Donald Trump has effectively declared war on Canada with his decision to impose a 25% tariff on all Canadian exports to the U.S.. Such tariffs are illegal under the USMCA which Trump himself negotiated so itB次元官网网址 pretty clear we are dealing with an scofflaw here.
The central question is what can we do about this? Some commentators advocate placating Trump by simply acceding to his bullying. In case you are wondering, this means unemployment the like of which we haven鈥檛 seen since the Great Depression.
Others advocate a sustained period of lobbying Congress and major businesses doing business over the border hoping that this will eventually change the stance of Trump and his advisors. No reason not to try, but I doubt it will work in time to avert disruption.
So how do we get to an acceptable result for Canadians? Trump only understands blunt force. We, historically the closest ally of the U.S., are treated by Trump with no respect and supreme indifference. He may need to experience a little of the medicine he plans to dispense.
Remember, this is not at bottom a trade dispute 鈥 it is an 鈥淚 want what I want and you will give it to me 鈥 or else鈥 standoff. Countervailing tariffs, no matter how well-designed, won鈥檛 solve the problem.
But there are several things we could do to get TrumpB次元官网网址 attention. First, we could close off the St. Lawrence Seaway beyond Montreal, explaining that repairs are needed and might take a year or more. I鈥檓 certain that American ports on the Great Lakes would notice the decline in the number of foreign vessels. Of course, the federal government would compensate Canadian ports on the Great Lakes for loss of business.
Or we could adopt a 鈥淟et the southern bastards freeze in the dark鈥 strategy. The feds could unilaterally stop the export of electricity to the U.S. by Hydro Quebec - with the federal government compensating Quebec for the lost revenue. And/or the export of both oil and natural gas to the US could be shut off arguing, in the name of national security, we need to export oil and gas only by the TransMountain Pipeline to Greater Vancouver while at the same time placing a service fee on U.S. tankers that might try to buy the oil and gas from that outlet. Again, the federal government would compensate producers in Alberta for any diminution of total sales.
How about shutting off the water? Rather than sign a revised Columbia River Treaty with the U.S., we could begin to build a diversion of the Columbia to the Fraser River to build new energy generation capacity - again arguing that this is necessary for national security.
Fast forward to Jan. 20, 2025. We could reveal our strategy of choice one hour before TrumpB次元官网网址 inauguration as the 47th President. That steals the front pages of all the U.S. newspapers and is a lead story on FOX News on Jan. 21. I wonder if Trump would realize that he is just getting a dose of his own medicine.
Now, lets think through the consequences of these actions. The lost electricity exports to the U.S. would immediately have a profound impart of the New England states and they would have no ability to replace the missing power. The loss of Alberta oil and gas, about 10% of total needs in the U.S., would, only over time, be replaced by alternative suppliers at a higher price.
The non-renewal of the Columbia River Treaty would effectively shut down the major wine-growing capacity in central Washington state. And, we could similarly shut off exports of gravel and nickel and other critical metals.
While these radical actions might be expensive for the federal government, they would certainly grab TrumpB次元官网网址 attention. Do you think that Trump might hear from citizens who suffer the attendant losses?
And, certainly, the rest of the world would learn that, while we might have less than one-tenth the population of the U.S., Canada has backbone and perhaps they should as well.
Trump could find his usual strategy of being a loud-mouthed bully requires some adjustment to reality.
David Bond is a retired bank
economist who resides in B次元官网网址.
