New President Donald Trump faces a ‘rude awakening’ if he goes ahead with tariffs and launches a trade war with Canada. Image by Lightspring via Shutterstock.
Canada may find itself in a stronger position than the United States if a trade war breaks out between the two countries.
Don’t take my word for that. That’s Paul Krugman speaking.
You know, the distinguished professor of economics, winner of a Nobel prize in that field and for almost 24 years until late last year the New York Times’ widely respected economics columnist.
Now publishing a Substack column, Krugman argued in his post Saturday that U.S. president-elect Donald Trump, being sworn in today and vowing to declare trade war on Canada, may imagine that the United States would have the upper hand, but it ain’t necessarily so.
“He’s likely to have a rude awakening,” Krugman wrote, after celebrating the fact that since Justin Trudeau’s “embarrassing, grovelling visit to Mar-a-Lago… Canadians seem to have found their spine.”
“If you look at the actual composition of U.S.-Canada trade, it suggests if anything that Canada is in a stronger position if trade war breaks out,” he wrote. This is because, “outside oil and gas, U.S. producers have more to lose in terms of reduced sales in Canada than Canadian producers have to lose in reduced sales to the United States.”
Moreover, Krugman speculated (sensibly), “Trump really, really won’t want to impose tariffs on Canadian oil, which would directly increase energy costs in the U.S. Midwest.”
Indeed, he added, “Canada could weaponize its oil by imposing export taxes, and officials are reportedly considering that option if the trade war escalates.”
Meanwhile, speaking of grovelling trips to Mar-a-Lago and elsewhere in the Benighted States, no sooner was she supposedly back in Alberta than Premier Danielle Smith headed off to Washington on the weekend to grovel at the feet of Donald Trump. Or, as the government’s official fiction writers put it in their news release, to “meet with key decision makers, governors, members of Congress and private sector leaders.”
“Alberta’s on-the-ground presence will help build relationships and start critical conversations that will lay the groundwork for collaboration with the new U.S. administration and reap benefits for Albertans, Canadians and Americans,” the presser chirped.
Actually, it probably won’t, Trump being Trump. But it might be worth a try anyway were Smith not refusing to sign onto the statement endorsed by all other Canadian premiers on how to respond to the threat of Trump’s proposed economic sanctions against Canada, which he also says he’d like to absorb as the 51st state.
Even reliably pro-UCP Postmedia political columnists are now meekly suggesting it might have been better if Smith had signed onto the plan, if only to prevent the federal Liberals, led by whomever replaces Trudeau, from campaigning against her sovereignist provincial government in the next federal election. If that happens, that will be an amusing counterpoint to the way Smith’s United Conservative Party campaigned against the federal Liberals and NDP in Ottawa to beat the NDP.
Indeed, Trudeau said of federal Conservative Leader Pierre Poilievre on Friday that “either he stands up to fight for all Canadians alongside all premiers and the federal government that are doing that, or he chooses to stand with Danielle Smith, Kevin O’Leary, and ultimately, Donald Trump.”
The Calgary Herald’s Don Braid even quoted former UCP premier Jason Kenney saying that it’s important, “to the greatest extent possible, that all the premiers in the broader Canadian leadership be united in our approach to these ridiculous threats coming from the president-elect.”
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As noted here before, though, such a move by Smith could have sparked a rebellion by the MAGA camp in her own caucus and cabinet that would have seen her put out to pasture with Kenney, the first UCP premier and the last one to run afoul of the “Take Back Alberta” lunatics (his word) who had taken over the party he founded.
Since Smith has already broken ranks with the rest of Canada’s first ministers, it’s a certainty that nothing but distraction and division on the Canadian side will come from her six-day Washington junket.
Meanwhile, on Friday Prime Minister Trudeau named former Alberta NDP premier Rachel Notley to a new council on Canada-U.S. Relations.
Brian Topp, who served as Notley’s chief of staff and was once a member of a NAFTA advisory council, was also named to the group.
Other members of the 18-member council include former federal Progressive Conservative leader and Quebec premier Jean Charest, former Nova Scotia Liberal premier Stephen McNeil, Unifor president Lana Payne and senator and former Canadian Labour Congress leader Hassan Yussuff.
It will be interesting to see if this is just window-dressing, or if the influence of this council perseveres after the Trump trade crisis has passed.
