Commentary: What are friends for? They are there to share in your life, celebrate with you when you are at your utmost highs, they are there to comfort you when you are down, and they have your back. They know your family and you know theirs. Solid friendship takes years to formulate, and great friends forgive you when you have done something wrong to them, if you are truly sorry. But, sometimes they do not. Will this be the case with Canada?
After a tumultuous Group of Seven meeting (Canada, France, Germany, Italy, Japan, and the U.S. – representing more than 60 percent of the world’s total economic output - in Quebec, Canada on June 9 and 10, the partners issued a joint communiqué on the meeting results. At a post-summit news conference, Canadian Prime Minister Justin Trudeau, referring to the U.S. imposition of tariffs on Canadian steel/aluminum exports to the U.S, stated, “Canadians are polite and reasonable, but we will also not be pushed around. It would be with regret, but it would be with absolute clarity and firmness that we move forward with retaliatory measures on 1 July, applying equivalent tariffs to the ones that the Americans have unjustly applied to us,”
Relations were already deteriorating. On a May 25 phone call between the two leaders, Trudeau asked how Trump could justify slapping tariffs on Canada based on a national security issue - the U.S. Trade Expansion Act allows a U.S. president to impose unlimited tariffs if imports threaten national security. The U.S. invoked this clause to impose steel/aluminum tariffs on countries such as Canada in March. Trump’s response was, "Didn't you guys burn down the White House?" referencing the War of 1812.between the U.S. and the U.K, in which British troops burned down the White House after U.S. troops invaded Canada.
In his news conference, Trudeau pointed out that Canadians had served alongside the U.S. in wars going back to WWI, and that the U.S. tariffs on Canada, based on national security concerns, were “kind of insulting.” Trump responded in a series of tweets, “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the US Market! PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that… he ‘will not be pushed around.’ Very dishonest & weak. That’s going to cost a lot of money for the people of Canada. He learned?”
Trump’s trade advisor Peter Navarro echoing the president’s vitriol, stated, “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door.” He also stated that Trump, “did the courtesy to Justin Trudeau to travel up to Quebec for that summit. He had other things, bigger things, on his plate in Singapore,” referring to Trump’s meeting with North Korean leader Kim Jon Un. “Courtesy” is a bizarre way to describe the U.S. attending a meeting of a group that it helped found, and has historically used to conduct political and economic talks at the highest level with allies.
In reality, how much of a threat is Canada to the U.S. from a trade standpoint? The
U.S. has 9.25 times the population of Canada. According to International Monetary Fund statistics, the U.S. has the world’s largest economy with a GDP of $20.4 trillion in 2018, compared to Canada, which ranks tenth with a GDP of $1.8 trillion (roughly 9 percent the size of the U.S. economy). The U.S. and Canada are the world’s largest trading partners, and the main goods they trade are machinery, equipment, vehicles, oil/natural gas, aviation equipment, wood, electricity, chemicals, and consumer goods. According to the Census Bureau, in 2017 the U.S. exported $282.2 billion to Canada and imported $299.3 billion, indicating trade between the two is fast approaching $2 billion of trade per day. In 2017, the U.S. trade deficit with Canada was $17 billion. To an individual, this is a large figure, but between two huge trading partners, it is a small number.
Due to Trump’s anti-Canada rhetoric, U.S.-Canadian relations arguably have not been this bad since the War of 1812. I can understand a president lambasting traditional adversaries such as Russia, China, and North Korea, countries for which surprisingly he seems to have a fondness. But Canada, our closest ally in the world? I also would not imagine a U.S. president using a 200-year-od war as ammunition in an argument over the brewing present-day trade war, which the U.S. started.
So what is going on? Does Trump really consider Canada a threat, albeit based on trade, to our national security, for which he uses such heavy-handed, and insulting tactics to address? Statistics and actions show that this is not the case. After the meeting with Kim Jon Un, Trump hinted that he reacted so strongly to Trudeau to show the Korean leader that he was tough and a force to be reckoned with. If this is true, then Canada was used as a shill to further Trump’s agenda and to boost his ego – maybe this was the true nexus for Trump’s harsh insult of Canada’s leader. Should old friends be thrown under the bus like this whenever it suits our purposes? Well, what are friends for?
Jerry Pacheco is Executive Director of the International Business Accelerator, a non-profit trade counseling program of the New Mexico Small Business Development Centers Network, and the President/CEO of the Border Industrial Association. He can be reached at 575-589-2200 or jerry@nmiba.com