People who had an appointment scheduled for the visa process to the U.S. and were cancelled, wait outside the United States embassy in Bogota, Colombia on Jan. 27.Luisa Gonzalez/Reuters
On his path back to the White House, Donald Trump often repeated a refrain about tariffs, which he called “the most beautiful word to me.” In his first week as U.S. President, he made clear what he meant, telling Colombia he would immediately impose 25-per-cent tariffs if the South American country refused to accept military flights with deported migrants – and double the severity of the trade measures if his demands were not met.
Within hours, the situation was resolved and the tariffs were not enacted. Colombia agreed to accept any and all migrants returned from the United States, the White House said.
“America is respected again,” Mr. Trump said Monday.
For Canada and Mexico, the brief but intense spat carried obvious significance. Mr. Trump has told both countries he also intends to impose 25-per-cent tariffs on their goods beginning Feb. 1, citing the movement of narcotics and migrants into the U.S.
He has, too, ordered a wide-reaching re-examination of North American trade that includes new scrutiny for the Canada-U.S.-Mexico trade agreement.
But Mr. Trump’s quick move to rescind the tariffs on Colombia suggests that he can be swayed from carrying through on at least some of his threatened acts – an outcome that Canadian leadership has watched closely.
“We know that President Trump is using tariffs as a way to put pressure on countries. That’s what he’s doing. And that will continue,” Foreign Minister Mélanie Joly said Monday.
Canada, she added, has sought to meet Mr. Trump’s demands by pledging a new focus on border security, with an additional $1.3-billion in funding.
Canada’s approach “is basically preventing tariffs, and also making sure that we’re ready,” said Ms. Joly, who is planning a trip to Washington this week.
Mr. Trump on Monday celebrated his own success with Colombia, warning other countries that if they do not co-operate with his deportations, “they’ll pay a very high economic price.”
Trump uses tariffs as a foreign policy weapon and he’s willing to strong-arm an ally into submission
But his spat with Colombia also demonstrates his willingness to relent, raising the possibility that Canada, too, may be able to strike a deal with Mr. Trump.
“This Trump team sees tariffs as a source of economic leverage and negotiation leverage with countries to extract other concessions from them,” said Sameera Fazili, who was a deputy director of the National Economic Council under Joe Biden.
But, she said, it is much easier to threaten Colombia, which conducts a relatively small amount of trade with the U.S., than it is to threaten Canada and Mexico, its two biggest trading partners.
“By implementing really high tariffs on Canada and Mexico, the American consumer – who is already smarting from inflation and higher price levels – is going to see prices go up,” Ms. Fazili said. “That could make it politically challenging for the President to keep tariffs in place for a long period of time.”
Still, Ottawa’s entreaties have to date produced little evidence that the U.S. President is prepared to change course. Rather than change course, he has repeatedly suggested Canada instead accede to becoming part of the U.S.
It’s another demonstration of the considerably different approach Mr. Trump has taken, with a willingness to discard past approaches.
“There needs to be a recognition that things are changing and the dynamics that we have been involved in for decades – those rules don’t apply any more,” said Everett Eissenstat, a trade expert who was deputy director of the National Economic Council during Mr. Trump’s first administration.
“We’re in a new kind of a dynamic.”
The situations for Colombia and Canada are “not necessarily equivalent,” he said. Where Colombia could resolve Mr. Trump’s grievance by allowing aircraft to land, his complaints about Canada have been more extensive, including defence spending and a hefty trade imbalance.
A more wide-ranging conversation will be needed that includes trade, energy and national security together – building up a new kind of relationship rather than working from what stood before, said Mr. Eissenstat, who is now a partner with Squire Patton Boggs, a Washington-based law firm.
Perhaps more importantly, Mr. Trump showed a willingness to take draconian measures against Colombia that went far beyond tariffs. He threatened a travel ban and visa revocations for government officials and their supporters, additional customs inspections of all goods from Colombia and a raft of financial sanctions.
“This idea of tariffs being the only tool available – we’re starting to see other tools being implemented as well,” Mr. Eissenstat said.
“That’s one lesson I wouldn’t want people to walk away from.”
The new Trump White House is also notable for its greater unity on trade measures, said Lori Wallach, a prominent critic of U.S. trade deals who is director of Rethink Trade at the American Economic Liberties Project.
And while Canada has argued that its trade surplus with the U.S. is largely the result of energy exports, Mr. Trump will not have ignored the widening of that surplus since he renegotiated North American free trade, she said.
That is likely “a thorn in the side of Trump Two,” she said.
Still, she said, the problem for Canada lies in how to address that.
Countries like China and Mexico have enjoyed trade surpluses with the U.S., she said, in part because of practices that have benefited their countries to the detriment of the U.S.
“However, there is nothing in Canada like the systematic crushing of wages in Mexico or crushing of wages and jacking up of subsidies and devaluing of the yuan that you see in China,” she said.
“It’s not clear to me what the unfair advantage is with Canada.”