No More Mr. Nice Canada
Canada's reputation for friendly politeness, especially when dealing with the United States, is long overdue for revision.
Call it Gen. Ross’s Law: The longer any nationalistic argument between a Canadian and an American goes on, the probability that the Canuck will invoke the War of 1812 approaches 1.
The War of 1812, which saw the United Kingdom do battle with a fledgling United States via its Canadian territories, was, in the grand scheme of things, a pretty unimportant war. Its most lasting historical contribution might be the sense of superiority it has conferred on generations of geopolitically insecure Canadians who cling to the fact that, in one particularly daring raid led by Gen. Robert Ross, British forces managed to set fire to the U.S. capital, including the recently built White House. That pride has always been grounded in fantasy and indulged in as a historical curiosity.
But ever since U.S. President Donald Trump justified his slapping of steep tariffs onto Canadian-made steel and aluminum by telling Prime Minister Justin Trudeau that it was a security decision — even citing the White House arson — Canadians have been obliged to inhabit that brief moment of chauvinist glory as a living reality. Trudeau and Foreign Minister Chrystia Freeland have already stood their ground, insisting that Canada would not abide being pushed around by its bigger neighbor.
“You may feel today that your size allows you to go mano a mano with your traditional adversaries and be guaranteed to win,” Freeland said upon receiving the Diplomat of the Year award from Foreign Policy this week, without name-checking Trump. “But if history tells us one thing, it is that no one nation’s preeminence is eternal.”
It all might seem out of character for a country with a famously polite political and cultural reputation. But it’s that reputation, more than anything, that’s in need of revision. This isn’t the first time that a war of words has erupted between Washington and Ottawa, or that the former has felt compelled to try bullying the latter. It’s fair to wonder whether Canada, through its stubbornness and self-righteousness, invites this sort of treatment, precisely so it can react to it.
In 1965, then-Prime Minister Lester B. Pearson gave an address at Temple University, where he suggested a bombing halt in Vietnam. The next day, Pearson found himself at Camp David, where, according to then-Ambassador to the United States Charles Ritchie, President Lyndon B. Johnson grabbed Pearson by the lapel of his coat, raised his hand, and warned the prime minister: “You don’t come here and piss on my rug.” Somehow, the two managed to continue working together.
President Richard Nixon was more passive-aggressive toward his Canadian contemporary, Pierre Trudeau — Justin’s father — but with similar levels of disdain. In 1971, Nixon canceled the Bretton Woods economic agreement without warning and slapped a 10 percent surcharge on all imports — a move widely seen as an attempt to bolster support from blue-collar workers in advance of the following year’s election. America’s friends were not exempted from the shock that ensued.
Trudeau called up Nixon in late 1971 to try to wriggle his way out from under the tariffs. “If you’re going to be protectionist, let’s be in it together,” he said, as heard in White House tapes released in 2008. In some of the intelligible parts, Trudeau tells Nixon: “If you were going to take a very protectionist trend, our whole economy is so importantly tied to yours, we’d have to make some very fundamental decisions.” Trudeau would go on to give Nixon a long lecture in supply chains and continental trade. For that he earned the title of “pompous egghead” and “asshole,” from Nixon — though at least Nixon kept those comments between himself and his aides.
In a move that may sound familiar, Nixon’s White House tried to exact concessions from Canada, with an eye to lessening the trade dispute. As the New York Times wrote in 1972, Nixon’s White House suggested that “Canada should extend to individuals the present right of Canadian car manufacturers to import American‐made vehicles duty‐free.” (In the United States, consumers could buy Canadian cars-duty free.) It was a minor trade irritant, but one that Nixon was hungry to fix. “Why, then, doesn’t Ottawa extend the tariff exemption to individuals?” The Times wrote. “Perhaps the most important reason is the public belief that Mr. Trudeau is ‘standing up to the Americans.’”
And that’s the key to understanding the present iteration of U.S.-Canadian tension. When it comes to Canadian-American relations, two things have always been crucial to Ottawa, to varying measure: that the relationship as a whole remain as efficient and profitable as possible, but that Canada not be rolled over or taken advantage of. This, perhaps, informs Canada’s penchant to invoke the War of 1812 whenever possible. Inversely, the White House has always been obsessed with getting the best deal for its linchpin industries. Neither country is beyond cutting off its nose to spite its face.
