President Theodore Roosevelt famously said, “Speak gently and carry a big stick.” Ontario Prime Minister Doug Ford ignored this wisdom and threatened a 25% tariff on electricity exports to the United States.
President Trump
Responded in response to the threat His own tariffs on Canadian steel and aluminum.
Based on Ontario, Canada, I put a 25% tariff on “electricity” coming to the US, and I have instructed the Secretary of Commerce to add 50% to all steel and aluminum coming to the US from Canada, one of the best rate countries in the world. This will come into effect tomorrow morning on March 12th… If other terrible, long-term tariffs do not fall by Canada as well, then tariffs on cars coming to the US on April 2nd will increase significantly. These cars are easy to make in the US!
Ford not only speaks loudly, but also has a very small stick. The reality is that Canada is profiting very much from trade with the US and accordingly has no leverage in the trade war. President Trump should use this fact to readjust trade with Canada to serve America's greatest interests.
I know when to fold
President Trump imposed a 25% tariff on Canadian steel and aluminum exports this week. These are not neglecting threats. It is an existential threat to Canadian industry. This is because Canada's steel and aluminum industries exist to serve only the American market.
Consider that Canada exports 10 million tonnes of steel to the US. This represents 82% of all Canadian steel. Canada's aluminum industry is further dependent on the US. Approximately 90% of Canada's aluminum is shipped to the US. Without access to the American consumer market, Canada's steel and aluminum industries would die.
Canadian politicians need to be painfully aware of these obvious facts, but obviously they are interested in earning cheaper political points than serving people. We can relate, but the decades of US presidents from Bill Clinton to Joe Biden have sold out Americans as well – this doesn't mean Trump should take a break from Canada.
For decades, Canada has benefited from the United States by engaging in predatory and parasitic trade policies. Sometimes they engage in free trade and raise large amounts of tariffs on American products. This policy depends on the ones with the most profitable in Canada.
For example, the North American Free Trade Agreement and its successor, the US Mexico and Canada Agreement, provide “free trade” for many products, particularly industrial and manufactured goods. These contracts benefited Canada at US costs. why? Market asymmetry.
The cost of doing business in Canada is lower than in the US. This is because the Canadian dollar is chronically weaker than the greenback. This means that American companies can get more “for their backs” by building and operating factories in Windsor than in Detroit. Therefore, “free trade” with Canada led to offshoring of many American factories.
Some of these have been estimated in the research
950,000 manufacturing industries I moved from the US to Mexico and Canada. In addition to this, At least 1 million other service jobs He died when the factory moved. This is because factories like farms and mines are anchor industries on which the predicate industry depends.
Worse, if “free trade” does not benefit Canada, the Canadian government will collect huge protective tariffs. As President Trump pointed out, these tariffs could be hundreds of percent, as with Canadian dairy products.
Trump is right: Canada can't have it both ways. Either the two countries should make mutually beneficial transactions or the US should take care of their own self-interest by imposing tariffs to protect the American industry.
Re-shore the American factory.
Lamenting for the nation
in “Lamenting for the nationCanada's biggest political philosopher, George Grant, has previously explained the change in Canada from a highly industrialized, culturally independent fortress of traditional British civilization in America to a “branch plant” of the American economy. The conversion is virtually complete.
The reality is that Canada's economy is directed towards service to America. Not only is 77% of Canadian exports aimed at the US, Canadian provinces actually trade freely with adjacent American states. It is the Canadian constitution and somewhat old-fashioned customary law. Ontario, for example, has a deeper economic ties between Michigan and Ohio than Quebec or Alberta.
So, where does this leave us? Assuming that President Trump simply won't annex the Canadian president, what does America's first trade policy look like in the future?
As explained in my bookReshore: How tariffs take our work back and revive our American dreams“New technologies will promote long-term economic growth. Therefore, our trade and industrial policies should be directed towards concentrating as many technologically advanced and capital-intensive industries as possible. Furthermore, we will control the entire supply chain, maximize reductions in value-added production, and The economic collapse of the O-ring style.
The best approach is to impose high tariffs on all imports except raw materials or luxury goods that the US cannot produce or obtain at a sudden discount without risking self-sufficiency. This strategy prioritizes domestic industries while ensuring access to cheap resources from countries like Canada.
For example, justin Trudeau refused to build a pipeline to the coast, causing Alberta oil to be traded at a sudden discount. We will purchase as many cheap oils as possible. But we can build our own car in Detroit, thank you very much.
Where will it leave Canada? That's the wrong question. American trade policy should put American interests first – not Canada, not Mexico, and certainly not China's. It relies on reusing the factory and reviving American dreams.
