Canada has been attacked. The attack came from our closest ally — our friend for 200 years and next-door neighbour!
It was a surprise attack because the incoming president of the United States never mentioned a problem with Canada during his election campaign. It also surprised most Americans.
President Trump’s main reason for attacking an astonished “Canadian beaver” could be his belief that Canada was the source of the USA’s fentanyl scourge. We are not. Less than one per cent of America’s fentanyl enters the U.S. from Canada. The main sources are Mexico and China.
Another possible reason is Trump’s belief that Canada is taking advantage of the United States economically.
His evidence is our trade surplus. In an earlier column, I argued that this surplus is an illusion because it doesn’t consider “invisibles.” One example is the advertising money which moved from legacy media to social-media giants like Facebook and Google. This (Canadian) money appears in social-media accounts as profits, but doesn’t feature in trade statistics.
This move also beggared our newspapers and broadcasters, bankrupting many and causing substantial job losses in this sector.
I am furious. Not with President Trump. He is famous for exaggerating and lying to suit his political agenda, but it is silly to be angry at lions for killing zebra. More logically, one might be angry with Americans who allowed themselves to be duped into voting for a womanizer and convicted felon.
No, I am furious with my Canadian political leaders who discussed their strategy for dealing with Trump’s tariffs in the media. Since when do military commanders reveal their plans to an invading army?
Moreover, several of our politicians had cheered Mr. Trump’s election victory.
One of these leaders, Doug Ford, took two decisive measures. He removed American wines and spirits from LCBO shelves. Since the LCBO normally sells $1 billion of American wine and spirits every year, this could seriously hurt that business sector. He also cancelled a contract with Starlink, one of Elon Musk’s companies, to provide internet service in Ontario’s northland.
Although the LCBO move was suspended in response to the one-month pause implementing the 25 per cent tariff, Canadian citizens have taken individual action. Sales of American wines and spirits are well down.
Shopping trips to the U.S. have declined. Many Canadians cancelled planned winter vacations in Florida, Arizona and Texas. Since Canadians contribute nearly 40 per cent of Florida’s tourism income, if we “vote with our feet” and stay away, Trump’s home state will be seriously impacted.
We are aboard a cruise ship now. We asked the dining room staff not to serve us American wines, explaining that we are Canadian. They (from southern Africa, Latin America and South Asia) all nodded approvingly. When we are seated at a table with Americans, they get American wine, but we are, discretely, served New Zealand, French or Chilean products.
Oranges are a fine example of an action Canada could take. Canadians are the main export market for Florida’s oranges. Canada buys around 10 per cent of Florida’s orange crop. If we were to make Brazil our supplier, that would seriously hurt Trump’s home state’s most lucrative agricultural crop. (Brazil is the world’s leading grower, producing 30 per cent of the world’s oranges, which is double American production.)
But we could do more. Canada supplies 52 per cent of America’s crude petroleum. We could levy an export tax on crude oil to the U.S.? Of course, they could get crude from elsewhere, including new “drill, baby, drill” product from within the United States. However, their refineries are set up to refine heavy oil. These would take months to reconfigure to handle lighter grades. This engineering work plus any tax we levy would raise American pump prices – immediately.
Alternate sources for heavy crude are Venezuela, but their industry is shambolic, and Mexico is very likely eager to help us send Mr. Trump a message. Even if Americans opt for other crude oil sources, Canadian tar sands petroleum is cheap because it is tied by pipeline to American refineries. Heavy crude from any other source would have to come by sea. On top of that, America needs bitumen to repair asphalt roads, and light crude contains less bitumen.
No matter how you look at it, prices at American gas pumps would rise.
We send a lot of natural gas to the U.S. We have been too lazy to seek other markets. However, we could and should work on sending our gas east.
Up to now, Quebec has resisted attempts to run pipelines through the province. Recent events might have changed their minds.
However, we could instead build (much shorter) pipelines to Hudson’s Bay. We would need to build a (costly) plant to liquefy the gas for marine transport. However, this would be worth it just to give our producers other buyers – particularly customers who pay in hard currency (Euros). As a bonus, our gas this would help Europe move away from Russian product.
And then there is Elon, apparently “the power behind the throne.” Quite suddenly, after the election, Tesla sales dropped by over 60 per cent in Germany and France, Europe’s largest car markets. This seems to be tied to Musk’s vocal support for Germany’s far-right politicians. In Britain, where electric car sales rose by seven per cent, reaching 21 per cent of registrations, Tesla’s sales declined eight per cent.
In China, by far the world’s largest electric car market (and 35 per cent of Tesla sales), Tesla sales dropped 11.5 per cent in January. China’s domestic car manufacturers provide tough competition for Tesla, but that only explains part of the decline.
President Trump’s campaign was built on a grand and endlessly repeated lie — MAGA, or “Make America Great Again.” Much of the electorate clearly believes that America was, somehow, no longer “great” and that Mr. Trump could “fix” that.
However, there is no evidence that America’s “greatness” had actually diminished. Part of its claim to being “great’ was based on industrial muscle, an undisputed fact. Another part derives from military power. This, in turn, depends heavily on the industry sustaining it. (Industrial success is a vital element missing from Russia’s position, as their stunted economy simply doesn’t have the required resources.)
However, the major portion of America’s “greatness” stems from its vast network of alliances. Many nations depend directly on military alliances with the U.S.
Others benefit simply by living in a world where “Pax Americana” created a base upon which they built their economies, even if they do not have actual trade or defence treaties with the United States.
Last year, before the election, Mr. Trump found an old Arabian lamp partly buried on Mar-a-Lago’s beach. It had been exposed by a recent storm. He tried polishing it with his tie — immediately a genie appeared grateful, to be liberated from the lamp.
“For this, I will grant you one wish – anything you desire!”
Trump asked to be made all powerful.
He should have asked for wisdom.