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Our goods-trade surplus with the U.S. is not them subsidizing us. If anything, it’s the reverse: they send us paper and promises for goods
Published Dec 18, 2024 • Last updated 3 hours ago • 4 minute read
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Regarding our current predicament with our neighbours on the continent, I realize it risks a rebuke from Elon Musk to say so but if Americans had elected Kamala Harris last month, we would not currently be in a national panic about access to the U.S. market, and no one within 100 miles of the White House would be making sophomoric jokes about “Governor Justin Trudeau” of the “Great State of Canada.”
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Just saying.
We would have faced tough, protectionist demands when the Canada-United States-Mexico Agreement came up for renegotiation in 2026. The Democrats are protectionists, too. But an across-the-board 25 per cent tariff on inauguration day? No chance.
As for this business about the U.S. “subsidizing” Canada because we run a trade surplus with it (on our merchandise account, though not in services) that’s just bonkers. Subsidizing means giving something for nothing, except maybe a promise about future behaviour. Our trade surplus with them means we are the ones sending them more goods than they are sending us.
If anybody’s subsidizing, it’s us. They pay for the extra goods they get from us with currency — paper, promises, bytes — and in return get real, useful things. We send them real goods in exchange for financial promises. Sounds like we’re the ones being had. So enough about “subsidizing.”
If launching a trade war against us, suddenly and deliberately, is the way America now treats its friends, well, forget about friendship, too.
Yes, I do know my Palmerston/De Gaulle/Kissinger: countries don’t have friends, only interests. But, sharing the world’s longest undefended border, we and the Americans are closer to being country-friends than any other country pair.
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So how does threatening your friend with sudden, unprovoked and unjustified 25 per cent tariffs fit into neighbourly relations? No more “undefended border” platitudes the next time a president visits — which may be quite some time since, after the last two weeks, Donald Trump’s popularity in Canada will be way lower even than Joe Biden’s in the U.S.
Maybe it’s nothing personal. Maybe we’re just being made an example of, pour encourager les autres. The Europeans presumably are supposed to think: if this is how Trump treats Canada and Mexico, what’s in store for us?
Whether America’s adversaries — Russia, China, Iran — are as impressed is another question. Picking on small, friendly, essentially defenceless countries demonstrates precisely nothing about what the U.S. intends for countries with plenty of defences and much more malign intentions. It is a well-known characteristic of bullies to torment the weak and sidestep the strong.
In some ways, though not through trade, the U.S. clearly does subsidize us and has for a long time. Their air and anti-missile defences have defended our northern border since the 1950s — even if much of what they might shoot down in an attack would fall on us.
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But apart from its potential to be a skyway and graveyard for hostile ICBMs, our Far North hasn’t actually required much defence. Its remoteness and frigidity were its main defences. Granted, that may be changing. As Russia and China get more feisty geopolitically and the area’s waters become more navigable, we need to be more present in its defence.
The Americans’ difficulty here is their own compelling interest in keeping Russia and China out of northern North America. What economists call “public goods” are like that. Whoever gets the most benefit may end up paying for them while everyone else free-rides. Free-riding is not honourable but it’s a realistic temptation, given how the costs and benefits work.
Though Trump wrote a book on the art of the deal, his choice of “diplomatic” tactic — the “blusterf–k,” you might call it — is hardly the best way to get people to do what he wants in the long run. What self-respecting person doesn’t resent being browbeaten into doing things, even (maybe especially) the right thing?
How much more policing our southern border needs, and in which direction, is debatable. In recent years, the flow through Roxham Road and similar places was well observed but not stopped. We need drones and helicopters less than we need different laws.
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Our cities say they have a problem with guns coming from the U.S. — an American trade surplus we should try harder to interdict. Our almost boasting refusal to give our two per cent’s worth to NATO truly is shameful, as is our federal government’s customary view of military procurement, not as part of defence or international obligation, but as an opportunity to deliver pork in the name of industrial and regional policy.
Of course, if the Trump strategy is ultimately to disband NATO and appease aggressors, perhaps military spending really is money wasted.
There has always been a strong strain of anti-Americanism in this country, which was founded in part by people who opposed and fled America’s revolt against Britain. More recently, it has been confined to precincts of the left, from the merely muddle-headed to the truly loony. But if the majority of Canadians who admire the American experiment and favour genuinely friendly relations are roughed up by roundhouse tariffs, what then?
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Maybe their president doesn’t mind if his country has no friends, so long as his rallies continue to draw approving crowds. I hope, and suspect, many other Americans do mind. Time for them to step up.
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Publish date : 2024-12-17 22:02:00
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