Donald Trump has announced tariffs which he expects will be paid by Canada and Mexico. In reality what he has announced is a major increase in prices that American businesses and consumers will be paying for gasoline, autos, food and much else. Before anyone including federal and provincial governments and the business community starts to panic as they appear to be doing, we should understand nothing material will happen before January 20 at the earliest when Mr. Trump takes office. This is a time for Canadians to take a breath and watch as Americans themselves start to realize the serious adverse consequences domestically of what the President-elect plans to do. In light of this, it is Americans not Canadians or Mexicans who are best positioned to pressure the incoming Trump administration to back down in its own interest.
During the worst days of the Blitz in World War Two, the British were advised not to panic but to “keep calm and carry on.” It was excellent advice then and is exactly how the Government of Canada should react to whatever Donald Trump throws at us now. The same advice applies to the often-nervous Canadian business community. It is important all remember that although policy pronouncements from the incoming Trump administration may come at us quickly and aggressively, Canadian officials have been discussing the prospect of a Trump election win for many months and discussions on how best to navigate it are well-progressed.
This is not the time for making concessions damaging to Canada in the hope they will appease an unpredictable American President from doing more. It is whistling past the graveyard to try to appease Donald Trump, as the Prime Minister will inevitably discover despite his recent visit to Mar-a-Lago ostensibly to "make nice" to the incoming President. Standing up to a bully for what is in Canada’s best interest will pay far greater dividends than caving. And this is also definitely not the time for the Government of Canada to fall into the trap of effectively outsourcing our trade and foreign policy to Washington as some might like us to do with respect to China, or defence, or digital services, or supply management, or anything else. All we would get in return would be a recognition that Canada can be pushed around by a bully.
Provincial premiers should remember that international trade is an exclusive federal jurisdiction and should hesitate from muddying the waters with respect to dealing with Trump’s threats. It will be best for all if political leaders in Canada work as one cohesive and coordinated unit in navigating the days ahead.
It is also a mistake for our government and Canada’s business community alike to try to distance themselves from Mexico. On the contrary, there is strength in numbers. While having an open dialogue with the incoming U.S. President is of course important, the Prime Minister should be working closely with his Mexican counterpart on how best to demonstrate to the United States the impact to Americans themselves of the future tariffs envisioned on the price and supply of Canadian and Mexican exports. While the Prime Minister flew down last week for a quick stop at Mar-a-Lago, he would be well advised to fly to Mexico City for serious working sessions with his Mexican counterpart on how best to deal with the implications of the threats posed to our economies by the incoming American administration. These two leaders and their Ministers should also make clear to the incoming U.S. administration what the impact on Americans might be of Canadian and Mexican retaliatory measures.
In her new memoir, Angela Merkel says the big mistake she made in dealing with Donald Trump was to presume he was a “normal person.” He is certainly not anyone’s definition of a traditional government leader, doesn’t pretend to be nor is that why he was elected. Therefore, the Trudeau government must not attempt to deal with him as we would a typical foreign administration. The tariff announcement regarding Canada and Mexico is just an opening salvo for Trump. The next tariff shoe to drop inevitably will be with respect to Europe and Asia. Therefore, the best policy for Canada today is to work closely with Mexico and our European and Asian counterparts to have a common, measured approach to engaging with the Trump administration.
In the meantime, it would be a good thing for us all to take a breath, keep calm and just carry on.
Eddie Goldenberg is Senior Advisor at Global Public Affairs and previously served as Chief of Staff to Prime Minister Jean Chrétien.