Trump’s Trade War With Canada Is a Bad Omen for Other Trade Partners
The potential for escalation between the neighbors is high, and the American president's protectionist zeal may soon affect others as well.
It seemed that the world had become accustomed to Donald Trump's aggressive tariff policies and knew how to handle them. But this makes the new trade war between the U.S. and Canada, two of the most closely intertwined economies, all the more unsettling.
Washington's imposed punitive tariffs and Canada's threatened countermeasures will mean some industries are hit hard, but the impact on the broader economy remains limited for now. This makes the potential for escalation between the two governments all the more dangerous: Trump harbors a very particular hatred for his liberal neighbor, which represents an attractive alternative to his authoritarian policies, and Canada's Prime Minister Mark Carney feels emboldened by public opinion in Canada to play the role of a resistance fighter. Neither side has much of an incentive to back down quickly.
Reigniting Tensions
America's other trade partners should be worried that, since Trump's campaign against Iran has failed, he will once again turn to his protectionist tendencies and give free rein to his egomania through new tariff threats. There are plenty of reasons for him to reignite trade tensions with the European Union or East Asia once again. It is uncertain whether, as was the case last year, Trump's fear of turmoil in the financial markets will prevent the worst from happening.
It seemed that the world had become accustomed to Donald Trump's aggressive tariff policies and knew how to handle them. But this makes the new trade war between the U.S. and Canada, two of the most closely intertwined economies, all the more unsettling.
Washington's imposed punitive tariffs and Canada's threatened countermeasures will mean some industries are hit hard, but the impact on the broader economy remains limited for now. This makes the potential for escalation between the two governments all the more dangerous: Trump harbors a very particular hatred for his liberal neighbor, which represents an attractive alternative to his authoritarian policies, and Canada's Prime Minister Mark Carney feels emboldened by public opinion in Canada to play the role of a resistance fighter. Neither side has much of an incentive to back down quickly.
Reigniting Tensions
America's other trade partners should be worried that, since Trump's campaign against Iran has failed, he will once again turn to his protectionist tendencies and give free rein to his egomania through new tariff threats. There are plenty of reasons for him to reignite trade tensions with the European Union or East Asia once again. It is uncertain whether, as was the case last year, Trump's fear of turmoil in the financial markets will prevent the worst from happening.
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