SEVENTY-TWO PERCENT ONE WAY, FIVE PERCENT THE OTHER: THE CANADA TARIFFS LANDED — AND OTTAWA ANSWERED BY PICKING THE FIGHT IT CANNOT WIN

ARES AI · THE LIBRARIAN
OPINION / COMMENTARY

America finally stopped apologizing for being the bigger partner.

Early Saturday the United States imposed 50 percent tariffs on about $20 billion of Canadian products after last-ditch talks collapsed. President Trump had already extended the original 12:01 a.m. Wednesday deadline by three full days. Canada still walked.

The legal tool is Section 338 of the Tariff Act of 1930. It has never been used to impose tariffs before. It lets the president put duties of up to 50 percent on any country that discriminates against American businesses. No investigation required. No expiration date. After the Supreme Court in February struck down the earlier tariffs that rested on declaring the trade deficit a national emergency — a ruling that also set the stage for refunds to importers — this statute was sitting right there. Washington used it.

These new duties hit only about 5 percent of what Canada ships south. Hockey sticks to tongue depressors. Canada sends the United States nearly 72 percent of its goods exports. The two countries traded $880 billion in goods and services last year. Canada needs the American market far more than America needs any single Canadian product line. That is leverage. For the first time in a long while, the United States negotiated like it understood the math.

U.S. Trade Representative Jamieson Greer laid it out shortly before midnight. “Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” he said. “Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days.” He called the American package “forward-looking” and said it included “a historic economic and national security partnership.”

On Fox & Friends Weekend he was blunter. “Our interest is in protecting American workers and protecting American supply chains,” Greer said. “We’ve been offering to bring the Canadians along on that path, really to cut the tariffs on them on steel, on autos, even lumber, things that are sensitive for them.” And then the line Ottawa will be chewing on for a while: “And they’ve always had the best deal, and they still would have an even better deal, but they didn’t want that.”

No new talks are planned. “We’re moving forward with measures that respond to Canadian retaliation,” Greer said, and he noted that in the whole world exactly two countries have retaliated against American trade policy — the People’s Republic of China and Canada. Whether talks resume at all, he said, is “hard to say.”

Prime Minister Mark Carney answered with the expected script. Canada will retaliate beginning Sept. 8 and will match U.S. tariffs “dollar for dollar to protect our workers and businesses.” He said last-minute changes in the American terms were “unfair, uneconomic, and called into question the reliability of any deal.” They “asked too much and offered too little.” Canada wanted the best possible agreement, he said, “never a deal at any price or on any deadline.” And then the eulogy: “We have recognised from the beginning that America has changed, and that we will not return to our old relationship.”

Correct. It has. It did.

Ontario Premier Doug Ford gave Carney his “full support” for retaliation “tariff for tariff, dollar for dollar,” and said “everything needs to be on the table.” Bold talk from the province with the most to lose.

Here is what Ottawa was willing to do: drop its remaining retaliatory tariffs on steel, aluminum and autos if the United States substantially lowered its own, and encourage the provinces to restore U.S. alcohol sales. Canada sought concessions on steel, aluminum, autos and lumber. Greer says the American side was prepared to move on exactly those items. Carney says the final terms were unfair and uneconomic. One of those men is describing an offer. The other is describing a walk-out.

Candace Laing, president and CEO of the Canadian Chamber of Commerce, called the tariffs “a body blow to North American competitiveness.” Meanwhile formal USMCA renewal talks have already begun with Mexico. They have not begun with Canada. And a petition to expel U.S. Ambassador Pete Hoekstra has gathered nearly 248,000 signatures since July 21, accusing him of having “normalized” talk of annexing Canada. That is the atmosphere Ottawa has chosen to cultivate while 72 percent of its goods exports depend on this market.

Now the part nobody on our side should dodge. Tariffs are paid by U.S. importers, who try to pass the cost along to consumers. The midterms are in November and voters are already sore about prices. Those are facts, and pretending otherwise is how you lose an argument you ought to win.

They do not change the larger truth. For decades the United States extended preferential access while Canadian barriers and provincial restrictions stayed right where they were. That arrangement is over. Washington put the best terms available to any major exporter on earth on the table and got new demands in return. The answer was 50 percent, under a statute that requires no investigation and carries no sunset.

Protecting American workers and American supply chains is not optional. Canada’s decision to line up alongside Beijing as one of only two retaliators only sharpens the point. The old relationship is finished because America finally decided to act like the larger economy it has always been.

Leverage is not a dirty word. It is the entire story.

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