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“Protectionism teaches us to do to ourselves in time of peace what enemies seek to do to us in time of war.”
— economist, philosopher and journalist Henry George
More Trump tariffs are on the way. The only good news is that with each new tariff, the U.S. president is inflicting as much or more damage on himself and his MAGA movement than he is on other countries.
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The Macro
Regardless of political stripe, you have to have some sympathy for Prime Minister Mark Carney having to share a private box with U.S. President Donald Trump during the World Cup final in New Jersey on Sunday. For nearly three hours, Carney had to listen to the leader of the free world threaten to impose additional tariffs to protest the amount of smoke from Canadian wildfires drifting across the border with the U.S.
This is, of course, crazy stuff. But it’s particularly galling since the global wildfire threat is a direct consequence of increased temperatures and decreased precipitation triggered by global warming, a phenomenon that Trump denies and has done everything to exacerbate in his second term.
Reportedly, Carney’s strategy was to ease the president’s concerns about smoke by offering to double oil and gas exports to the U.S. Although that was likely an offer Trump would stop to consider, it’s also rife with tragic climate-change irony. But was it successful?
Who the heck knows?
On Monday, Trump announced he was imposing 50 per cent tariffs on Canadian goods to punish the country for having the temerity to impose counter-sanctions to his earlier tariffs.
Yep, that’s right. Having completely disrupted the Canadian economy with earlier rounds of tariffs, Trump is apparently enraged that we stopped visiting the U.S., took American booze off government shelves, having left market barriers in place on things like milk and imposed some counter-duties on American imports to Canada.
Canada, you cheeky, impertinent monkey!
So, we are to believe Trump did impose tariffs to combat our efforts to combat his earlier tariffs, but he didn’t do it because of the wildfire smoke? Because punishing a neighbouring country for the byproduct of a natural disaster would be loony, right?
Why ask why Trump did it, particularly when there’s a good chance Trump doesn’t even know for sure?
(For the record, the U.S. has more active wildfires raging right now than Canada, and some of our fires are actually the result of American fires jumping the border. That is exactly what happened in Minnesota’s Superior National Forest, where an enormous blaze called the Thumb Fire crossed the border into northwestern Ontario. So, it would be fair to describe these fires and the resulting smoke as a continental problem. Just saying.)
Smoke or no smoke, we’re looking down the barrel of yet another threat from the bully in the White House. I’m starting to think that Trump spends all of his time watching the 1941 classic film The Maltese Falcon. In particular, the scene where Humphrey Bogart roughs up bad guy Peter Lorre. “When you’re slapped, you’ll take it and like it.”
That has to be a bully’s ultimate fantasy, no?
In the event Trump follows through with more tariffs, I have to admit to being somewhat conflicted. Like most Canadians, I do not want anyone losing their job or business because of the tariffs. On the other hand, Trump is doing so much damage to his political brand, and that of anyone with the desire to carry the MAGA brand into the next presidential election.
Trump’s tariffs have hurt a lot of people in a lot of countries, but arguably nobody has suffered more than Americans themselves. The latest non-partisan research into the impact of Trump’s tariffs shows that they have functioned more as a tax on American consumers than on foreign countries or businesses.
Trump collected an additional $200 billion in customs revenue last year from his tariffs, but most economists estimate that 90 per cent or more of that burden as borne by U.S. consumers as importers merely passed on the costs of the tariffs in the form of higher prices.
And remember, although importers stand to recoup close to $150 billion of the tariff charges thanks to a U.S. Supreme Court ruling that found most of them to be illegal, consumers will get no rebate or refund. Even worse, prices raised to account for tariffs are unlikely to come back down.
Heading into this year’s midterms, and the presidential election two years after that, Trump imposing even more tariffs will only jack up prices and inflation, two things that will make voters cranky and unwilling to buy into Trump’s twisted logic.
Which is to say, Trump is maybe a handful of tariffs away from watching MAGA go up in smoke.
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