U.S. President Donald Trump and Prime Minister Mark Carney at a working dinner in Gyeongju, South Korea, on Wednesday.Adrian Wyld/The Canadian Press
Drew Fagan is a professor at the University of Toronto’s Munk School and a visiting professor at Yale University. He is a former head of policy planning at what is now Global Affairs Canada.
Amid the tempest over the tariff ads, including U.S. Ambassador Pete Hoekstra’s indignant response, there’s something else the Ambassador said last week that should worry Canadians more, as well as Americans who are concerned about their country’s direction: His accusation that the ads quoting Ronald Reagan on tariffs amounted to “interfering in the political affairs of a sovereign nation.”
U.S. exceptionalism takes many forms, and one is political openness, including in the way foreign governments are able to wheel and deal throughout the U.S. largely in the same ways as American business entities. This has remained true throughout the years, even though other countries don’t like U.S. diplomats walking their halls of power in the same way. Other nations are sensitive to American authority and influence – Canada among them.
U.S. President Donald Trump has turned this upside down. He openly meddles in other countries’ politics, including Canada’s in the most recent election, but takes umbrage when others do it to the U.S. in even small ways.
This matters as Ottawa seeks a trade deal it can live with.
Trump says Carney apologized for Ontario anti-tariff ad, but talks still off
U.S. Senate vote on nullifying tariffs on Canada shows opposition to Trump trade policy
Canada is among the best at the U.S. game. The original free-trade talks 40 years ago involved the White House primarily, but the Canadian team also lobbied Capitol Hill. Congressional approval wasn’t in doubt – the purpose was to ensure that members of Congress knew how much Canada should matter to them, such that they might press the White House on key points. This ‘both ends of Pennsylvania Avenue’ effort came to be standard fare for other countries, too.
Canada is also good at getting individual state governments onside. Called the “doughnut strategy” during the USMCA negotiations, Canada hoped that the policy hole in Washington during the first Trump administration might get filled by influential state voices. We’ve advertised in the U.S. during plenty of sticky situations over the years. Our old concern, however, was just whether the ads would get noticed in the cacophony of U.S. politics.
But it’s proving seemingly impossible this time for Canada to use any tactic to respond to the onslaught of criticism and bullying from Mr. Trump. Cite facts to counter false accusations, such as Canada being a big source of fentanyl? The Trump administration will ignore them. Engage in tit-for-tat retaliation? Impossible, because it hurts Canada’s medium-sized economy more than the huge U.S. one. Limited retaliation, then? Ontario Premier Doug Ford tried this with electricity exports, but stepped back when the Trump administration called him out. Meanwhile, the White House pressures U.S.-headquartered multinationals to relocate south, especially those in the auto industry, even though it was founded as a cross-border enterprise.
Prime Minister Mark Carney’s response has been to play for time, seek out new markets, and build infrastructure, such that Canada becomes its own best customer, as the United States is. The upcoming budget will boost spending for big projects, but it will also include spending cuts to make room for higher priorities. Mr. Carney has spoken of short-term pain for long-term gain, and likely will again as he presents his first budget.
This may well understate things. Canada’s reorientation might conceivably approach the hard times the country faced in the decades after Confederation in 1867, caused in part by U.S. abrogation of free trade.
Canada exists unobtrusively in a zone between domestic and foreign vis-à-vis the United States. The bureaucratic linkages, and others, are unlike anything the U.S. has with another country. They still leave Canada with plenty of policy manoeuvrability.
Free trade advanced a similar kind of compromise. Canada would attach its economy more closely to the U.S., but it would do so without political levers – such as those that exist in the European Union – to protect the smaller party. It was termed a “leap of faith,” but also deemed a reasonable risk.
Canadian officials say the two sides were inching toward a deal before the ad blitz set fire to the current trade negotiations. But, of course, there’s a big gap between a sincere response and a pretext.
If it was the latter, Canadians really should wonder whether Mr. Trump intends to put Canada between a rock and a hard place – to choose between some form of political union within a single economic space, or the kind of tall-border mercantilism that heavily favours the United States.
With friends like these …