Canadians need to support each other against Trump’s tariff tirade

Earlier this year it was revealed that Amazon committed a whopping US$40 million to license an upcoming documentary about Melania Trump. It is safe to say that the price will not be justified by the number of viewers the film will attract.

Enriching the Trump family was clearly in anticipation of future considerations. Amazon is among many big tech companies spending money to endear themselves to the president. Republican members of Congress are too intimidated to complain about the unscrupulous uses of Trump’s authority for personal gain.

The payoff comes in part from Canada. Its digital services tax (DST) was set to affect companies that offer digital services. Amazon, Apple, Airbnb, Google, Meta and Uber would be taxed three per cent on the money they make from Canadian users and customers. Since it was retroactive to 2022, U.S. companies were looking at a $2-billion US tax bill.

Trump’s favourite tool is tariffs, with which he has been grinding countries around the globe to extract concessions. In Canada’s case it was a demand that the government cancel the DST. Carney agreed without getting anything in return.

Canada is not alone. France, Italy, Spain, Turkey, New Zealand and the UK have been singled out for pressure on the same issue.

The Canada United States Mexico agreement is scheduled to last until 2036. The trade of goods under that agreement is not affected by the new tolls.

At time of writing, exports of aluminum and steel are now seeing 50% tariffs; copper is set to be next. Next up will be the supply management systems that protect dairy and chicken farmers.

Meanwhile, Trump has been repeating the bogus claim that Canada is a major source of fentanyl imports to the United States. It now is threatening 35% tariffs, which would only apply to those goods traded outside the United States-Mexico-Canada Agreement. Exports of potash and carbon fuels may be 10%.

The other false claim is that Canada is being “subsidized” by the United States because we sell more to them than they sell to us. If that was the case Saudi Arabia would be the biggest offender by far, but there is no indication that they will be suffering much. This is not bargaining, it is bullying. There are no quid pro quos. Truth about what actually happens with fentanyl at the borders today is ignored.

At a minimum, there will be more ratcheting up of tariffs for all countries during the rest of July.

Other countries are receiving abuse. Trump is threatening tariffs on Brazil at a rate as high as 50%. He accuses the country of “attacks” on US tech companies and of conducting a “witch hunt” against the far-right former President Jair Bolsonaro, a longstanding ally who is facing prosecution over his alleged role in a plot to overturn the 2022 Brazilian election. The extraordinary meddling in another country’s judicial system is disgraceful.

Meanwhile, Trump has been ineffective in preventing Israeli Prime Minister Netanyahu from pursuing ethnic cleansing of 2.2 million Palestinians from the Gaza strip. Nor has he been effective in deterring Russian aggression in Ukraine, either by pressure or by providing adequate supplies of weapons to Ukraine’s soldiers.

Since its founding, the United States has had many periods of elevated tariffs motivated alternatively by the intention to protect American producers and/or by the amount of money collected for the federal treasury. But after Word War II, it championed a global opening up of trade. This involved establishing international institutions like the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade (GATT), which later became the World Trade Organization.

The current tirade is a renouncing that good work. But the offensive may cause the opening of new possibilities. Economies such as Vietnam and Indonesia, India and Australia, Brazil and Nigeria might pair up to form profitable new relationships.

Cooperation within Canada is improving. With leadership from Nova Scotia Premier Tim Houston, echoed by Ontario Premier Doug Ford, obstacles to the free movements of goods and workers between provinces are being reduced.

Ford and Alberta Premier Danielle Smith have agreed to promote a new pipeline for oil to be shipped eastward, benefitting Alberta oil producers and Ontario steel workers.

Canada needs to reach out to both European and Asian economies. Where economical, Canada should give them preference in oil, gas, and potash sales.

A review in 2026 is supposed to be about considering an extension for 16 more years. But Trump may use the review as an excuse to increase the economic warfare, further adding to Canada’s tariff burden, all in pursuit of the 51st state threat.

Canada must succeed in its efforts to reduce barriers to interprovincial trade. It must also create new relationships in Europe and Asia to absorb goods and services blocked by American Tariffs.

Canada will have succeeded in this round of negotiations if it can minimize the impact on jobs. But Trump is not interested in win-win outcomes.

Some industries may be hit hard regardless of those efforts—for example, steel and aluminum plants, and some of the auto workers. Those of us not so affected must provide strong supports to the affected workers and their families.