The Costs of Defying Trump Are Mounting for Canada

The Economist: “Mark Carney is governing through paradox. Canada’s largest trading partner, the United States, is led by an unreliable man who uses trade barriers as a weapon. For Canada, diversification of trade partners is wise, but takes time. Building infrastructure needed to serve new markets requires significant investment. And yet little would do more to get that investment flowing than a trade deal with the United States…”

“The plan seems to be to buy time, and to keep negotiating. Canada will match the new American tariffs ‘dollar-for-dollar,’ but delay that retaliation until September 8th. David Colletto, the boss of Abacus Data, a polling firm, believes support for Mr Carney will soar as a result of this escalation. The political risk that comes with signing a trade deal that Canadians cannot stomach is far higher than that from Mr Trump’s tariffs.”

“But however bad Mr Trump’s deal might have been for Canada in the long run, declining it and letting new tariffs come into force will hurt in the short term.”