Trump wants to go back to 1913. Canadians and Americans will suffer the consequences
Turning back the clock would be neither easy nor painless
Canadians have taken Donald Trump's threats of trade action — now realized — very personally. Understandably and justifiably so.
But the American president's treatment of Ukraine — not to mention his administration's larger withholding of foreign aid — demonstrates that Canada is far from alone. This United States administration is not concerned much with the welfare of other nations or the people who live there.
"So today the United States launched a trade war against Canada, their closest partner and ally, their closest friend. At the same time they're talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator," Justin Trudeau said on Tuesday, sounding newly unencumbered in his final days as prime minister.
"Make that make sense."
Speaking directly to "Donald," the prime minister said he agreed with the editorial board of the Wall Street Journal when it wrote recently that the president's decision to launch a trade war with Canada and Mexico was "dumb."
In fact, the Journal called it the "dumbest trade war in history." But however dumb, it is still now real.
Was it ever about fentanyl?
Going back to November, the official American explanation for tariffs has involved fentanyl, the deadly drug that has killed thousands of people on both sides of the border.
All leaders of all nations should want to do something to combat that scourge. But the notion that the flow of illegal fentanyl across the U.S. border with Canada could somehow justify punitive tariffs on Canadian imports was always flimsy, at best.
Seizures of fentanyl attributed to the northern border by U.S. customs represented 0.08 per cent of all fentanyl seized by American officials in the last fiscal year. Subsequent reporting by the Globe and Mail has shown that even those figures might overstate the problem — at least a third of the 43 pounds of fentanyl attributed to the "northern border" last year did not actually originate in Canada.
Even still, federal and provincial governments made what can only be described as a good-faith effort to respond to Trump's publicly stated reason for threatening tariffs. Resources were marshalled and dispatched. At the behest of the Americans, drug cartels were formally listed as terrorist groups. A "fentanyl czar" was appointed.
It transparently didn't matter — even as some U.S. officials continued to insist this week that the tariffs on Canada and Mexico were about fentanyl.
"I think in what President Trump said yesterday, that there is nothing Canada or Mexico can do to avoid these tariffs, underlines very clearly what I think a lot of us have suspected for a long time — that these tariffs are not specifically about fentanyl, even though that is the legal justification he must use to actually move forward with these tariffs," Trudeau said on Tuesday.
So what does Trump want?
"We have to fold back on the one thing he has said repeatedly, that what he wants is to see a total collapse of the Canadian economy, because that'll make it easier to annex us," Trudeau said.
If that is a remarkable — even frightening — thing for a Canadian prime minister to say about an American president, it is at least a more plausible explanation than fentanyl. But however one judges the seriousness of Trump's annexation threat, what's clear is that the president likes the idea of tariffs.
"The United States of America, before 1913, only had tariffs," Commerce Secretary Howard Lutnick said on Monday. "When we entered World War I, we all had to pitch in, and we created the brilliantly named Internal Revenue Service.… So Donald Trump has announced the External Revenue Service. Let's let outside people, who live and breathe off our economy, let them start paying and let's reduce the tax burden on Americans."
Lutnick's read of history matches Trump's version of events.
"We were at our richest from 1870 to 1913," Trump said last month while signing executive orders in the Oval Office. "That's when we were a tariff country."
There is a lot of American economic history to chew over if one wants to understand why the United States (and most other nations) moved away from tariffs. But as measured by GDP per capita, the United States is six times richer now than it was in 1913.
Only Americans can restrain a president
Lutnick is correct that the United States didn't have an income tax before 1913 (Canada adopted an income tax in 1917). But the United States also didn't have the modern state that it built over the last century (which Elon Musk is now, coincidentally, dismantling).
Over the course of the last 112 years the United States, Canada and Mexico also built an increasingly integrated North American economy — bolstered by a series of free trade agreements, the last of which was signed by Trump himself just six years ago. And while tariffs will generate revenue for the U.S. government, the fees will be paid by American importers — and then by American consumers in the form of higher prices.
Americans will also now have to deal with the ramifications of whatever retaliatory actions are taken by Canada and Mexico (and other countries).
However one feels about the last century of human progress and international relations, turning back the clock won't be particularly easy.
After some early wobbles — the premiers couldn't get on the same page and Poilievre initially embraced the idea that fentanyl seizures at the Canada-U.S. border had "tripled" — the Canadian response is now basically unified, at least on the initial steps. Retaliatory tariffs are being enacted. American alcohol is again being taken off Canadian shelves. Other "non-tariff" measures — including an export tax on Canadian electricity — may follow. The booing of the American anthem will continue until further notice.
The question of what to do after that will be the subject of the next federal election — a campaign that could be just days away now.
Trudeau praised how Canadians have come together over the past month. But he cautioned that the days ahead would not be easy.
"I won't sugarcoat it," he said. "This is going to be tough."
Of course, the same can be said to Americans — and Trudeau did. And therein lies what may be the last, best hope for Canada. That however little Trump cares about Canadians, he and his party might still respond to the feelings of Americans. And Canadians can help make sure Americans feel this.
"The one thing that he's never flip-flopped on [is] trade. He's never liked it," Moshe Lander, a senior lecturer in economics at Concordia University, said of Trump in an interview with CBC News this week. "And so I don't think this is going to be something that he's going to back away from unless he feels that the business consequences are so substantial and the business leaders push back on him so hard that the business person, not the president, is the one who says, OK, I think we've had enough."
But speaking directly to Americans, in remarks that were carried live by American news networks, Trudeau emphasized that Trump's actions against Canada would have real consequences for citizens of the United States.
"Your government has chosen to do this to you," he said. "As of this morning, markets are down and inflation is set to rise dramatically, all across your country."
Canadians can choose how they respond. But ultimately an American president might only be restrained by Americans.
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