Christia Freeland, the potential prime minister of Canada, called President Trump's 25% tariffs on Canadian aluminum “economic self-harm.” She delivered anti-American rants in the New York Times.
Freeland relied on Ottawa's oldest tactics. It convinced Americans that their financial well-being depends on Canada's happiness. The reality is that Canadian diplomats have long undermined our economic interests.
Ottawa's response to US steel and aluminum tariffs revealed Canada's vulnerability.
The aluminum and steel industries are struggling, but energy imports provide an example of Starker. Canada has been actively working to make the US more dependent on fossil fuels, freezing its rival suppliers that increase the costs of American consumers and industry.
Ottawa likes to talk about progressive foreign policy decisions. But, like all countries, its main motivation is cold and difficult economic concerns.
This is less obvious than Canada's Latin American policy, with strict approval as a top priority for oil-rich Venezuela.
Ottawa began calling for sanctions on Venezuela's oil, gas and mining sector well before Trump's first election in 2015. Canadian officials framed the policy as a social justice effort, but ultimately filled the profits of Canadian oil companies.
During Trump's first term, US imports of Canadian crude and petroleum products skyrocketed by around 40%. The “Maximum Pressure” campaign against Venezuela may have been signed off by Washington, but it was created in Canada.
At the same time, US imports of Venezuela's crude oil fell sharply. By the second half of 2019, they had almost disappeared. This supply cutoff has squeezed Gulf refiners, raised gas prices and made the US more dependent on expensive Canadian oil.
However, the tide is against Canada. Ottawa has struggled to use Venezuela as leverage for American officials as Trump pursues close ties with the Maduro administration as part of his administration's efforts to combat illegal immigration.
The shift came into effect earlier this month when Caracas agreed to release six American detainees and reclaim some Venezuelan citizens who were detained in the United States.
These developments overcame Canadian Foreign Minister Melanie Jolly, who the Trump administration argued that he had no interest in cooperation with Venezuela. Joly warned that a decline in Canada's oil exports could force the US to rely on Venezuelan crude oil.
The reality is the opposite. Jolie's false statement only confirmed her self-interest.
In fact, the US can import Venezuela's proven reserves further, the largest on the planet, bringing massive savings to consumers and industries.
Much more enthusiastic than tariffs, this is Canada's worst case scenario.
Trump recognizes the energy potential of Venezuela and understands that border security requires cooperation with the Maduro administration. With around 600,000 Venezuelans currently in the United States, Maduro needs incentives to promote return.
A reorganization of the Western Hemisphere is underway. Trump's historical relationship with Canada and Mexico makes little sense if they don't match his “America's first” agenda.
North American oil markets have already adapted to the new administration. For the imports needed, the White House favors the cheapest options shipped from Venezuela, rather than plumbing from Canada.
Ottawa's response to US steel and aluminum tariffs revealed Canada's vulnerability.
In her New York Times work, Freeland urged “all countries of the world” to counter US measures, even proposing a 100% tariff on Tesla cars. But they call for Canada's international solidarity to ring out after years of economic growth at the US expense.
The model flourished under the weak White House. Now that Trump has called Canada, his leadership must face the harsh reality of a new global order.
