American president-elect Donald Trump’s tariff threat is a high-stakes problem for Ontario and Premier Doug Ford.
Ford appears to be working on the Trump issue full-time, and so he should be. If Trump’s threat of a 25-per-cent tariff on Canadian goods were to become a reality, Ontario would be hardest hit. The province did $493 billion in two-way trade with the U.S. in 2023. To put that in perspective, if Ontario were a country, it would be the Americans’ third largest trade partner. Ontario is the top export destination for 17 American states and number two for another 11.
Ontario’s auto industry is particularly vulnerable. Five major car manufacturers, three of them American, produced 1.5 million light-duty vehicles in Ontario last year. On top of that, the centrepiece of Ford’s economic strategy is the development of an electric car industry with heavy emphasis on producing EV batteries. The province has committed billions of dollars of taxpayers’ money to the venture, but it all rests on preferential access to the American market. Without that, all bets are off.
For Ontarians, punitive new U.S. tariffs would mean lost jobs and higher prices for American imports if the federal government retaliates with tariffs of its own. For Ford, a tariff war would mean fewer tax dollars for government and more spending to protect the economy.
It’s no wonder Ford is working so energetically to find a solution that would avoid a damaging tariff war. Ford’s approach is not quite political 3D chess, but it’s fair to say that both his tactics and his strategy are superior to what we’re seeing from other Canadian politicians.
Ford has mostly avoided getting tangled up in Trump’s nonsensical musing about annexing Canada as the 51st state. There is no desire for that in Canada and no realistic mechanism to make it happen. The “idea” is nothing more than a way to wind up Canadian politicians and distract them from the main issue, which is Trump’s desire for a trade deal that’s more favourable to the U.S.
With that in mind, Ford has proposed a “Fortress Am-Can”: a plan for North American energy security that would help guarantee the Americans’ future energy supply by delivering Ontario power. As it happens, Ontario already has an ambitious electricity expansion plan and the province owns a major power-generation company. Ford is proposing a good deal for Ontario and trying to sell it as a good deal for the Americans.
Ford’s proposal is couched in language designed to appeal to Trump. Ford says the proposed deal would “usher in a new American and Canadian century defined by unprecedented growth, job creation and prosperity.” That’s the result that Trump predicted for his annexation plan, minus the annexation.
Fortress Am-Can is a muscular if somewhat clunky name that could resonate with a president who likes to put up walls around his country — real or tariffed. In essence, Ford is suggesting Trump include America’s best friend, Canada, within the wall. Ford has also been quite explicit about keeping Mexico out of any new trade deal, which would hamper a major competitor of Ontario’s car industry.
The Ford plan would mean the U.S. buying more from Canada, not less, but despite Trump’s blithe comments about Canada not having anything the U.S. needs, energy security is an important issue and the U.S. is not well positioned to meet its future electricity needs.
Ford is working hard to sell his vision of a new, cooperative future that would benefit both the American and Canadian economies. His campaign for an enhanced trade deal rather than higher tariffs is not limited to persuading Trump. On Wednesday, Ford said that he has been talking to many congressmen, senators and governors. More visibly, the premier has been making the case for Ontario and Canada on American TV. Next month, Ford will lead a delegation of premiers who will meet with key U.S. politicians in Washington.
Reaching out to other American leaders is the right strategy. Americans need to understand that tariffs will drive up the cost of things Americans buy, and kill jobs in export industries. Leaders in the states most affected will have an easier time grasping that than Trump does.
Overall, Ford’s approach is polite, positive and constructive, pointing to a deal that could be good for both countries. Two thumbs up for his effort so far.
National Post
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