Conservative Leader Pierre Poilievre outlines his North American auto policy during a press event at Cavalier Tool & Manufacturing Ltd, in Windsor, Ont., on Sunday.Dax Melmer/The Canadian Press
There is a nostalgic, almost wistful thread that runs through Pierre Poilievre’s approach to trade with the United States, as if he still can’t believe the happy days of the past are gone and therefore thinks it’s easy to put forward a simple idea that will bring them back.
On Sunday, when the Conservative Leader presented his plan to save Canada’s auto sector, the centrepiece was digging into the past to deliver a magic formula that would bring back the halcyon days of cross-border auto trade of 16 months ago.
Mr. Poilievre proposed to revive the one-to-one rule of the 1965 auto pact, which essentially presses automakers to make as many cars in Canada as they import into Canada tariff-free.
That idea isn’t completely crazy – it’s just that it has already been batted around a lot in trade circles over the last year, and indeed a similar idea has been taken up by the Liberal government. But it isn’t going to force a reversal from the person who has disrupted Canada-U.S. auto trade, U.S. President Donald Trump.
More than a year after Mr. Trump’s trade war hit the auto sector, Mr. Poilievre has entered the debate with a magic bullet from 1965, calling it the “only hope” for keeping an auto sector in Canada.
Poilievre pitches tariff-free auto industry pact with U.S.
At a press conference in Windsor, Ont., on Sunday, Mr. Poilievre said Canada’s auto sector can’t survive without access to the U.S. market, and that Prime Minister Mark Carney’s efforts to lure Japanese and other foreign automakers Canada are an “illusion” because none of those carmakers will open plants here unless they have tariff-free access to the U.S. market. And he might well be right about that.
But the idea that the simple solution is the old auto-pact rule – requiring automakers to make as many cars as they import into Canada tariff-free – is a misreading of the trade war.
Mr. Poilievre argued on Sunday that U.S. automakers will want to keep open access to sell cars in Canada so imposing that old auto-pact rule “is how we’re going to get the United States to agree to removing tariffs.”
But Mr. Trump hasn’t given a hoot for the billions that U.S. automakers are losing because of his trade policies. He isn’t out to protect their profits. He is using tariffs to press them to move plants and jobs from Canada to the U.S. And he, too, has said that Canadian car plants are doomed if he keeps tariffs in place.
Mr. Poilievre still seems to underestimate Mr. Trump’s trade threats.
Poilievre announces U.S. tour to talk trade, promote auto and energy sectors
When Mr. Trump first returned to the White House, the Conservative Leader said he’d explain to the President that the U.S. gets a good deal, including cheap oil, out of trade with Canada – as if that would make Mr. Trump back off tariffs. In the spring election campaign, he said he’d tell Mr. Trump to “knock it off.”
More recently, Mr. Poilievre argued that Canada should propose to align its auto-trade policies on China with the U.S. But that’s what Canada was doing when Mr. Trump began his second term and imposed tariffs. Now Mr. Carney has opened the door to the import of 49,000 Chinese electric vehicles a year –and while that’s risky, it provides a little leverage with the U.S.
Mr. Carney’s government has decided it will adopt some preferential tariff measures, although they won’t be enough on their own to convince a company such Hyundai to build an auto-assembly plant in Canada or convince Mr. Trump to drop auto tariffs.
Efforts to find alternatives and leverage are necessary but they aren’t a simple way to force Mr. Trump to give in.
The best hope for such a deal is probably that the U.S. President might at some point be so consumed with other political problems – war, inflation, midterms and bad polls – that he wants to settle the issue with minor Canadian trade concessions. That’s what he did in his first term.
Mr. Poilievre is right to argue, as he did in a speech in February, that Canada can’t simply replace U.S. trade and that Canadian leaders should look to work with U.S. leaders beyond Mr. Trump. But the old trade relationship isn’t just snapping back into place easily. Reviving old ideas won’t be an easy way to turn back the clock.