When slapping new tariffs of 50 percent on Canadian goods, the Trump administration offered the pretext that Canada imposes its own protectionist measures on various American goods. (It’s pretextual because the true explanation is that the president loves tariffs of any sort.) It pointed to three import categories where Canada discriminates: alcohol, dairy, and automobiles.
Set aside that, regardless of their rationale, tariffs hurt both Canadian exporters and American buyers, in the same way that an excessive sales tax hurts both the supermarket and its shoppers. And set aside that Trump’s tariffs sweep far more broadly than the injuries he alleges. On every contention, the White House is technically telling the truth. Canadian provinces have, in fact, restricted purchases of U.S. alcohol. “As part of its complicated and protectionist dairy system,” Canada does impose a burdensome tariff-rate quota on U.S. cheese. It also taxes American car imports at 25 percent.
In isolation, these are reasonable grounds for America to complain. In context, they are laughable.
Two of the three Canadian policies cited by the White House were implemented only last year, in response to much broader tariffs by the Trump administration. No province in Canada banned U.S. alcohol before Trump began wildly, and without provocation, taxing Canadian imports. Likewise, the vast majority of U.S. cars were imported with zero tariffs under the United States–Mexico–Canada Agreement (USMCA), which Trump himself negotiated in his first term. Canada’s levy on U.S. cars was also retaliation for Trump’s own auto tariffs.
As for “complicated and protectionist dairy systems,” the United States has been right up there with Canada for decades. In addition to subsidizing dairy farmers directly, the federal government manages a strict per-country quota system with high duties on imports that exceed it. The administration gripes that Canada’s tariff-rate quota for cheese is higher for the European Union than for the United States. Yet the American system does exactly the same, allowing Europe to export seven times as much tariff-free cheese as Canada does under the USMCA.
The administration is pretending that his latest trade actions are tit-for-tat. Really, they are tit-for-tat-for-tit. It was Trump who started this engagement. His subordinates concede this point with a whine: “Over the past year and a half, only two countries have chosen to retaliate against President Trump’s tariffs rather than negotiate a deal with the United States: the People’s Republic of China and Canada.” How rude of them.
If the aim was truly freer trade with Canada both ways, the means to achieve it would be to renegotiate the USMCA, as scheduled, for greater market access. Initial negotiations during Trump’s first term were how the government got Canada to raise its dairy quotas, and it could do so again. Instead, the president says he doesn’t care about extending the deal.
Trump’s newest tariffs on Canadian imports aren’t about balancing the scales or ensuring freer trade in the future, no matter what the authors claim. The tariffs are the point.