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Politics Cheese, wood and NAFTA: Canada gets a lesson in Trump opportunism

U.S. President Donald Trump walks through the White House on Friday, at the end of a week in which he threated to withdraw from NAFTA.

KEVIN LAMARQUE/REUTERS

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The dairy spat with Canada didn't seem to be on the Trump administration radar. Commerce Secretary Wilbur Ross told a TV interviewer that he was in Japan when President Donald Trump went to Wisconsin, where he met women who were about to lose their dairy farms because Canada undercut U.S milk products. "It was a very emotional scene for him," Mr. Ross said.

Mr. Trump added the dispute to his speech at a Snap-on tool plant in Kenosha: Canada is being "very, very unfair" to American farmers, he asserted. The following Monday, just over an hour after Mr. Trump's favourite cable news network, Fox News, ran a piece on the plight of a Wisconsin farmer, Mr. Ross was on the phone to Canadian Ambassador David MacNaughton. The next morning, Mr. Trump tweeted: "We will not stand for this."

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This was the President who welcomed Prime Minister Justin Trudeau to the White House in February with a suggestion that Canada's a good guy on trade, and that in its case, the North American free-trade agreement only needs tweaking.

Opinion: A reality check on NAFTA for Donald Trump

But Canada was getting a lesson in Mr. Trump's opportunism. And it wasn't done yet.

Eight days after the President's visit to Wisconsin, aides to Mr. Trudeau were in a parking lot at Tunney's Pasture, a sterile government campus west of Ottawa's downtown, hastily arranging a call between the Prime Minister and the President. Mr. Trudeau's team had courted ties to Mr. Trump's inner circle, and they were warned Mr. Trump was getting worked up to sign an order withdrawing from NAFTA. When he got on the phone with Mr. Trudeau, the President told the Prime Minister he was planning to do it. In theory, that would trigger a six-month period for the trade deal to be renegotiated, or die.

Posturing? A shakedown to soften Canada and Mexico for concessions? That's a side effect. There was another motivation: U.S. politics.

A frustrated President, blocked on Obamacare, forced to retreat on funding a border wall, backing down on labelling China a currency manipulator, was feeling stalled by Congress on renegotiating NAFTA. He was searching for a thunderbolt to mark the most-hyped milestone of the presidency, the 100 Days. Advisers such as chief strategist Steve Bannon and trade adviser Peter Navarro, the anti-trade-deal faction, were reportedly pushing him to trigger withdrawal in a big announcement for the 100th day, Saturday.

But Mr. Trump's advisers are divided. The Washington Post, after an interview Thursday with the President, reported that Mr. Ross and Agriculture Secretary Sonny Perdue scrambled to the White House to explain to the President there would be consequences – with Mr. Perdue using a map indicating which areas would be most affected by an agriculture trade war, and noting they overlap with Mr. Trump's voters.

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Mr. Trump later said he changed his mind on terminating NAFTA after speaking to Mr. Trudeau and Mexican President Enrique Pena Nieto, but the Post cited a source who said the President reversed course before those calls.

That wasn't the impression in the PMO. Mr. Trudeau said Thursday that Mr. Trump told him he was "very much" considering cancelling the trade deal, and he responded that even if he eventually wanted change, triggering abrogation suddenly would disrupt business and hurt families. Whether Mr. Trudeau changed the President's mind or not – Mexico reportedly threatened to pull out of NAFTA talks if the U.S. triggered abrogation – Mr. Trump apparently hadn't even considered the impact on Canada. The day before, in a call between the two leaders about softwood lumber, Mr. Trump had been surprised to hear U.S. tariffs would cause substantial job losses in Canada. The impact on Canada, it seemed, hadn't been on the President's radar.

At the end of the day, Mr. Trump retained the right to use the "nuclear" option if he doesn't like the NAFTA renegotiation. His chief of staff, Reince Priebus, insisted he now has more leverage. But that doesn't mean this was a carefully crafted strategy.

In his ghost-written 1987 autobiography, The Art of the Deal, Mr. Trump enunciates negotiating principles such as aiming high and then settling for what he wants, and building up leverage to push the other guy into a deal.

But another theme runs through the text: He isn't a structured planner, he jumps at opportunity, and changes tack for advantage. "You can't be imaginative or entrepreneurial if you've got too much structure," Mr. Trump says on the first page. "I prefer to come to work each day and see what develops."

Yes, the Trump administration wants leverage in trade talks. But that's not the mover in the recent Canada-U.S. psychodrama. Three separate things met Mr. Trump's opportunism.

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The dairy dispute caught Mr. Trump's eye. Long-ailing Wisconsin farmers had found a way into a corner of Canada's protected dairy market, until Canadian dairy boards undercut their prices. Mr. Trump understood it as Canadian cheats pushing U.S. farms out of business, and jumped. It was good politics, too: he was portrayed as standing up for embattled farmers.

The second item, softwood lumber tariffs, was virtually automatic. The last Canada-U.S. softwood deal lapsed in 2015, and after a one-year moratorium, the U.S. lumber industry made a claim for tariffs, announced, as long scheduled, last week. Barack Obama hadn't made a new deal, and Mr. Trump inherited the dispute with the clock ticking. And Mr. Ross, the Commerce Secretary, personally took part in last-minute talks, speaking to Foreign Affairs Minister Chrystia Freeland both Sunday and Monday.

"He was thoroughly engaged, he was well-prepared, and he's a tough negotiator but I honestly believe he was trying to get a deal," said Mr. MacNaughton.

Natural Resources Minister Jim Carr, called the case for tariffs baseless, but noted that they're driven by the U.S. lumber industry, and the administration needs to win half of the industry over to any deal. (Canada is hoping the more "diffuse" interests of home builders and buyers will apply counterpressure over time, he said in an interview.) Canada hints it will litigate, as it has several times in the past, before compromise deals were struck.

The difference this time is that the softwood issue was swept into the rhetoric. Mr. Ross called the dispute a sign of NAFTA's flaws. He had been leaning on Congress to renegotiate NAFTA, and this was a nudge. Mr. Trudeau's government stuck to its script. It objected to tariffs, but ignored the rhetoric. "We're very careful not to respond to statements," Mr. Carr said. "We respond to actions."

But the third thing, Mr. Trump's plan to trigger withdrawal from NAFTA, did cause a shiver. After the leaders spoke, Mr. Trudeau's two top aides, Katie Telford and Gerald Butts, went to Washington the next day to meet senior officials. The episode had been a near miss.

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And it can all still put a squeeze on Canada. Derek Burney, a former ambassador to the U.S. and chief of staff to Brian Mulroney, said Canadians have to see Mr. Trump as tailoring comments to his audience – such as Wisconsin dairy farmers – but he still sees the bombast as "a bit of a shakedown."

"The worry I have is that this very much destabilizes business confidence and investment," he said. The Canadian government can't tangle with Mr. Trump the tweeter, but Canadian and U.S. business leaders have to start decrying the impact of the "unhinged rhetoric," he said.

But pulling out of NAFTA? It's not even clear the President has that power, or if Congress would let him, Mr. Burney said. He'd face pushback. The rhetoric, however, "is a bit much."

At least, Mr. Burney said, Mr. Trump and Mr. Trudeau are talking. "As long as the channels of communication are open at the top, we've got a reasonable shot at keeping this on the road," he said.

But that's harder with Mr. Trump the opportunist. He was aiming for a big showpiece announcement at home, rather than a collision with Canada. But this is a president who swerves.

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