Trump Trades Blows with Canada

The escalating tit-for-tat over trade policy risks an all-out trade war.


peaks alongside United States President Donald Trump during a meeting in the Oval Office
Kevin Dietsch/SIPA/Newscom

America's trading relationship with its northern neighbor continues to deteriorate as the U.S. and Canada butt heads over the Trump administration's protectionism.

On Tuesday, Commerce Secretary Wilbur Ross announced that Washington would impose countervailing duties of between 6 and 10 percent on uncoated groundwood Canadian paper.

"Today's preliminary decision allows U.S. producers to receive relief from the market-distorting effects of potential government subsidies," said Ross in a statement, instructing Customs and Border Protection agents to begin collecting cash deposits from paper importers at the border.

This is hardly Donald Trump's first protectionist action against Canada. Last year he slapped tariffs on Canadian softwood lumber and Bombardier passenger jets.

Tuesday's decision prompted Canada's foreign ministry put out a statement calling the move disappointing and "unjustified" (and noting, correctly, that "any duties will have a direct and negative impact on ?U.S. newspapers, especially those in small cities and towns, ?and result in job losses in the American printing sector?"). And yesterday, a day after the paper tariffs were announced, a complaint against the U.S. that the Canadians had lodged with the World Trade Organization was made public.

In what reads like the pee dossier of trade policy, Canada accuses the United States of 188 different violations of World Trade Organization policies going back to the mid-1990s. The alleged violations include levying artificially high countervailing duties, collecting duties retroactively, and maintaining an unfair process for determining where these duties will be imposed.

The complaint covers actions taken against not just Canada but countries all around the world, from Japan to South Africa.

The WTO process allows 60 days for Canada and the U.S. to reach some form of bilateral settlement. Failing that, the dispute will goes to arbitration, which could open up the United States to having to pay compensation or otherwise face hefty countervailing duties and tariffs.

U.S. Trade Representative Robert Lighthizer has dismissed the complaint, saying "Canada's claims are unfounded and could only lower U.S. confidence that Canada is committed to mutually beneficial trade." Missing from Lighthizer's statement, naturally, was any mention of how the administration he works for has lowered confidence in the U.S.'s commitment to mutually beneficial trade.

The escalating tit-for-tat between the two largest economics in North America shows how quickly Trump's tough-talking protectionism can get out of hand. What started as tariffs on lumber products has blown up into a vast relitigation of trade disputes going back two decades.

And who will pay the price for this breakdown of relations? The consumers, workers, and businesses, both in the U.S. and around the world, that depend on the foreign trade.

NEXT: House Votes to Renew, Expand Authority to Snoop on Americans

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Rufus is so confused right now.

    1. South Park predicted this. This will end with Toronto getting nuked.

      1. …based on the belief that Toronto is the capital of Canadia, no doubt.

  2. Trump Trades Blows with Canada

    1. So NSFW is what you are saying?

    2. Well, Canada is so dreamy.

      1. You misspelled dreary.

  3. Meh. It’s okay to give our little brother a few indian burns and purple nurples from time to time to remind them not to get too cocky and think they are actually in control here.

    1. Isn’t Canuckistanistanistan like a protectorate or territory or vassal state of the USA Empire? It’s about time for the USA Empire to Strike Back!

    2. Indeed, nothing like the stable genius showing his true economic illiteracy mettle to show who is boss!

  4. So trump is wishy-washy at best and monumentally stupid cronyist at worst.

    how can you understand the outstanding value of tax cuts and cutting regulation yet be a cheerleader for trade protectionism, taxing(regulating) the internet and be for unbridled gov’t surveillance of innocent americans?

    He seems forever 50-50 on smarts and understanding of basic economics. 50-50 is complimentary because he has done some surprising great things for economic growth chances with just the two things above. The market sure likes it. Problem of course is that the FED likes him too. That is always a bad sign.

    You cannot discount, however, the value of a guy in Washington that everyone hates. That makes me like him.

    Now just stay the hell away from the internet taxation regulation crap and actually talk about real free trade. Let other foolish countries dump their cheap products on us. We get cheaper stuff. Good for all consumers. End of economics lesson. Deflation is good for the majority of people.

    1. If one is for ending regulations, one does not boast of phony half-measures as the orange one has.

    2. He knows how taxes and regulations can hurt a business.

      He knows how inexpensive competition can hurt a business.

      It’s not difficult to understand.

      1. I guess you could say that Trump is demonstrating the difference between ‘pro-business’ and ‘pro-free market/pro-consumer’. Of course, it’s not the first time business-friendly Republicans were protectionists — both Smoot and Hawley had an (R) next to their names. If Trump’s dumb screwing around sets off a trade war (as Smoot & Hawley’s tariff act did), then the markets are going to sour on him (and all of us) pretty quickly.

    3. Why do you assume the end-game isn’t less trade stipulations, not more? The threat of a trade war is a war the US will win. If there’s short term “pain” of new and worse tariffs that eventually get scaled back after negotiation to less and better tariffs than before, wouldn’t that be a good thing?

      1. Nobody “wins” in a trade war. At least nobody who matters. Because it is us, the consumers, who always lose.

        1. If the end-result is less “hostilities” (i.e. tariffs) than pre-war, then everybody “wins.”

      2. Because Trump, even going back decades before he was a political figure, has been pretty consistently (by his standards anyways) skeptical of free trade and favorable towards protectionism?

