Canada must avoid rushing into a trade shakedown

Open this photo in gallery:

Michael Harvey is executive director of the Canadian Agri-Food Trade Alliance, a coalition of national and regional organizations that represents producers, processors and exporters from across Canada’s major agri-food export sectors.

U.S. President Donald Trump’s talent for commanding headlines and forcing reactions from allies and adversaries alike has few equals. In Canada, where our economy and media are deeply entwined with the United States, this can create a dangerous tendency: We risk engaging with American trade threats on Washington’s timeline, rather than acting on our own strategic terms.

That risk has resurfaced with a new volley of tariff threats. The Trump administration issued letters to dozens of countries, warning of possible tariffs. For Canada, that threat takes the form of a proposed 35-per-cent tariff on our exports to the U.S., set to begin Aug. 1. While that number is headline-grabbing, administration officials have already signalled that goods compliant with the Canada-United States-Mexico Agreement (CUSMA) would likely be exempt.

The threats are serious. But the appropriate response is not haste. It is discipline. Canada must avoid rushing into a deal out of fear or frustration. A strategic, measured approach is in our national interest.

Canadian agri-food exporters currently benefit from tariff-free access to the U.S., a market that remains our largest and most integrated. Trade in this sector defies simple categories: Canadian livestock and crops cross the border, are processed or packaged in American facilities, then sold back into Canada and beyond. We don’t just trade food with the U.S. We produce it together.

Analysis: Harsh, informal, wide-ranging: How Trump’s trade talks have changed

U.S. producers, by and large, understand this. They have not demanded tariffs on Canadian agri-food goods, because they rely on Canadian inputs to keep their supply chains efficient and competitive. This interdependence makes arbitrary trade actions risky on both sides of the border.

Even as his erratic trade threats go against the spirit of CUSMA, Mr. Trump continues to present the agreement as a personal victory. He called it “the greatest trade deal ever negotiated” and appears hesitant to unravel it entirely, particularly in sectors such as agriculture.

Still, the temptation to negotiate quickly is real. Threats often provoke that kind of response. But this administration has a track record, and that record is worth remembering. This is not the first time arbitrary trade deadlines have been set, only to be walked back or redefined. Legal challenges in the U.S. continue to test the scope of presidential authority on tariffs.

The economic costs, too, have been slower to surface. Some companies have absorbed them. Others have adjusted supply chains. But if the tariffs persist, they will raise prices for American consumers and cut into the competitiveness of American businesses. That is not a theoretical consequence. It is an economic fact, and one the President may choose to avoid.

Opinion: Trump’s trade deal with Europe is a bad precedent for Canada

Canada’s response must be shaped by that reality. Speed is not strategy. Scrambling for a deal could mean conceding more than necessary, especially to a counterpart that has shown little regard for enforcing agreements once they are signed.

What is at stake here is not only access to a key market, but our role in a broader global system. The international, rules-based trade order is under pressure, but it still functions. Undermining it to appease an unpredictable administration risks long-term harm. More than 90 per cent of Canadian farmers depend on trade. They rely on rules, not shifting political pressure.

That does not mean we should ignore sectors already under pressure. Canada can provide targeted support, but it should do so within the bounds of our World Trade Organization obligations. It is possible to defend national interests without abandoning global standards, as the European Union has recently shown in its approach to Chinese electric vehicles.

This is a moment for clarity, not concessions. Canada has options. We have legal protections, global partners and economic leverage. Most importantly, we have time.

So let the letters come. Let the deadlines pass. Let the noise play out. We know how this game works.

Sometimes, the smartest move is to rag the puck.