So, It’s Blackmail, Then…

And so it begins…

Even before taking office Trump has started throwing his considerable weight around and is planning to impose a 25% tariff on *all* imports from Canada and Mexico, in response for our respective “failure” to control fentanyl smuggling.

But facts, never a Trump strong point, matter:

• The number of illegal border crossings from Canada to the US is likely equal to the number of crossings from the US to Canada

• Most fentanyl smuggling is conducted by US citizens and doesn’t involve Canada’s border with the United States

• Many economic sectors - like the auto sector - are completely intertwined. A tariff hits immediately at the production level in both Ontario and facilities across the US.

• US consumers could pay up to $2400 each in increased costs if tariffs are imposed. Prices will increase on food, gasoline, construction materials, and a host of other goods.

• The decline in the Canadian dollar resulting from the mere threat of US tariffs makes our goods *more* competitive in the US.

• Both Canada and Mexico have the ability to impose countervailing tariffs. If selectively targeted these can hit sectors of the US economy hard.

It’s difficult to determine what Trump’s end game is here; he’s simply created an issue as a means to threaten us. It’s blackmail, pure and simple. The fact that Trump has no clue how tariffs work only exacerbates this problem.

Unfortunately, the Canadian government’s reaction is exactly as one might expect. We’ve issued statements stressing the importance of our bilateral relationship, complete with the usual pablum of “working together” and, unbelievably, trying to find ways to “address Trump’s concerns”. Never mind that these “concerns” are basically a fiction invented by Fox News commentators.

The government will argue that the “convening” and “persuading” approach worked last time. But last time was different. Last time, Trump was new to government and was restrained by experts within his administration. This time, we cannot expect such restraint. His cabinet picks alone drive home the idea that personal loyalty, not ability, is the prime prerequisite for serving the nation. Project 25, to which Trump subscribes, despite his weak denials, is preparing for an ideological purge of the Federal government from the first day of Trump’s taking power.

We cannot assume that Trump and his minions are rational actors. Indeed, we’ve seen ample evidence that they are not. As with defence, Canada needs to be proactive, decisive, and publicly resolute in the face of American threats. We are not 1938 Czechoslovakia and we have a wide variety of options available to us as a powerful G7 nation. One might be to publicly call Trump out on his border accusations. Another might be to announce potential countervailing tariffs *in advance*. The key is to *do something*. Canada must act decisively by pre-emptively targeting vulnerable U.S. industries with tariffs and directly countering misinformation.