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editorial

Donald Trump has once again set the world on edge, this time with his threat to impose global tariffs on steel and aluminum imports. The United States President has also rattled his allies and trading partners by seeming to welcome the prospect of any economic hostilities that come as a result of his actions.

“Trade wars are good, and easy to win,” he tweeted last week.

That’s nuts. Trade wars are incredibly bad and there are no winners. But if Mr. Trump wants a trade war and is willing to fire the first shots, the question for his trading partners is, Do they fire back?

It’s tempting. Why not give him the war he wants and let him learn the lessons it would bring. Canada has a particular interest in playing tough. The U.S. is the biggest buyer of our steel products. This county will suffer if the President’s proposed 25-per-cent tariff on steel is applied here.

But we also happen to be the world’s biggest buyer of U.S. steel. Overall, the U.S. sells 50 per cent of its exported steel to Canada and has a $2-billion trade surplus with us, according to Global Affairs Canada. A retaliatory measure, which Ottawa has already threatened to impose, would hurt American manufacturers badly.

But where would that lead? Mr. Trump has already vowed to retaliate against any retaliation, and he is irresponsible enough to do it. On Saturday, he warned the European Union that, if it imposed counter-measures, the U.S. would “apply a Tax on their Cars.”

And down we go into the trenches of an endless and chaotic tit-for-tat war.

As frustrating as it might be in the face of Mr. Trump’s bluster and provocations, it is far better for Canada to wait and respond rationally, without descending into a trade war against a far bigger adversary.

Ottawa is already on that wiser course. Government officials have been on the phone and in meetings to push hard for exemptions to the tariffs. That could well work, for the very good reason that Mr. Trump cannot make a strong case for his measures.

The President intends to unilaterally impose the tariffs on the grounds that protecting the steel industry is an issue of national security, allowing him to do an end run around Congress. “If you don’t have steel, you don’t have a country,” Mr. Trump tweeted last week.

Few are buying that argument. Steel prices have long been depressed by a huge surplus capacity on the international market. Every country is struggling with this issue, but none has seen the need to impose what are known as “safeguard” tariffs to protect national security.

Mr. Trump remains defiant on Twitter, but it’s not like he has thought this through. The message coming from the White House seemed to change hour to hour on Monday: no exemptions; maybe a few exemptions. That indecision will only increase, thanks to fierce opposition to the tariffs from senior Republicans and others who fear that a jump in the price of steel will result in the loss of hundreds of thousands of jobs in America’s manufacturing sector.

So there is reason to hope that the U.S. political process will water down Mr. Trump’s tariffs. But if that doesn’t work, Canada and other countries can still take their case to the World Trade Organization, which is where Mr. Trump will have to go to impose his tariffs legally.

That takes time, but there is reason to believe that Mr. Trump’s case will fall apart under scrutiny, and that his tariffs don’t meet the specific standards that allow a President to act unilaterally.

For instance, his assertion that the tariffs are needed as an emergency measure has already been contradicted by his statement that he won’t apply them to Canada and Mexico if they sign a new free-trade deal that is to his tastes. Is there an emergency, or isn’t there?

With so much opposition to the tariffs in the U.S. and internationally, and with so little forethought to buttress them, Canada should avoid firing a retaliatory shot and getting drawn into Mr. Trump’s mindless trade war.

We are better off relying on mechanisms like the WTO that were invented to prevent bigger countries from riding herd over their smaller trading partners. Just like an eye for an eye leaves the whole world blind, a tariff for a tariff leaves the whole world poorer.

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