability to severely undermine Canada’s economy, those traits need to be taken into account, which Carney clearly hasn’t.
Canada’s location – The U.S. is our only land neighbour – and trade dependency on the U.S. market makes Canada vulnerable to U.S. retaliation on a scale no other “middle power” faces. Germany, the U.K., France and the others would suffer should a U.S. trade embargo or severe tariffs be imposed on them; however, for Canada the effects would be existential. For that reason, leading a coalition of middle powers against the U.S. should not be something Canada ought to do, especially given Trump’s dismissive and hostile attitude to Canadian sovereignty. Joining such a coalition is one thing; becoming the public face and lead spokesman of what Trump likely sees as some kind of “middle powers” revolt should be left to leaders of countries without an existential stake in how the U.S. reacts.
Carney’s cozying up to China, the U.S.’s most significant adversary and a totalitarian dictatorship that has interfered in Canadian elections, held Canadians hostage (the 2 Michaels), and forced millions of Uighurs into “re-education” camps, looks like a classic case of hopping out of the frying pan into the fire. And following it up with a grandiose speech bound to irritate a petulant American president hasn’t exactly shown strategic brilliance, despite all the accolades the speech received (mainly from sources critical of Trump).
Carney’s response to Trump’s tariff threat – that the government would continue focusing on “what it could control” – is further evidence that Carney has given up on the U.S. as a reliable ally and trading partner. Although most of the blame for this lies with Trump and his disregard for Canadian sovereignty and the longstanding ties between the two countries, Canada is by far the more vulnerable party in the relationship, and getting a deal on canola exports to China – and only in exchange for allowing the Chinese to flood the Canadian market with EVs — isn’t much of a consolation prize, given the seriousness of the threat to the Canadian economy. .
Ontario premier Doug Ford has already said this will have a severe impact on Ontario’s already vulnerable auto sector. Additionally, Chinese EVs imported into Canada won’t be allowed to be sold in the U.S., and also face possible regulatory restrictions in entering the U.S. for personal use.
Trump and Canadians have one thing in common. Both eschewed the Pierre Poilievre-led Conservatives in favour of the Carney-led Liberals: Trump, because he thought Carney would be easier to do business with than maverick Canadian nationalist Poilievre; and Canadians who believed Carney’s economic expertise could help them navigate an economy made difficult by Trump’s pre-election tariff threats and his seemingly blatant disregard for Canadian sovereignty.
Both the U.S. president and the Canadian electorate may soon see the results of that miscalculation.
