James Moore is a former federal cabinet minister under prime minister Stephen Harper, and a columnist for CTVNews.ca.
When observing governments and political leaders, it is always wise to heed the counsel of the great poet and wordsmith Maya Angelou when she suggested that “When someone shows you who they are, believe them the first time.”
Regarding President Trump and his belief in tariffs, we must never forget that his belief in tariffs is not a bug of his economic world view, it is the central feature of his ‘America First’ agenda.
His passion for tariffs reaches back to old interviews that you can find on YouTube of him from the 1980s with Phil Donahue, Larry King and Oprah Winfrey, where Mr. Trump passionately made his case for tariffs against Japan.
Whatever one thinks of President Trump and his actions, one cannot challenge the persistency of his view that tariffs are a weapon to be wielded aggressively in America’s defence.
So, it did not come as much of a surprise that after weeks of clandestine talks between ministers of Prime Minister Carney’s government, senior officials and interlocutors, that Canada was struck with tariffs by President Trump.
We all know the index of tariffs by now: the 35% “fentanyl” duty; the 50% sectoral tariffs on steel and aluminum; a 50% tariff on some copper products; and the 25% tariff the non-CUSMA parts of the auto sector that are all now in place.
The pain of the tariffs for Canadians varies, naturally, based on your proximity to effected industries or if you live in the geographic economic blast radius of the impact. And while some analysts emphasize that the average effective tariff rate on goods exports to the U.S. rose just slightly to around seven per cent because only a small share (perhaps 10%, 20%, we don’t quite know yet) of the goods exported to the United States are not compliant with the still in effect CUSMA, that is very cold comfort to frustrated and anxious Canadians.
Further, there is no reason to believe that the current index of tariffs will be the end of the Trump offensive. After striking a “deal” on tariffs with Japan, the president circled back less than a week later, broke his agreement, and increased tariffs on Japan once more.
Uncertainty will continue to be the only certainty on this front and our governments cannot be passive about our obligation to effectively respond to the latest tariff news.
So, what ought we do? I humbly offer a seven-point reaction plan:
1.
Constantly assess the impact of these tariffs on Canadian exporters and their workers. Establish what has yet to be established under this government: Working roundtables and structured feedback loops involving impacted sectors of the Canadian economy Prime Minister Carney can’t continue to (seemingly) do all this work on his own.
Under former prime minister Stephen Harper we had effective working groups and a stakeholder management process that buffeted our government from poor decision making through our negotiations of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership (TPP).
There is never full consensus on contentious matters, but deep and structured engagement with those sectors that are experts in real life global commerce is fundamental to their consent to negotiate on their behalf.
To their credit, prime minister Trudeau and his then trade minister Chrystia Freeland saw the virtues and benefits of this approach, and engaged broadly on the NAFTA renegotiation process that led to a CUSMA agreement that had overwhelming agreement across Canada.
This structure does not exist today and needs to be re-animated.
2.
Consult broadly and consider reasonable and creative public policy options to support unfairly targeted industries in the gap between the implementation of these tariffs and the end of the coming CUSMA renegotiations.
Some very good ideas have surfaced in reaction to the new tariff dynamic; some truly awful ones have as well. The government should consider all options and invite this to be a central debate when Parliament resumes next month.
Members of Parliament have a key role in this process of bringing forward grievances of their impacted constituents and suggesting appropriate remedies. In these tense times, there is a cathartic need for Canadians to know that their anxieties are being heard and expressed in the Parliament of Canada.
3.
Consider reciprocal tariffs in the short term to support industries that are unfairly impacted by the tariffs, but also;
4.
Drop the unrealistic belligerence of the dollar-for-dollar trade warfare angle and tack towards a lowering of temperatures between our countries – for now.
5.
Stand-up significant business leadership, diplomatic capacity and governmental horsepower to genuinely build out export markets beyond the United States for Canadian-made products, resources and services.
Canada is blessed with incredible leaders of enormous capacity who know how to engage successfully in markets around the world. Let’s tap into some of that talent and re-imagine what our diplomatic strategy looks like in this moment.
For decades, our diplomatic focus has been insufficient in its mandate to exploit global markets. We need to create Canadian jobs and prosperity through global sales, and we need to redirect the footprint of Canada abroad with this new agenda.
We genuinely need to do all that we can to find ballast in diversified global alternative markets so as not to be held hostage by the whim of the current president.
6.
“Build, baby, build” were Prime Minister Carney’s words on election night as he summarized his mandate. Bill C-5, also known as the One Canadian Economy Act, was a step in the right direction.
The meetings with premiers since the election have raised expectations and hope that something meaningful is going to happen. Show us meaningful progress. Do it now.
7.
Continue to firmly, clearly and tirelessly advocate for the virtues of the North American trading alliance that has created more wealth than any other economic partnership in human history.
From the Canada-U.S. Free Trade Agreement to the North American Free Trade Agreement, to the Canada U.S. Mexico Agreement, the evidence is everywhere of the success and stability of the North American economic alignment to protect our collective and individual interests. And we must never tire of reminding Americans that the North American trading alliance has been – and must continue to be – the critical counterbalance to the rise of China and their too-often defiance of rules-based, good faith, reciprocal trade with their trading partners.
Canada can’t stand still and hope for better days or that the president will reverse his lifelong romance with tariffs. The president believes in wielding the tariff weapon and America is thirsty for the revenue the tariffs return.
The tariff reality – in a mild or severe form – is here for years to come. Much of what happens may be beyond our control, but what is within our control needs to be pursued ferociously by our political leaders.
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