Donald Trump’s trade war has come up against court rulings, increased inflation numbers and face another potential deterrent: the midterm elections, some 15 months from now.Alex Brandon/The Associated Press
What arbitrary trade measure against allies who have acted in good faith will the bull-headed authoritarian in the Oval Office take next?
In his sledgehammer assault on the world trading system, how much tribute will Donald Trump try and exact from allies, like Canada, that he treats like colonies?
President Dwight D. Eisenhower once spoke of the United States and Canada as having forged “a mighty unity.” Neither he nor succeeding presidents could have imagined what Kaiser Trump is doing today.
But it’s doubtful he’ll get away with the thuggery for long. The roadblocks are piling up. He’ll collide against too many realities. He’ll continue to issue his tariff edicts via fiction-filled social-media posts and he’ll change them or delay them or scrap them depending on whatever whim strikes him. He’ll inflict considerable damage in so doing. But it will only be in the short term.
One landmine he is about to face is the law. Few are talking about the fact that the bulk of his tariffs have been ruled unconstitutional by a panel of the U.S. Court of International Trade, which included a Trump-appointed judge. The court ruled he wrongly invoked the rarely used International Emergency Economic Powers Act to try and legitimize his tariff edicts.
The American economy is in relative good health, but we are supposed to believe trade deficits of not-unusual magnitude constituted a national emergency. Or that the less than 1 per cent of U.S. fentanyl traffic coming in from Canada constituted a major crisis necessitating giant tariffs.
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The lower trade-court ruling is on hold pending an appeal that is being heard in a couple of weeks. If upheld, it could well go to the Supreme Court. As conservative as that court is, it may not go down on bended knee before Mr. Trump on this case. In the meantime, the Carney government needs to hold off on making deals on tariffs that could well be thrown out.
If the courts don’t stop Mr. Trump, the inflation brought on by his tariffs well might. Data this week showed U.S. inflation accelerated in June, with prices rising on products like furniture and clothing, which have been affected by the levies on Canada and others.
Economists have warned that the Trump tariff obsession is a dead-weight, losing strategy. As he is now in throes of deciding the scale of tariffs he will imperiously impose, the inflation risk might give him pause. He may be inclined to seek out less draconian side deals with allies like Canada, and in the process save some of his own skin.
If the courts don’t get him and if inflation doesn’t deter him, midterm elections only 15 months away could do the deed. The Republicans have slender majorities in both the House and Senate, and with midterms traditionally going against the incumbent party, there is a good chance Mr. Trump will lose his knee-jerk congressional support and have his agenda blocked to a significant degree. Democrats have protectionist leanings, but oppose his tariff war.
Elon Musk, furious at the debt-ballooning “Big Beautiful Bill” the President just passed, is forming a third party which could cut into some Republican support. Mr. Musk last month accused Mr. Trump of being named in the FBI files related to Jeffrey Epstein, who was facing sex-trafficking charges before dying in prison in 2019. The matter has become a full-blown controversy, with the Trump administration being accused of a cover-up. Even Mr. Trump’s astonishingly loyal base is showing signs of fracturing over this. To be noted is that the base is also not as enthused about the need for high tariffs like he is.
On his trade war plans, Mr. Trump faces another deterrent, it being the prospect of co-ordinated opposition from main trading partners joining hands in a regime that leaves his country more isolated.
All these factors need be borne in mind by the Carney government. Its pursuit of East-West nation building at home is a wise course. Trade diversification abroad is as well. Though geographic dictate means the U.S. will remain the largest market by a whopping margin, the dependence need not be as great.
For more than a century, the two countries have followed the path of integration. While naturally catering to their own country’s priorities, U.S. presidents – until Mr. Trump – generally accorded Canada the goodwill and fair treatment a good neighbour and ally deserved.
Donald Trump is a dark detour. Detours don’t last. His extreme tariffs, should he go ahead with them, won’t last, nor will he. The economic madness he’s prompted need be seen in perspective. It’s temporary.