Trump's Trade Tantrum

 

I was going to write about something else today, but now that Trump has had his predictable tantrum over the above ad, perhaps this will serve as a wakeup call to Mark Carney and his government that any hope of securing a stable, long lasting trade agreement with the U.S. is but a sad delusion.

Trump had this to say:

U.S. President Donald Trump says he is terminating all trade negotiations with Canada over an advertisement by the Ontario government that uses the late U.S. president Ronald Reagan's own words to send an anti-tariff message to American audiences.

In a late-night post to his Truth Social platform, Trump attacked the ad, which he attributed to Canada rather than Ontario, as fraudulent and fake.

"TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A." Trump wrote. "Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED."

In a later post on Friday morning, Trump claimed “CANADA CHEATED AND GOT CAUGHT!!!"

"They fraudulently took a big buy ad saying that Ronald Reagan did not like Tariffs, when actually he LOVED TARIFFS FOR OUR COUNTRY, AND ITS NATIONAL SECURITY,” he wrote. “Canada has long cheated on Tariffs, charging our farmers as much as 400 [per cent]. Now they, and other countries, can’t take advantage of the U.S. any longer."

Clearly, the time is drawing very near when we have to assert both our trade independence and sovereignty, as the mad king will not stop until he has crushed both. Appeasement attempts have been an abject failure, and we need to assert the leverage we have: energy and rare earth minerals come readily to mind. 

The only bright spot that has emerged thus far, marking a departure from our usual supine reaction to the U.S., is the fact that there are going to be tangible penalties for both Stellantis and GM over their ceasing production at two plants in Ontario.

As CBC News first reported, the two multinational manufacturers will no longer be exempt from paying Canada’s retaliatory tariffs on as many U.S.-assembled vehicles as before.

The move is an attempt to put pressure on the companies to reinvest in Canadian production and workers to get this benefit back and avoid a big tariff bill.

"This action follows the automakers' unacceptable decision to scale back their manufacturing presences in Canada, directly breaching their commitments to the country and Canadian workers," the government said in a late-night media release.

And those penalties will be consequential.

 The ministers announced that effective immediately, the government is lowering the amount of American-assembled vehicles GM can import tariff-free by 24 per cent and cutting Stellantis's amount by 50 per cent.

"I think Canadians and the industry want the government to be tough on companies that don't own up to those partnerships that in many cases have been worth billions," said Flavio Volpe, president of the Automotive Parts Manufacturers' Association.

"This is a great move."

While these tariffs will raise the Canadian price of GM and Stellantis vehicles, the obvious answer, and likely intent of the penalties, is for consumers to avoid buying their products. Since Canada represents a very important market for American cars, this move will hurt their profits considerably.

Perhaps we are finally deciding that we will no longer give our lunch money to the bully. 

 

UPDATED: All Is Not Lost?

There are many days when it's hard to feel hope. It is especially true when we think about the relentless bullying Canada receives at the hands of the mad king, Donald Trump. High tariffs, or high tariff threats, are  the only arrows in his small quiver, and our economy is suffering as a result. Sadly, in sharp contrast to the rousing, even bellicose, Liberal rhetoric of our last federal election, it seems we are turning over, with nary a word, our lunch money to the fascist and receiving nothing in return, just more abuse. 

Capitulation is never a pretty sight; however, Mark Carney refuses to get tough, even undoing counter-tariffs that he had imposed against the United States. The conclusion I draw is that we are giving up the fight. The soothing promise of better relations in the future with Trump (i.e., a renegotiation of the CUSMA agreement) seems to be the justification for our meekness, but there is nothing at all to suggest a winning strategy is at play here.

Jim Stanford says it doesn't have to be this way. The insufferable insistence by the U.S. that they alone will manufacture North American automobiles cannot be allowed to stand, and Stellantis's announcement that it will commit to a $13-billion American expansion at the expense of its Brampton works demands a strong Canadian response.

[T]he sheer gall of Stellantis’ action is shocking. It is breaking explicit commitments made to all its key partners: its own workers (in a binding labour contract), the federal and provincial governments (in binding covenants attached to various subsidies), and auto parts companies (which invested hundreds of millions in new tooling and capital for Brampton).

Despite the fact that our auto exports to the U.S. are down considerably, Stanford warns of something even worse:

If corporations respond to Trump’s extortion by shifting long-run investment to the U.S., Canada’s industrial capacity will be destroyed.

That’s why the Stellantis decision cannot stand. It would set a precedent that quickly spreads into all other high-tech industries.

It’s no coincidence these 232 tariffs are aimed at every one of Canada’s high-tech success stories: auto, trucks, steel and other basic metals, soon to be joined by aerospace, pharmaceuticals, semiconductors, industrial machinery and more.

Strong government action is required:

Last year Stellantis sold 130,000 new vehicles here — most imported, most of those from the U.S. At present Stellantis mostly avoids Canada’s 25 per cent counter-tariff on vehicle imports from the U.S., thanks to a clever Canadian duty remission program.

 Ottawa should threaten full 25 per cent tariffs on all Stellantis imports (costing $1.5 billion per year), until it recommits to completing the tooling at Brampton, paying interim income support to its workforce and then fully utilizing the plant when it’s finished.

Pushing back against Stellantis will send a signal to companies in every other high-tech industry. If you want access to Canada’s market, Canada’s resources and Canada’s supply chains, you must maintain a full-fledged production footprint here.

That Stellantis made such the decision it did is a testament to the abject failure of the Carney government's appeasement efforts, which included

multiple concessions and personal flattery. While we talk nice, [Trump] races full-speed to steal as many high-tech, high-wage jobs as he can. 

I read this morning that Industry Minister Melanie Joly summoned Stellantis to  Ottawa to explain itself. I'm sure she gave them a stern talking to, and threatened unspecified 'consequences'. However, since the Carney government has raised appeasement to a national level, I have my deep doubts whether anything substantive will be done, and people like Jim Stanford will likely find that his strong, sound advice will be not be taken under advisement. 

UPDATE: Well, another one bites the dust. GM Canada has announced the closure of the Ingersol plant, putting 1200 people out of work. It is the plant that the provincial and federal governments invested $500 million towards retooling to make electrified Bright Drop vans. The company cites low demand, but assured everyone that they "look forward to continuing our discussions with the government and our partners to identify other opportunities."

I'll just bet they do, eh?