Canada gets relief on tariffs – but Trump’s olive branch comes with thorns

The evening before U.S. President Donald Trump made his announcement on tariffs, Canadian ambassador David MacNaughton met at the White House with National Security Advisor H.R. McMaster.

The ambassador pressed him on a key point. Keep the Canadian exemption on the steel and aluminum imposts open-ended. There had been much talk of it being only 30 days.

Mr. MacNaughton left the meeting with no clear signal that his wish would be granted. But with Mr. Trump’s announcement on Thursday, it was there.

Now at least Ottawa isn’t up against a harsh deadline. Avoiding the tariffs, as Mr. Trump made clear, will still be dependent upon an agreement being reached on the North American free-trade agreement. So the President’s olive branch comes with thorns.

Ottawa is still being held hostage on the tariffs to whims of the wackadoodle President whose impetuous, rocky rollout of the trade policy stirred opposition around the globe.

But while acknowledging they are by no means out of the woods, Canadian officials feel Mr. Trump got some education on bilateral trade over the last week. “The reason he didn’t hit us with tariffs,” one said, “is that he now thinks it’s not in the U.S. interest.”

Mr. Trump expressed confidence that a NAFTA agreement would be reached in the coming months. He also uttered much exaggerated nonsense, saying the “decimation” of the steel industry at the hands of foreigners constituted a “national security disaster.”

He had been insistent that there would be no exemptions for his new tariffs. But he has shown himself capable of several flip-flops, somersaults and hairpin turns on a short-term basis. On Canada and Mexico he changed direction after a thunderous chorus of condemnation against his trade-war push. Pressure came from his Secretaries of Defense and of State, from a letter signed by no less than 107 Republicans, from the U.S. Chamber of Commerce, from north of his border, south of his border and Europe.

His decision puts even more pressure on Ottawa to compromise on a new NAFTA deal. But Canadian officials insist they are not about to turn around and go the appeasement route by making big compromises. If the Americans think the tariff threat is going to work as some kind of Sword of Damocles, they’re wrong, they say. They were prepared and are prepared to retaliate on steel and aluminum duties with the imposition of big import levies from states where the President has high political stakes.

On trade questions, complicating matters is a shakeup at the White House that would appear to make conciliatory moves down the line from Mr. Trump less likely. Chief economic adviser Gary Cohn, a globalist who fought hard against the nativist leanings of the President and others in the inner sanctum, is leaving. In the ascendancy is Peter Navarro, the biggest wall-builder on the Trump team. He is on the short list to replace Mr. Cohn.

Complicating matters further is that the dysfunction at this White House appears to have reached unprecedented levels. The word chaos, as someone said, does not do the place justice. Mr. Cohn is leaving, top aides Rob Porter and Hope Hicks are gone. Mr. Trump has sent signals that he is losing confidence in chief of staff John Kelly. He has termed the performance of his Attorney-General, Jeff Sessions, “disgraceful.” Senior adviser Jared Kushner, the President’s son-in-law, is up to his eyeballs in controversy. The Stormy Daniels porn-star scandal has broken out into the open. The Mueller inquiry is turning up potentially damning new evidence.

In his dealings with Canada Mr. Trump has held to his reputation as the zigzagger-in-chief. He has treated the northern neighbour and ally not with conscientiousness but rather capriciousness.

That erratic approach is likely to continue. The Canadian side can feel a bit better with his announcement Thursday. But bilateral relations remain in a state of perilous ambiguity.