Canada’s Trade Battle With the U.S. Intensifies

By Henry Srebrnik, Saint John Telegraph-Journal

The tariff battle with the United States continues. U.S. President Donald Trump castigated Canada in a news conference Sept. 2, alleging the U.S. loses anywhere from 60 to $100 billion a year in cross-border trade deficits.

He suggested that the U.S. has no need for trade with Canada. “They need us, we don’t need them. They’ve taken advantage of us for years, and it’s time to stop,” he maintained. Describing the trade relationship as “a very unfair deal,” Trump said he considered Canada harder to deal with than China or Vietnam.

U.S. Vice-President JD Vance on Aug. 24 claimed that “Canada and China have been the two worst countries when it comes to trade policy anywhere in the world. What a shame that is. China, you of course expect; they're our big economic competitor,” he said.

U.S. Commerce Secretary Howard Lutnick accused Canada of walking away from the negotiations for political purposes. “It was manufactured,” insisted Lutnick on Aug. 27. “So there’s the sovereignty party trying to run, and they’re in the lead in Quebec and so this was Mark Carney manufacturing something that would try to keep them from winning, and then you have Alberta has an independence resolution.”

American columnist Victor Davis Hanson, on his Sept. 1 podcast on the Daily Signal conservative website agreed, suggesting Carney picked a trade war with Trump “because of the timing.”  There are upcoming votes in Alberta and Quebec where they are “talking about more autonomy. In the case of Quebec, independence.”

Also, the U.S midterm elections are in November, and the Democrats “are unapologetic anti-American and pro-Canadian.” There are key Senate races in Maine and Michigan, right on the border, along with Wisconsin. And so, Hanson speculated, “what Carney was trying to do was to get people in the United States sympathetic to Canada.”

Canada’s economy remains divided by interprovincial trade barriers and conflicts between provinces. Notice that the premiers of Ontario, Quebec and British Columbia, whose provinces are being hit the hardest by Trump tariffs, are all convinced that the thing to do is to slap giant countervailing tariffs and export taxes on the exports of Saskatchewan and Alberta, but not their own products. The fact that doing so promises to ruin those industries for generations afterwards is of little concern.

Canada doesn’t take comparative advantage of critical minerals and oil and gas but instead, those industries are strangled with endless taxation and regulation. The Liberals have spent the past decade trying to destroy the Alberta-based energy industry. Providing the means to extract and ship oil to market is nearly impossible.

“Countries rarely collapse because they lack potential,” writes David Suchanek, who teaches economics and international business at Appleby College in Oakville, Ontario. “They decay because potential becomes an excuse for tolerating mediocre institutions. Weak productivity growth, chronic permitting delays, fragmented regulation and interprovincial trade barriers routinely turn comparative advantage into comparative frustration.”

Stephen Nagy, in an article in the Aug. 28 National Post, “Canada Must Stop Being the ‘Ugly Ally,’” reminds us how in the Trudeau decade Canada’s relationship with its most vital security and trading partner was disastrously mishandled.

“We saw Trudeau explicitly campaign against ‘MAGA conservatism,’ while then Foreign Affairs Minister Mélanie Joly publicly mused about creating a game plan to deal with a hypothetical authoritarian shift in the US.” Following Trump’s 2024 electoral victory, Trudeau called Kamala Harris’s electoral defeat “a setback for women’s progress,” and suggested women’s rights were under attack by “regressive” and “reactionary” political forces.

The heavy-handed way the truckers were treated during their occupation of Ottawa during the COVID pandemic, including the freezing of bank accounts, also did not go unnoticed.

In Carney’s attempts at economic diversification, he is making deals with the likes of China, Qatar, Saudi Arabia, and the United Arab Emirates. All these countries are, of course, far from making even a pretence of democratic governance, but in the case of China, that nation is a world power and the most important economic and geopolitical rival to the United States.

Prime Minister Mark Carney has named Dominic Barton, Canada’s former ambassador to China, as the new board chair of a reconfigured Invest in Canada initiative, a move which will please Beijing. During his years in the executive suite of Brookfield Asset Management from 2020 to 2025, Carney went out of his way to praise Chinese President Xi Jinping.

But anyone who thinks Washington, be it under Trump or a future Democratic administration, would allow a truly close Canadian “strategic partnership” with Beijing is dreaming. It would make a mockery of NORAD and turn the 49^th parallel inro an American border with a country that had come under Chinese economic – and perhaps political – sway.

As Conrad Black has written, in “Carney’s Big Chance,” National Post, Aug. 29, Trump considers that “we have been an incoherent nationality whose modus operandi has been a dishonourable freeloading on the Americans for national defence, and absolute commercial dependence upon the United States as if we were states of the American Union, while only masquerading as an independent country.”

Canada has been able to indulge in these activities precisely because it borders the United States – a country that, until Trump came along, paid it little attention.