  5. In what reads like the pee dossier of trade policy

    There’s hope for Christian yet.

    1. And yet his PM Links continue to be the pee dossier of blogging efforts.

  6. When a government goes to a foreign port and restricts trade, otherwise known as an embargo, it is considered to be an act of war.

    When a government restricts the ability of its own people to trade freely, otherwise known as protectionism, it is considered to be an act of benevolence.

    1. I think the word you’re looking for is blockade, not embargo. But the overall point of your post is good.

      1. I worded it wrong, but yes. Protectionism is when a government sets up an embargo on its own people. A blockade is how an embargo is sometimes enforced. Tomayto, tomahto.

        1. Well the biggest difference is that a blockade (generally) blocks the foreign country from trading with any country, not just the country doing the blockade. An embargo is a prohibition just on the citizens of the country imposing it.

  7. And who will pay the price for this breakdown of relations? The consumers, workers, and businesses, both in the U.S. and around the world, that depend on the foreign trade.

    Then those consumers, workers, and businesses are all traitors. Patriots understand that self sufficiency and scarcity is where it’s at. The more we sell, the more money we have, and that makes us rich. The more we buy, the less money we have, and that makes us poor.

    Ideally we should produce and sell without consuming anything! That way we’ll have all kinds of money! We’ll be rich! No home, no clothes, no vehicle, no computer, no food… just money! Lots and lots of money!

    1. At least my sarcast o meter is up today.

  8. The escalating tit-for-tat over trade policy risks an all-out trade war.

    Like the canucks could hang. Trump is the anti-Trudeau. Trudeau will bow.

    That said, free trade is the best trade. So screw your “trade deal”.

  9. “Trump Trades Blows with Canada”

    Let’s just hope Rufus is okay!

  10. Finally, my paper won’t smell like maple syrup and poutine gravy anymore. That’s worth a few American jobs right there.

  11. *Rufus straps his hockey gear and skates on and grabs his stick*
    “Let’s go Hosers, it’s time to kick some Yankee ass, eh!? LONG live King Trudeau, poutine and maple trees!” /Rear Admiral Rufus Rugburn
    *Rufus leaps forward than trips on skate and falls in puddle of syrup*

    1. Hockey is played in other parts of the world, too, you know.

      Why, we even play it down here in sunny Florida!

      1. But it’s not part of a military uniform. In Canuckistan it is.

  12. The escalating tit-for-tat between the two largest economics in North America shows how quickly Trump’s tough-talking protectionism can get out of hand.

    Haha, way to bash Mexico in the face with a backhand since it’s literally the only other economy in North America. And yeah, it’s barely worth mentioning that.

  13. It’s interesting to observe the differences between the American and Canadian political systems. The simple fact is, the Canadian method actually works. Most Americans assume that hockey is the Canadian national sport. It’s not; the real national sport is voting. They have a damn election for something every couple of months.

    One of the great things is that MPs (members of Parliament — Canadian equiv of house of representatives) are home usually two days a week and have an open door policy. I can walk downtown when my MP is in town and get to see him without an appointment.

    I was talking last week with my MP about the trade bull that Trump is trying to stir up and brought up a couple of point. Primarily, the United States buys more petroleum from Canada (at a reduced price) than they do from the entire Middle East combined. China has been dying to buy coal and petroleum from Canada for over a decade. My point was, why bother “negotiating” with Trump when it actually could be more profitable to terminate all petroleum contracts with America and sell it all to China. That would put the U.S. at the total mercy of OPEC and it’s prices and definitely improve the economy for Canada.

    That’s something for the Donald to keep in the back of his mind when he thinks he’s holding all (or even any) of the cards.

  14. In any trade war between the USA and Canada, or US and Mexico, the US wins because those 2 countries WANT to buy our products more than we want to buy theirs. The trade imbalance occurs when US companies locate manufacturing facilities in either Canada or Mexico only for the cheaper labor, and then want to sell the product back in the USA.

    1. Noone is locating manufacturing facilities in Canada for cheaper labor.

      Mexico, maybe but not Canada.

  15. Another thing to remember is that California is out of water. Canada holds 1/5 of all the drinking water on earth. Let’s see how low Trump will grovel when several million citizens can’t turn on the tap and farmers can’t water crops. Starvation and thirst make for great bargaining chips.

    1. Theatening our oil imports is one thing. Threatening to cut off tap water is quite another.

      This seems to be an appropriate time to remind you that you have a tenth of our population, a thirteenth of our GDP, one thirty-fifth of our standing military budget and a twentieth of our active/reserve personnel, and no nuclear arsenal.

      If Americans were actually starving and dying of thirst, you would find out in short order that your people’s freedom to trade with or travel to other countries is entirely a product of our disinclination to take it away. Our present disinclination, that is.

  16. Oh, trade war with a country with less gdp than 3 US States?! So, the further thought, what?!?!?!

    Canada has absolutely trashed us via NAFTA. They profited. We lost. We can replace & profit internally & elsewhere. More than the disgusting Mossbacks have ever done for the US!

    Forget Canada! Or better, let’s invade! Now!!! Before another 15 Billion goes to convicted Terrorists, who murdered US Soldiers!!

    1. We can replace & profit internally

      Apply this logic to your grocery store and get back to me.

Please to post comments

Comments are closed.