A road leads to downtown St-Pierre on the French island territory of Saint-Pierre and Miquelon off the coast of Newfoundland.TARA BRAUTIGAM/The Canadian Press
The eye-popping tariffs slapped on Saint-Pierre and Miquelon – a sleepy archipelago off the coast of Newfoundland – show the senselessness of U.S. President Donald Trump’s trade war against most of the world.
What was Saint-Pierre and Miquelon’s apparent crime? A one-time shipment of halibut and other seafood in July, 2024, worth US$3.4 million.
On his self-proclaimed “Liberation Day” on Wednesday, Mr. Trump made the dubious claim that trading partners were taking advantage of the U.S. through abusive practices that were greatly harming America.
Out of the list of dozens of countries and territories, the highest tariff – 50 per cent – was applied to Saint-Pierre and Miquelon, despite the fact that the islands, situated 20 km off the south coast of Newfoundland, are French territory.
France itself, as part of the European Union, was hit with a much lower 20 per cent tariff. The only other place facing a 50 per cent levy is Lesotho, a tiny country nestled inside South Africa. Meanwhile, America’s traditional foes, Russia and North Korea, are facing no additional tariffs.
Saint-Pierre and Miquelon, where visitors can enjoy being served French wine and pastries in the language of Molière while perched on rocky East Coast shores, is hardly a heavyweight auto or steel producer dumping low cost goods on American shores. Its meager exports – mainly processed crustaceans and shellfish – are sent primarily to Canada, Ireland and France. According to U.S. trade data, the archipelago typically runs a small trade deficit with the United States. Just not last year.
So, why was this archipelago with just 6,000 inhabitants subjected to the steepest tariffs? It appears the numbers were crunched based primarily on a bizarre and concocted formula that focused on the U.S. trade deficit in goods.
Despite being called “reciprocal tariffs,” the calculation doesn’t have a direct correlation with tariffs countries apply to the U.S. Nonsensically ignoring trade in services, the Trump administration is penalizing countries that sold more to the U.S. than were sent the other way. It’s likely that with so little trade with the U.S., the one-time bump in exports last year skewed the numbers and put a target on Saint-Pierre and Miquelon.
Those trying to find logic to these mad methods will be left scratching their heads. The spurious numbers are a convenient tool to justify Mr. Trump’s aggressive rollout of tariffs that will allow him to show dominance over other global leaders and cut income taxes on wealthy Americans. However, the ruse isn’t fooling global markets, which have dived dramatically since Mr. Trump’s announcement.
The so-called formula, and entire exercise, is a farce. And it might be an entertaining one, if the result were not a dire threat to international trade and prosperity.