John Ivison: Trump's mad tariff crusade will sink itself. Carney just needs to wait for it

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11-03-2025

There was a narrow window for detente between the monomaniacal Captain Ahab at the helm of the U.S. federal government and the new prime minister-designate of Canada.
President Donald Trump's beef with Justin Trudeau was personal, but Mark Carney is a tabula rasa, notwithstanding his comments on Sunday that Canada will never be part of America in any shape or form.
There was an opportunity for conciliation and Carney was urged by some on social media to suggest to the president that they meet soon to discuss de-escalation.
But the window slammed shut abruptly when Trump said on Tuesday morning that he will slap an additional 25 per cent tariff on Canadian steel and aluminium — taking the total tariff to 50 per cent — in response to Ontario's retaliatory tariff on electricity exports.
In the president's eyes, American tariffs are a justified means of protecting U.S. jobs. Retaliation is viewed as an 'abusive threat.'
He seemed genuinely shocked that anyone would hit back against his repeated provocations.
'Can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat?' Trump posted on Truth Social.
(Ford announced Tuesday afternoon he would hold off on the electricity tax for now and travel to Washington to talk things over with the White House.)
If Trump's rhetoric to this point has been intemperate, the latest salvo was incendiary. Canada must drop its 'anti-American farmer' tariffs, meaning this country's supply management system on eggs, poultry and dairy, and all other 'egregious' longstanding trade barriers. Otherwise, Trump said, he will increase planned tariffs on cars coming into the U.S. on April 2.
That 'will permanently shut down the automobile manufacturing business in Canada', he said.
Once again, he repeated his solution to all these problems: Canada should become a 'cherished 51st state.'
The 'artificial line of separation' — the Canada-U.S. border that dates back to the Treaty of Paris in 1783 — would disappear and the country's national anthem, O Canada, could in future represent a 'GREAT and POWERFUL state within the greatest nation the world has ever seen.'
This is what comes from 'winning' at golf every time he plays.
No Canadian politician can engage seriously with a foreign leader whose stated, unapologetic goal is the annexation of the country.
The hope must be that Trump is compelled by his own supporters to abandon the wealth-vaporizing policies of mercantilism and autarky
The only strategy is to match him blow for blow and let him burn himself out.
And there are signs that this is exactly what is happening. Even after a healthy report on U.S. job openings on Monday morning, stock markets tanked across the board because of Chinese retaliation on agricultural products and broader uncertainty over tariffs.
Economist Noah Smith estimated that the S&P 500 has fallen 7.5 per cent in the past month, wiping out $4.5 trillion (that's trillion with a T) in wealth. Trump's announcement on Tuesday sent it down a further 1.44 per cent (as of 1:30 p.m. in New York).
Trump has suggested that a little temporary pain might be felt as the economy adjusts to tariffs, refusing to rule out a recession when asked in an interview on Sunday.
But Smith suggested The Onion satirical news site had it right with its headline: 'Trump Says Recession Unfortunate But Necessary Step To Get to Depression.'
In Smith's view, there is no utopia on the other side of tariffs because autarky — economic independence or self-sufficiency — has always failed. America has thrived because of gains from the exchange of goods that have allowed specialization, economies of scale and technology transfers, without which it will end up with Galapagos syndrome (where technology develops in isolation, incompatible with global standards).
'Trump is moving very fast toward making this outcome inevitable — swinging his baseball bat at everything in the shop, determined to wreck as much of the U.S. economy as he can in order to prepare the way for a utopia that he will never be able to build. And now, he's proven that he doesn't care about the stock market or recessions or anything else that might suffer in the name of his ideology. If he isn't stopped, it will just keep getting worse,' Smith concluded.
Former U.S. Treasury Secretary Lawrence Summers called the action on steel and aluminium tariffs a 'self-inflicted wound,' since it will increase the price of key inputs for U.S. manufacturing industries that employ 10 million people.
The disquiet extended to Trump supporters like Republican senator Rand Paul, who posted on social media that 'market indexes are a distillation of sentiment and when the markets tumble like this in response to tariffs, it pays to listen.'
Paul's home state of Kentucky has just seen its bourbon pulled off shelves all over Canada, so he knows the pain will be shared.
Anthony Scaramucci, Trump's former communications director and now a bitter critic, offered some advice to Carney on this week's edition of The Rest is Politics podcast, suggesting he should not engage with Trump.
'If I were Carney, I wouldn't visit Trump or shame myself with a stupid stale buttered roll at Mar-a-Lago while trying to impress him. That is not going to work,' he said. 'My message is that this cannot last. Is the best strategy to ignore Trump? I do believe that. Fortify your own country and speak out against him, so you can galvanize your own nation.'
Carney appeared to do exactly that in his response to the latest threat, saying his government will keep tariffs on 'until the Americans show us respect and make credible and reliable commitments to free and fair trade.'
As Carney pointed out on Sunday, victory will not be easy. Ottawa said on Tuesday that it will issue a U.S. dollar-denominated global bond, largely because investors want a premium for Canadian-dollar bonds.
The hope must be that Trump is compelled by his own supporters — including the tech bros who have lost hundreds of billions of dollars in recent weeks — to abandon the wealth-vaporizing policies of mercantilism and autarky.
Scaramucci pointed out that imposing tariffs on Canada is not popular in the U.S., even with Trump's base.
'He didn't campaign on Canada being the 51st state,' he said.
That has not stopped Trump forcing all Americans to support his fanatical mission, much like Ahab compelled the crew of the Pequod to hunt the great white whale, Moby Dick. In that case, Ahab was dragged to his death and his ship sunk.
Let's hope the crew can save the captain from himself this time.
National Post
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