Iowa Sen. Chuck Grassley, left, speaks with United States trade representative Jamieson Greer during a visit to the Iowa State Fair in Des Moines, on Aug. 14.Kelly Geraldine Malone/The Canadian Press
When The Canadian Press tracked down U.S. Senator Chuck Grassley at the Iowa State Fair last week, he offered some pithy analysis of Donald Trump’s threat to impose whopping new tariffs on a large swath of Canadian goods.
“I think the President is probably using them as a lever,” Mr. Grassley said.
Gee, thanks for explaining that, Mr. Grassley. Canadians have understood for a long time that the U.S. President is using leverage to demand concessions from Canada.
“Lever” doesn’t quite do it justice this time. Mr. Trump is threatening to set off a grenade in Canada-U.S. trade.
If there is no backing down by Wednesday on the part of the Canadian government – and the provinces, too, because a big cause of the American ire is the banning of U.S. booze from provincial liquor stores – the President threatens to pull the pin.
Mr. Grassley, the Iowa senator, also told The Canadian Press that this episode could serve as a “wake-up call” for Canada – as if this country hasn’t been alive to the threats till now.
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Canadians know they are in another Trump trade psychodrama. They are used to it, or fed up with it, but still consumed with it.
This time, the brinksmanship is getting closer to the brink.
Mr. Trump set the Aug. 19 deadline, with the U.S. seeking a whole list of Canadian concessions. But the legal casus belli for the new tariff threats is mostly about Canadian retaliation – counter-tariffs on autos and provincial booze bans. U.S. Trade Representative Jamieson Greer said the U.S. is “not going to tolerate” retaliation for U.S. tariffs.
And this time, there isn’t just pressure on Prime Minister Mark Carney to get a deal to alleviate the tariffs. Now he also faces pressure to fight back.
And if Mr. Trump goes ahead with his tariff threat on Wednesday, Mr. Carney will face public pressure to retaliate. How can he not?
The Globe and Mail reported last week that Canada’s chief trade negotiator, Janice Charette, had told Mr. Greer that if Mr. Trump imposes the new tariffs it amounts to a “cliff” for Canada that will end talks.
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It wouldn’t be easy for Mr. Carney to strike the deal Mr. Trump is demanding, either. He insists U.S. booze be put back on the shelves of provincial liquor stores, but Ontario Premier Doug Ford would have to swallow himself whole to end the booze ban if the U.S. doesn’t alleviate its tariffs on Canadian autos and steel. There isn’t much hope for a deal on lumber, which B.C. Premier David Eby wants, and Quebec Premier Christine Fréchette will want the U.S. to make a deal on aluminum. Ms. Fréchette might have other reasons not to co-operate.
The third complaint in the presidential findings that legally justify the new tariffs is about the way Canada interprets its USMCA obligation to open a portion of Canada’s dairy market to U.S. products. Changing that interpretation would be a small trade concession, but still a potential political football in Quebec. And there’s a provincial election – with the separatist Parti Québécois leading in polls – just seven weeks away.
Those are just the complications on Mr. Carney’s own side. Going into meetings on Sunday, the U.S. side hadn’t offered serious concessions that could form the basis of a deal.
Of course, U.S. negotiators could show up at the last minute with a “final” offer. They could play chicken. Or, as he has in the past, Mr. Trump could delay the imposition of the new round of tariffs for another month, or two.
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But it is Mr. Trump who set the Aug. 19 deadline. He has created some deadline pressure on himself, too, to either make a deal or trigger the tariffs.
The pattern of threats and demands for concessions - made by a President cheating on the USMCA deal he signed is familiar enough now. Canadians don’t need to be told it’s a lever for Mr. Trump to get what he wants.
Mr. Grassley also told The Canadian Press that while there will be tough trade negotiations, they can’t be used to destroy the USMCA. But that’s happening piece by piece.
The trade deal Mr. Trump signed eight years ago provides a set of rules, but in the long run, real commitments are now binding on Canada but not on the U.S. There have been a lot of wake-up calls.
Mr. Trump keeps taking things back to the brink.