OTTAWA – U.S. President Donald Trump has backed up threats of tariffs in the past with real trade action, and that's why his latest comments about the Canadian dairy and auto sectors are worrying, and need to be taken seriously, say trade insiders.
On CTV's Question Period Sunday morning, Former premier of Quebec and deputy prime minister Jean Charest said Canada has to prepare for Trump to act, because as seen with the levelling of steel and aluminum tariffs on Canada, "he tends to follow through on the threats he makes."
"We have to prepare and we're very worried, and should be very worried on this side," said Charest. "On a day-to-day basis the Trump administration is confusion and chaos, but on the key issues he ran on… he has remained constant."
On Saturday, not long after departing the G7 summit in Quebec, and signing on to a joint communique with the other six allied countries, Trump sent two tweets that dissolved the allies’ agreement, and raised the stakes for two major Canadian sectors in the ongoing exchange of trade action between Canada and the U.S. This came on the heels of Prime Minister Justin Trudeau saying at a news conference that Canadians "are polite, we're reasonable, but we also will not be pushed around."
First, "Based on Justin's false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!"
This was targeting Canada’s supply-managed dairy system. "PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, 'US Tariffs were kind of insulting' and he 'will not be pushed around.' Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!"
Auto tariffs 'will be a catastrophe'
A senior Liberal source told Evan Solomon, host of CTV’s Question Period, that American-imposed tariffs on autos would be close to an existential threat to Canada’s economy.
Member of the NAFTA advisory panel and former interim Conservative leader Rona Ambrose agreed, adding it’s not the first time Trump has made such a declaration.
"We wouldn’t be surprised if he does it against our dairy sector, and perhaps our auto sector, so I think we have to be prepared for anything," she said.
Charest said if he does follow through on autos, it "will be a catastrophe," citing that 22 per cent of the cars sold in the U.S. last year were exported from Canada.
However, former U.S. ambassador to Canada Jim Blanchard said the auto sector in the U.S. won't tolerate this threat of more trade action, saying that both that industry and American farmers want to see a renewed trade relationship with Canada.
Time to put supply management on the table?
Asked whether Canada should put its supply management of dairy on the table, Ambrose said she understands it's a sensitive political subject and a "sacred cow," but "in a trade negotiation we have to be willing to put everything on the table."
Charest disagreed, and suggested that business leaders on both sides of the border keep speaking up for their interests.
In private, Trump was listening: Morneau
In an interview taped just prior to Trump's two tweets, Finance Minister Bill Morneau said that in private, Trump was "absolutely" listening.
Morneau said that during the G7, Canadian officials had the opportunity to present Trump and his team some numbers that Morneau described as indicative of how trade works between the two countries.
He also said that Trump's public expression is a reiteration of his point of view, and that "we should not be surprised to see that."
Morneau said that Canada is prepared, should the trade war escalate.
"The only way we can move forward is (to) say very clearly that these tariffs don’t work for us. That these threats are not going to result in us changing our point of view," Morneau said.
Blanchard had biting criticism for Trump, calling him a "malignant narcissist, so if you criticize him, he lashes back."
Also on CTV's Question Period, former Liberal prime minister Paul Martin said he thinks Trudeau has been "wise" and "intuitive" in his relationship with Trump.
Martin said while Trudeau shouldn’t wade into the name-calling, "he certainly has to call a fact a fact, and that’s what he’s doing."
