Our Strongest Counter to the American Demands

It has rightly been said many times: nobody can win a trade war. And it goes without saying that a trade-dependent country like Canada certainly can't win a trade war with the much larger and less trade-dependent U.S. Both countries stand to lose; Canada much more.

The U.S. is counting on this imbalance (as well as a misguided or cynical disregard for its own economic interests) to press for manifestly unfair trade arrangements with Canada. They want to restrict sales of Canadian goods into the U.S. market, limit any countervailing restrictions on the sale of U.S. goods into the Canadian market, and secure priority access to Canadian energy, critical minerals and other valuable resources that presumably goes beyond what paying competitive prices would provide.

The U.S. leverage is clear -- they can hurt us more than we can hurt them. The question is: how can Canada fight back.

The Carney government appears to be doing all the right things. The more we can diversify our trading relationships, the less dependent will we be on the U.S. -- the less can they hurt us. The more we can stimulate domestic demand with interprovincial trade and more infrastructure and other investments, the less devastating will the U.S. trade restrictions be. 

Nevertheless, significant loss of U.S. markets and disruption of well-established supply chains will significantly impact Canadian businesses, workers and communities.  Restructuring our trade relationships and internal economy will take time. In the interim, business will be lost, workers laid off and families dislocated in the search for new opportunities and employment.

Knowing this, the Carney government must do more than map out a less U.S. trade-dependent future. It needs to articulate and commit to the wide range of worker, family and community support policies that will enable a major restructuring of the Canadian economy in an equitable way. It is easy for Canadians whose jobs and livelihood are not at risk to demand that we stand up to the Americans and that we refuse to accept the unfair trade relationship the U.S. wants. What we need are policies that support those at risk so they too can demand we stand up to the Americans . We need to ensure that it isn't just steel or auto or forestry workers and communities that pay the price.

The U.S. thinks it can make unreasonable demands and secure an imbalanced, unfair deal because of the pain it can inflict. Our strongest counter is to make clear that the pain they can inflict will be short-lived-- Canada will restructure and move on. In the meantime we can take the pain and we can do that because it will be shared.

Elbows up, but hearts in place.