I’m no fan of Prime Minister Justin Trudeau but, credit where credit is due, he delivered an appropriately hard-hitting condemnation of U.S. President Donald Trump and his “dumb” tariff war against Canada and Mexico on Tuesday.

Trudeau said tariffs are not related to border security and fentanyl smuggling from Canada. “What (Trump) wants is to see a total collapse of the Canadian economy, because that will make it easier to annex us,” he said. “That’s never going to happen. We will never be the 51st state.”

There’s no walking back such comments, but Canadians wanted to hear them, and now his successor — whoever that may be — can avoid acrimony, lower the temperature and hopefully get to the negotiating table as quickly as possible to find a solution.

Although Trudeau was blunt, he was merely taking a page out of Trump’s playbook. “It’s not in my habit to agree with the Wall Street Journal, but Donald, they point out that even though you’re a very smart guy, this is a very dumb thing to do,” said Trudeau.

On Monday, the Wall Street Journal took the president to task, in an article titled: Trump Takes the Dumbest Tariff Plunge. It wrote: “The Dow Jones Industrial Average took a 650-point header after he announced that he’ll hit Mexico and Canada on Tuesday with 25 per cent tariffs.…

“Mr. Trump also objected when we reported an analysis by the Anderson Economic Group that the 25 per cent tariff will raise the cost of a full-sized SUV assembled in North America by $9,000 and a pickup truck by $8,000. Is this how the new Republican party plans on helping working-class voters?”

Markets have continued to fall, along with both the Canadian and Mexican currencies. The imposition of tariffs on over $1 trillion in trade will yield a windfall for government coffers. But consumers will suffer and corporations will be hit, notably retailers like Walmart and Target that source products made from outside the United States and make small margins.

For Canadians, the stakes couldn’t be higher. Their products will become less competitive south of the border and Trudeau’s retaliatory tariffs will add to their costs. Structurally, the Canadian economy will be hollowed out. Hardest hit will be Canada’s most successful sectors, such as auto manufacturing, agribusinesses, forestry, mining and, to a lesser extent, oil and natural gas.

Trump’s aim is to shut down factories in Canada and reopen or build new ones in the United States. But the question is: How quickly can new plants be built? And how will worker shortages and low unemployment be overcome?

The outlook for Canada and Mexico is grim. Both countries have become overly dependent on the three-way trading agreement that Trump has cavalierly ripped up. And seeking recourse through the World Trade Organization and the dispute mechanism contained in the USMCA may be meaningless if Trump simply chooses to disregard them.

While Trudeau may have delivered a powerful riposte, he is single-handedly responsible for weakening Canada over the past decade. He failed to build pipelines and find new markets for our energy products. He overtaxed and overspent. He nixed resource development. He allowed in a flood of immigrants. And he turned away countries that wanted to invest in, and buy, Canadian energy.

Trudeau also leaves behind a political mess. He is a lame duck leader whose soon-to-be-chosen successor will also be a lame duck until a general election is held and, based on the current roster of candidates, will be someone who’s totally ill-equipped for the task.

Rudderless, a smart, rich and talented nation is left in the lurch by a Liberal party that failed to meet Canada’s NATO commitments, triggered a major outflow of capital and investment and failed to maintain the country’s sovereignty by neglecting the military and ignoring the Arctic.

In his press conference, Trudeau struck the right note when asked if he agreed with Warren Buffett, who described these tariffs as “an act of war”: “Canadians are not angry at American people for this. We don’t have anything against Americans. Americans are our neighbours, our friends, our partners. We do things together, we’ve done things together for decades and generations.

“This is a policy decision by the American government designed to go after the Canadian economy. This is a trade war, yes.… We’re probably going to keep booing the American anthem, but let me tell Americans we’re not booing you, we’re not booing your teams, we’re not booing your players. We’re booing a policy that is designed to hurt us.”

Financial Post

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