Lights illuminate the Ambassador Bridge that stretches between Windsor, Ont. and Detroit, Mich. on Mar. 6.Chris Young/The Canadian Press
There’s no doubt about what this part of the trade war means for Canada. Donald Trump’s auto tariffs are a smash and grab intended to dismantle Canada’s auto industry and ship it to the United States.
That’s one, loud, horn-bleating signal about the bigger change: It’s the end of the idea of a North American economic bloc.
Now what?
That’s the question at the heart of the election campaign. On Thursday, Conservative Leader Pierre Poilievre and Liberal Leader Mark Carney offered different answers.
Mr. Poilievre talked about boosting economic competitiveness, mainly about cutting taxes and unleashing oil and gas and mines. Mr. Carney spoke about industrial strategy. Mr. Poilievre was telling the U.S. President to “knock it off,” and start trading again, or others would want Canada’s “resources and expertise.” Mr. Carney was declaring that the U.S is now an unreliable partner and Canada has to rewire its industry for the new reality.
Mr. Carney spoke at length about the auto sector – talking about retooling it to create all-in-Canada supply chains and insisting that it can survive. Mr. Poilievre, bizarrely, delivered 22 minutes of prepared remarks in a 34-minute press conference with hardly a word about the auto industry.
Pierre Poilievre does his best to miss the point on foreign interference
This was a day when the integrated North American economy was getting a termination notice, starting with the auto sector, the continent’s most famously integrated industry.
The idea of North America as an economic region is the core of the industrial and economic strategy that Canada has pursued for 40 years: integration with the U.S. economy through trade deals and border agreements, and so on.
Mr. Trump isn’t just threatening to kill that. He is killing it.
He is apparently set to dilute the 25-per-cent tariffs that come into effect April 3 a little bit, so that cars shipped from Canada that contain U.S. parts will get hit with a lesser tariff base depending on their non-U.S. content. But that’s to ease the pain on U.S. automakers in a sector where parts famously cross the border a half-dozen times before a car is assembled.
Mr. Trump had watered down a separate set of auto tariffs a month ago, too. But his explicit goal is to force automakers to move to the U.S., and he is using threats of tariffs, as much as tariffs, to make it happen.
“The auto pact was created when I was born,” said Mr. Carney, born in 1965. “Now it’s finished. With tariffs, it’s finished.”
Of course, Mr. Carney and Mr. Poilievre and just about every politician in Canada waved the flag and promised they will fight. Mr. Carney returned to Ottawa in mid-campaign to chair a cabinet meeting when he could have held that meeting by video call. Mr. Poilievre didn’t change his B.C. tour plans.
More importantly, their economic prescriptions were very different.
Mr. Carney promised he would develop “comprehensive industrial strategies” for the sectors Mr. Trump is targeting. For autos, he said, “the core of that is to build out the auto sector and our auto supply chain in Canada as much as possible, instead of autos going back and forth across the border six times and getting a tariff each time.”
And he promised that the industry could survive in Canada. “We can sustain an auto industry, with the U.S. having tariffs, with access to other markets, provided we engage very deliberately, in partnership – government, business, labour – to reimagine the auto sector and rebuild, retool that auto sector,” he said.
Perhaps. It’s not easy to retool an industry built for the North American market to sell to new customers oceans away.
Mr. Poilievre had a different approach. He wasn’t talking about retooling the auto sector. He was talking about unleashing resource industries, promising a boom for oil and gas and mining, promising a Conservative government would approve resource projects quickly.
He often talks about lowering taxes and cutting regulation to make Canada’s economy more competitive. He is, at heart, a believer in low-tax, laissez-faire economic policy and he sees that approach – not industrial strategies designed by governments – as setting the conditions for a strong economy. He’s not an interventionist.
Mr. Poilievre talked about boosting the economy. But on a day when the big news was about an existential threat to Canada’s auto sector, he didn’t have much to say about saving it.