The current dispute is consistent with that pattern in interesting ways. The younger Trudeau considered himself a Trump whisperer early in the president’s tenure. The prime minister, his Cabinet, and his various advisors have prided themselves on their connections and friends. The members of Trudeau’s inner circle are happy to rattle off who they count as Team Canada — including White House chief of staff John Kelly, influential Republican Sen. John McCain, and Trump’s son-in-law, Jared Kushner.
That strategy was designed to safeguard the wildly lucrative North American Free Trade Agreement and make sure Trump didn’t forget that his country, despite his nationalist streak, has international obligations. But that work went up in smoke when the U.S. Department of Commerce, in a January report, recommended a spate of steel tariffs on national security grounds, concluding that worldwide excess production is a signal that the U.S. industry will be unable to compete, and without the tariffs, the domestic industry may be under threat.
The truth is, however, there is no real U.S. domestic steel industry. So much of the supply chain is tightly linked into Canada. To that end, the January report specifically recommended exempting Canada. Leo Gerard, international president of the United Steelworkers union, told the department that, from an economic standpoint, “Canada is one of the few countries that has always been there for us with no question.” Retired Brig. Gen. John Adams told Commerce that Canada is the “one supplier in whom I have complete confidence.” But Gerard did make a sidelong point that exempting Canada from the tariffs “requires that Canada also strengthen and align its trade enforcement efforts with ours.” His argument, in short, is that China may use Canada as a dumping ground for its steel as a “way-station” to enter the United States.
Ottawa has been plenty freaked out by the subtle subsuming of Canadian industry by the Chinese government. Recently, the government blocked a $1.5 billion takeover of Canadian construction giant Aecon by a Chinese state-owned company on security grounds. And Trudeau already, months ago, set up a process to prevent Chinese dumping more efficiently. He might be left wondering: What else do you want us to do? Canada saw where the ball was going and gave Trump a way to exempt Canada while still slapping import taxes on the rest of the world — and the president declined.
Of course, for Trump, this dispute isn’t really about national security. It’s about the welfare of a domestic industry. As a Heritage Foundation analysis points out, the Commerce Department’s national security argument “presumes an absurd scenario where America’s longest-standing allies, such as Canada, side with Russia or China in ‘World War Three.’” That is rather unlikely. And one need only look at the president’s Twitter feed — as, I’m sure, a World Trade Organization arbitration panel may yet do — to realize that the administration has all but dropped this flimsy pretext of national security. The president slammed Trudeau repeatedly before and after the G-7 summit over, of all things, dairy.
And this is where Canada’s pride comes in.
Canada does, in fact, have an incredibly trade-averse dairy industry. A Soviet-style agrarian regulation system manages licensing, prices, and supply for dairy, eggs, and poultry, and it slaps tariffs — from 100 percent to nearly 300 percent — for all foreign imports. (Although some products, including American milk protein, is allowed to enter duty-free.) U.S. industry has always hated these rules. Under the Trans-Pacific Partnership, Ottawa agreed to expand duty-free access for member countries — which, by the way, no longer includes the United States now that Trump pulled out. But, generally, Canada axing the supply management system for dairy and poultry is a political nonstarter. The United States is looking out for its steelworkers, and Canada is defending its farmers.
Ottawa does a very good job of preaching free trade to Washington but bristles at the thought of dropping its own protectionist measures, proclaiming that it has sovereignty to manage its own agricultural sector. At least Canada is willing to negotiate in good faith.
What comes next is harder to figure out. Trudeau has staked so much of his own political capital on being Mr. International, the English-language corner of the Macron-Merkel-Trudeau triumvirate. This G-7 was supposed to showcase that, but that fell apart quickly. Trudeau needs to get that relationship back to balance without looking weak to his own voters. The plan, right now, may be to make an end run around Trump. Congressional leadership, whom Canada has worked hard to befriend, has voiced opposition to Trump’s tariffs, while Treasury Secretary Steven Mnuchin reportedly lobbied against the Canadian trade penalties. With the midterm elections coming up, it will be an open question whether Trudeau plans on leveraging that Canadaphilic goodwill to political ends.
If, however, Trump doubles down, expect Trudeau to double down just the same.