Old horse traders will tell you the only time a rip-off occurs is when the buyer wants to buy more than the seller wants to sell.
The anticipated trade war between the United States and Canada will end with a trade deal. The question is what will that deal look like? Not good If Canadians want a deal more than Americans.
Oddly enough, president-elect Donald Trump and the besieged Liberal party both need a trade war for very different reasons.
An impending trade crisis creates the perfect opportunity for Katie Telford and Gerald Butts (and whoever the Liberals chose to be their pretend leader). They will craft the perfect narrative with Trump in the role of villain, Canadians cast as victims and the strong and brave Liberals playing the hero.
In the face of crisis, the Liberal masterminds hope to escape Canada’s lost decade. They can sweep massive debt and deficits under the rug. The cost of servicing the Trudeau debt now exceeds the total revenue from GST. But heck, there’s nothing to see here.
They can ignore a decade of declining productivity, rising taxes, mediocre public service, diminished living standards, squandered natural resources and cratered expectations for the future. The Liberals will tell you none of that matters in the face of the evil Donald Trump.
Get ready for the new Liberals with the same old crew running the show. They will cast Liberals as virtuous and Canadians as victims. They desperately need this trade war.
Trump also needs a trade war but for very different reasons.
His narrative is all about making America great again. Picture factories cranking out Caddys while happy workers head home to their families. Good, high-paying, low-skill jobs returned to America from the bad people in China, Mexico and (oddly) Canada.
That, at least, is the story. But Trump has more powerful and immediate reasons to love tariffs. He needs the cash.
Tariffs on Canadian exports have nothing to do with fairness for domestic industries. The folks in Detroit don’t need protection from Windsor workers.
The art of taxing is like plucking a chicken. The objective is to get the most feathers with the least squawking. Tariffs are the perfect way to place an invisible tax on American consumers under the guise of punishing evil foreign governments.
Notwithstanding the much-hyped Elon Musk initiative to shrink government, Trump isn’t going to seriously address profligate spending and habitual deficit spending. Government cuts are politically painful.
Instead, Trump will rely on revenue from tariffs to fund his priorities. His recent announcement of a new agency, the External Revenue Service, feeds the narrative that Canada, Mexico and China will pay for tariffs, not American consumers. It’s an eerie echo of the Mexico will pay for the wall fairy tale.
Canada needs to aggressively counter this narrative. Forget diplomacy and lobbying. We need to take our case directly and forcefully to the American consumers.
That would require spending some cash to reach Americans with the truth about tariffs and taking direct aim at Trump’s new taxes. It won’t be pretty.
Do our leaders, political and corporate, have the backbone to fight a real trade war in the messy world of social media? Trump is betting we don’t.
He is probably right. Absent a new approach and a direct outreach to Americans, the old horse traders would figure Canada is about to get out-traded.