How does Enemy #9 wind-up as the #1 Target?
I don’t pretend to have any more insight into the mind of U.S. President Donald Trump than you, but if one looks at American trading stats from last year, his focus on Canada is curious. According to the Wall Street Journal, there are eight nations with a larger trading surplus than Canada, yet Mr. Trump is going after just the top two so far: China and Mexico (other than Canada, that is).
U.S. Balance of Trade in Goods in USD, 2024 (WSJ):
China: -$295 billion
Mexico: -$172 billion
Vietnam: -$123 billion
Ireland: -$87 billion
Germany: -$85 billion
Taiwan: -$74 billion
Japan: -$68 billion
South Korea: -$66 billion
Canada: -$63 billion
India: -$46 billion
Thailand: -$46 billion
Italy: -44 billion
We buy more services from the U.S. than we sell in return, and Canadians shouldn’t forget that our US$63 billion merchandise trade surplus is dramatically impacted by >US$150 billion of Canadian oil and gas exports, heating American homes and powering their refineries — they could always buy that oil from Iran, Russia or Venezuela if they preferred. Given that such details seem irrelevant to the U.S. Administration, one has to assume there’s a very specific reason why Canada is being singled out for the first volley of tariffs — rather than Vietnam or Ireland, for example.
And it has nothing to do with fentanyl or terrorism, even if Canada could do far better on that front (see prior post “Some easy steps on terror front” Aug 7-24).
If you back-out how poorly Canadians treated Mr. Trump’s Great White North hotel expansion as a driver, the only logical rationale behind his Trade War is the Canadian auto industry. We send the USA plenty of trees, oil, gas, potash, road salt, run-of-river hydro-electric power…but none of these raw Canadian exports can be ported to American soil (but for annexation).
U.S. workers already process, refine or otherwise industrialize our God-given gifts — as has been the case for decades. And they just acquired another one of our steel companies, thanks to a naive Liberal cabinet (see prior post “Jagmeet Singh, you need an issue voters can rally behind and I have just the thing” Sept 8-24).
The one victory Mr. Trump can theoretically be trying to deliver the workers of Ohio, Michigan and Kentucky is plenty of extra shifts — plus the visuals — by ensuring that Ford, GM and Stellantis start to repatriate production to the very States that helped Republicans retake the White House last Fall.
If Mr. Trump truly believed that the revenue from these tariffs would help the Republican Congress reduce income taxes, why would he have suspended most of them after a mere 48 hours? He did subsequently hit Canada with dairy tariffs, which won’t amount to much revenue, but will please some of the same U.S. farmers who were worried about the impact of Mr. Trump’s tariffs on their fertilizer prices:
Experts warn the price of groceries may rise because of the tariffs imposed Tuesday on Canada, Mexico and China, but before the produce lands on shelves, farmers will be affected first.
The worry from farmers stems from fertilizer. According to data from the United States Department of Agriculture (USDA), nearly 90 percent of various fertilizer imports come from Canada, which could create a ripple effect not just for farmers, but for the broader food supply chain in the state.
“Is that good for our economy, to make our farmers who we rely on, who support us, who feed us — drive them out of business?” Gov. Kathy Hochul said.
It all smacks of local politics, which takes us back to the Canadian auto industry. Ireland’s trade surplus is far higher than Canada’s, and Vietnam is home to offshore clothing production for Calvin Klein, Gap, Nike, North Face, Tommy Hilfiger, Under Armour, etc. Why wouldn’t Mr. Trump be chasing those foreign factories out of the gate?
It defies explanation, unless the visibility of the auto industry, or his personal animus towards Prime Minister Justin Trudeau and the Liberal Party of Canada, have made us Enemy #1.
The recent 22-point polling swing in many Toronto-area federal ridings is consistent with the theme of a piece I wrote for The Star on November 6th, even if it’s the Liberal Party, and not Mr. Trudeau himself, who are the beneficiaries of this entirely predictable situation (see prior post “One big winner of the U.S. election: Justin Trudeau” Nov. 6-24):
With Trump’s election, Toreador Trudeau now gets to protect Canadian water, fight for dairy farmers in the coming USMCA renegotiation, and shield Canadian women from the overarching influence of U.S. Republican legislators.
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The Grits have done a terrible job with our economy, but interest rates are dropping, the TSX Index is at an all-time high, and pollster Nik Nanos reports that consumer confidence in vote-rich Ontario just hit “a new 30-month high.”
Trudeau’s remaining opportunity for electoral deliverance may just come from throwing some well-aimed banderillas in Trump’s general direction.
None of which can be ignored by Ford (F-NYSE), for example, when the time comes to consider restarting its Oakville, Ontario plant (see prior post “That bitter winter wind you're feeling might just be a recession” Dec 12-24):
Production of the Edge ended in April, leading to the lay-off of 3,179 workers at the Oakville plant. These Ford employees know all to well that the Edge’s U.S. sales swooned following a peak in 2017. Badges come and go, and that particular Ford plant may land another line for its Super Duty pickup truck in 2026, but the promised EV platform has been delayed until at least 2027.
The 30-day tariff pause is plenty of time for auto Execs to think that through, and I can’t imagine Ford proceeding with plans that would divert additional F-350 pickup truck volume away from existing assembly lines in Kentucky and Ohio. Even if those plants were at capacity.
That some Polymarket gamblers are risking even a single dollar on the question of whether or not “Canada will join the US as a 51st state” prior to the end of June is only newsworthy because it speaks to the cover this mayhem is providing to members of the MSM who are looking for excuses to avoid focusing on the Liberal Party’s failings over the past nine-plus years.
In early December, former Bank of Canada Governor Dr. Stephen Poloz said that Canada was already in a recession, and not just a “technical one.” He was right.
Mr. Trump may have a master plan up his sleeve, but its fascinating to watch him knowingly save the Liberal Party from what had been certain electoral oblivion.
MRM
(this post, like all blogs, is an Opinion Piece)
On a separate but related note, so China just announced tariffs on Canadian goods/imports, as you’d expect mostly agricultural but… Is 'Team Canada' going to boycott all Chinese made products now that they've hit us with counter-tariffs?
Are we going to pull Chinese booze off our liquor store shelves? Are we going to declare an emergency and retaliate to hit Beijing where it hurts?
What are the rules here?
Definitely illustrative of how delusional and desperate many Canadians are.
Reality bites and too many Canadians want to live in a political and economic fantasy world.
I think missing from your excellent article is the security component. The fact the U.S. wants Canada to be a sovereign country both economically and militarily can’t be overlooked. Our economy has been penetrated by international criminal organizations and individuals who appear to now have significant influence over policy makers and their policies. The TD bank’s recent conviction and the bank’s relationship to top Liberal Frank McKenna (board of directors) and now Mark Carney by extension with his role at Brookfield and it’s investment activities is being overlooked by the Canadian MSM, by Canadians, but unlikely not by The Trump administration.
I think too, our military’s inability to shoot down (identify) balloons traversing our airspace last summer equally has set off alarm bells.
Then there’s our open door immigration policies relating to GAZA, Syria, Mexico, Iran…
All, IMHO, when combined with the regional “must win” border State political dynamics, add up to and result in Canada’s vulnerability and targeting by a once steadfast ally.
…and then there’s the Leftist control of the Canadian government, it’s media arms, our complicity in the USAID laundering scams, our own taxpayer money laundering scams, electoral scams Harper’s 2015 defeat,Scheer’s undoing, and the clear election interference of 2018, and most recently the BC election, and then there’s the personal animosity thrown in for colour.
So…!