The careening juggernaut that is this increasingly interdependent world’s economy is already subject to enough unpredictable forces as it is: wild weather and war among them.
When reckless politics born of mere personal spite is thrown into the mix, heedless of how it will affect commerce and consumers, that’s an unforced error, with real consequences for real people.
Another such error on the international economic stage is just what President Trump’s recent slapping of an additional 10% tariff on all Canadian goods is.
He ordered the disruptive hike in prices for the entirely capricious reason that he didn’t personally like a television ad produced by the province of Ontario.
When a president of the United States’ fiscal instincts are based on whim, whatever the content of such an ad might be almost doesn’t matter. But that it happened to be based on a radio talk President Ronald Reagan gave in 1987 correctly warning about how international tariffs always hurt consumers — well, the ironies abound.
Deep in his folksy mode, a video showing him sporting a ranch-casual plaid shirt, Reagan says: “You see, at first, when someone says, ‘Let’s impose tariffs on foreign imports,’ it looks like they’re doing the patriotic thing by protecting American products and jobs. And sometimes for a short while it works — but only for a short time. … High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars.”
Another irony, certainly not dealt with in the ad — widely seen, since it aired during the telecast of the first World Series game in Toronto — is that at the beginning of his speech 38 years ago, Reagan was actually announcing a specific “duty” — a new fee — on what he had to explain at the time were “electronic devices called semiconductors” imported from Japan, because they were being dumped at artificially low prices, contrary to a formal treaty signed by our two nations.
A pinpointed penalty in response to a specific violation of a trade agreement is sometimes appropriate.
But a 10% new tax for American consumers on all Canadian goods, in addition to the tariffs already levied, because an American president doesn’t like being unfavorably compared to another American president?
That’s an irresponsible snit fit.
Because he can’t respond with actual monetary-policy logic, Trump brands the ad a “FRAUD” because the audio from Reagan has been edited for its best bits, which are boiler-plate facts from Economics 101 about the salutary effects of free trade on the nations of the world.
Because it is selections from a speech, rather than its full five minutes, does not a fraudulent TV commercial make. But for a president for whom all politics is about himself, merely personal, it was cause to not only create a new 10% trade barrier — it was cause to entirely suspend ongoing trade talks with Canada in the bargain.
Canada for its part is being, well, Canadian on what is certainly a sensitive issue. Rather than doubling down, Doug Ford, the Ontario premier, announced the ad would stop running. Prime Minister Mark Carney subtly reminded Ford that trade policy is a national, not a provincial, issue.
Talks by negotiators nixed or not, Trump and Carney are both in Asia this week meeting with other world leaders, and perhaps have had the chance to talk turkey themselves. Ultimately, it’s American consumers and companies that rely on Canadian lumber, aluminum and steel who should let the president know they don’t like paying the price for his fit of pique.
