"The End Of Canada"

I keep thinking back to Trump's remark last year that Justin Trudeau, in his last days as prime minister, told him that "a 25% tariff on the Canadian auto industry would be 'the end of Canada'". Via the AP:

Trump invoked Section 338 of the Tariff Act of 1930 to impose 50% tariffs on Canadian products ranging from hockey sticks to beer.

In proclamations issued Monday, Trump claimed that Canada discriminates against American exports of autos, alcohol and cheese. He is angry over Canada’s retaliation against his own tariffs last year, which were imposed under the pretext that Canada should do more to stop fentanyl smuggling.

. . . Section 338 of the law authorizes the president to impose tariffs of up to 50% on imports from countries that have discriminated against U.S. businesses. No investigation is required. Nor is there any limit on how long the tariffs can stay in place.

Section 338 tariffs have never been imposed. U.S. trade negotiators traditionally have favored another tool, Section 301 of the Trade Act of 1974 — though the United States used the threat of Section 338 levies as a bargaining chip in trade talks in the 1930s.

Canadian reaction has been massive:

Saskatchewan Premier Scott Moe also flatly rejected the idea of using potash and energy as a leverage point and Quebec Premier Christine Fréchette said she's "not there." A planned joint ceremony on Friday between the U.S. and Canada marking the opening of the Gordie Howe International Bridge has been canceled after President Trump announced a 50 percent tariff on certain Canadian imports, including alcohol and dairy.

The tariffs were in response to what the administration described as “discriminatory” trade measures from Canada, and a senior administration official confirmed to reporters that it impacted products ranging from “wine to hockey sticks to cement.”

Earlier this month, the two countries agreed to open the long-delayed $4.7 billion bridge connecting Detroit to Windsor, Ontario, following a slate of negotiations that Trump said brought a “much better deal” for the U.S. on toll revenue.

“In light of trade action threatened by the United States earlier this week, it would be inappropriate to proceed with a celebratory event between the two countries,” Jenna Ghassabeh, a spokesperson for Canadian Infrastructure Minister Gregor Robertson, said in a statement to the Associated Press.

“We remain committed to opening the bridge on July 27th, and to celebrating this milestone among Canadians on July 24th,” she continued.

. . . The bridge is named after Canadian hockey star Gordie Howe, who spent 25 seasons with the Detroit Red Wings.

Ontario premier Doug Ford is in his usual fettle over Trump:

Ontario Premier Doug Ford says he would like to see his fellow premiers and Prime Minister Mark Carney be "a little more vocal" in the face of U.S. President Donald Trump's latest tariff threat.

As the premiers gathered in Charlottetown this week, Ford was the most aggressive in condemning Trump's move to impose 50 per cent tariffs on dozens of Canadian goods which are set to be enforced next month.

. . . As he has during much of Trump's second term, Ford came out swinging on Tuesday and reiterated calls for Canada to cut off energy exports to the U.S.

"We are an energy powerhouse and we could dismantle the U.S. if we wanted to," he told reporters.

But other premiers didn't go as far as Ford — or rejected the idea altogether.

. . . Alberta's Danielle Smith said point blank that withholding energy is "not going to happen."

Saskatchewan Premier Scott Moe also flatly rejected the idea of using potash and energy as a leverage point and Quebec Premier Christine Fréchette said she's "not there."

But the real issue is the renegotiation of the USMCA:

The Trump administration has decided not to renew its trilateral trade pact with Canada and Mexico, instead opting to conduct annual reviews of the treaty that President Donald Trump once called “the best agreement we’ve ever made.”

. . . Trump “chose not to rubber stamp a USMCA renewal without addressing existing issues,” a senior administration official told reporters in a call announcing the move.

“In other words, the United States did not agree to renew the USMCA in its current form,” the official said. “So, as a result, the USMCA is not renewed.”

. . . When the new deal came into effect in July 2020, Trump touted it as “the fairest, most balanced, and beneficial trade agreement we have ever signed into law.”

But Trump’s enthusiasm for USMCA has recently waned, coinciding with mounting strain on the U.S. relationships with its two neighbors.

“I don’t know that I’m going to renew it,” Trump said of USMCA in June. “We don’t need anything that Canada has. We don’t need anything that Mexico has, but they need everything that we have. And they have to treat us better.”

Trump's overall position is that Canada can't survive economically without favorable tariff treatment from the US, and he seems to see little reason for the US to continue on tbat path.