President Donald Trump signs an executive orders in the Oval Office of the White House in Washington, on March 6.MAANSI SRIVASTAVA/The New York Times News Service
As usual, it took very little time for U.S. President Donald Trump to walk back his latest round of tariffs on Canada and Mexico.
His put his long-promised blanket 25-per-cent tariffs into effect on Tuesday, arguing his neighbours hadn’t done enough to stop fentanyl from illegally entering his country. But the next day, after getting an earful from executives at Ford, General Motors and Stellantis, he announced a 30-day reprieve for cars and auto parts covered by the United States-Mexico-Canada Agreement.
And then, another 24 hours later, he announced a similar temporary reprieve for all the other goods covered by USMCA, the deal he negotiated and signed in 2020.
These could be empty gestures, and Mr. Trump could put comprehensive tariffs in place on April 2 as planned. Or they could signal something more positive. It is impossible to parse his erratic behaviour. Most of the world thought Mr. Trump would never go as far as he has. Yet here we are, with massive tariffs coming in less than a month.
These painful gyrations mean Canada and other countries in Mr. Trump’s crosshairs need to ignore what comes out of the President’s mouth and quietly yet firmly impose dollar-for-dollar retaliatory tariffs and continue to broaden their trade partnerships and shore up their own economies, come what may.
Everyone points out that Mr. Trump’s tariff games will dramatically slow the U.S. economy and are bad for U.S. manufacturers and consumers. But the President seems to think they are good for Donald Trump.
He claims to be unconcerned about the massive stock-market losses precipitated by this week’s tariff announcements and says he doesn’t overly care if Americans lose jobs or see their spending power decrease. He said Tuesday that he is okay with “a little disturbance.”
He has also repeatedly changed his reasons for imposing tariffs on Canada and refuses to make clear how it can meet his demands, whether it be by stopping a minuscule amount of fentanyl from flowing south, or preventing illegal immigration, or not treating the U.S. “horribly,” as he puts it.
It is impossible to know what his end game is, or what position he will take from hour to hour on the status of his tariffs, or whether he will announce yet another power-tripping, last-minute reprieve next month.
So, forget fentanyl. Forget immigration. Forget trade deficits. Forget everything and anything Mr. Trump suggests is his reason for imposing, removing and reimposing tariffs on Canada, Mexico, China and, eventually, Europe and the rest of the world (except Russia, one supposes).
Instead, assume that Mr. Trump’s strategic chaos is not a means to an end but the end itself. The more instability he causes, the more power he holds and the more his need to broadcast that power is fed. That would make any consequences in his country – lower investment, higher unemployment, higher costs – an acceptable cost for him.
That in turns leaves dollar-for-dollar retaliation as the only sensible option. It is a fixed threat that doesn’t depend on Mr. Trump’s next announcement. It’s not about what is targeted or what is being demanded. It is only about how much is targeted, an amount set by Mr. Trump himself.
Ottawa has put 25-per-cent tariffs on $30-billion worth of U.S. goods and will increase that to $155-billion in 19 days if Mr. Trump’s tariffs are still in place. It and the provinces are also considering holding back key exports, such as critical minerals, or putting a surcharge on electricity exports, as Ontario says it will do as of Monday.
Canada must be resolute and insist that there will be no convenient carveouts or negotiation of its stance. Ottawa and the provinces must also continue to remove interprovincial trade barriers and get their fiscal houses in order, under the assumption that continental free trade is over.
Above all, Canada must drown out the noise and remain unflinching in the face of Mr. Trump’s provocations. It must hold its ground while the potential loss of MAGA support caused by higher prices and lost jobs, or persistent stock market dives and the pushback from an unsettled business community, take their toll on Mr. Trump’s resolve.
Whatever Mr. Trump decides tomorrow, or next week, or the week after that, this country can and will do what is necessary, if that’s what he wants.
Keep calm and Canada on.