Canada ‘knuckles under’ on trade

Dan McLaughlin writes for National Review Online about Canada’s response to President Donald Trump’s trade threats.

Sad trombone:

Canada will remove many retaliatory import tariffs on U.S. goods and intensify talks with the United States on striking a new trade and security relationship, Prime Minister Mark Carney said on Friday. Canadian tariffs on U.S. autos, steel and aluminum will remain for now, he told a press conference. Carney noted that the United States had recently made clear that it would not impose tariffs on Canadian goods that were compliant with the three-nation U.S.-Mexico-Canada free trade agreement, something he called a positive development. “In this context and consistent with Canada’s commitment to USMCA, I am announcing today that the Canadian government will now match the United States by removing all of Canada’s tariffs on U.S. goods specifically covered under USMCA,” he said. “Canada and the U.S. have now re-established free trade for the vast majority of our goods,” he added, reiterating that compared with its trading partners, Canadian exports were still subject overall to a low level of U.S. tariffs.

As Carney’s statement indicates, this is not being done entirely unilaterally in the absence of some American softening of position. But it’s still not a negotiated deal; he’s backing down in search of an exit strategy. One of several of my objections to Donald Trump’s global war on trade was the risk that he was overstretching his leverage by trying to fight everyone at once. Trump has proven more flexible than some of his ideologically anti-trade supporters, and some of the deals he’s struck have not been that dramatic, but at least in dealing with the European Union and Canada, he’s proven that American economic leverage is indeed a powerful weapon against governments (or whatever the EU is) that are not well-constituted to hold out in a game of chicken.

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