Published May 1, 2017 – 5:00am
Last Updated May 1, 2017 – 8:49am
As evidence, every few years, Canada and the U.S. fight over softwood lumber. They have since 1982, the year Canada got a Constitution, ET: the Extra-Terrestrial was the hit movie and Sony invented the compact disc.
In 1982, U.S. forest producers started demanding duties and penalties on Canadian lumber imports. They claimed our firms enjoyed unfair advantage by harvesting on low-cost Crown lands.
The U.S. industry tried multiple times to raise tariffs on Canadian lumber. Each time, a deal was made. But the Americans are still complaining.
It’s not just lumber. There’s a dispute over dairy products based on Canada’s quota system, which protects farmers and has been around since the 1960s.
The lumber and dairy disputes were so sensitive that both required special treatment in the trade deals of 1988 and 1994.
So it’s an old story with a new twist, President Donald Trump. He got elected railing against foreign trade and now claims Canadian cows and trees pose a dire threat to the U.S.A. Trump tells Americans they are victims of international trade and makes the amazing claim that U.S. trade negotiators have been bested in every agreement they’ve signed.
So last week, Trump’s administration slapped 20-per-cent duties on our lumber and threatened action against our dairy.
He also threatened to pull the U.S. out of NAFTA. Or pretended to. It’s hard to tell with Trump.
Supposedly, an executive order was drafted to start NAFTA withdrawal. Word was leaked to the media, obviously to put pressure on Ottawa and Mexico City.
Within hours, Trump was walking it back and saying he wants to negotiate instead. This is typical Trump: all bluster and baloney. He needs to validate his longstanding claims that trade agreements don’t work, so he’s trying to make NAFTA unmanageable.
“People don’t realize Canada’s been very rough on the United States,” Trump complained. Ottawa’s crafty envoys had consistently “outsmarted our politicians.”
I wonder how many Canadians see their politicians as diabolically brilliant negotiators.
It’s all slightly absurd. Comedian Stephen Colbert said Trump was treating Canada like “the Great White North Korea.”
Predictably, Trump’s supporters claimed the presidential zig-zag was a clever negotiating tactic, giving credit where it’s not due.
Trump’s pattern is transparent. He makes unsupportable claims and impossible promises. Then he manufactures retroactive “facts” to make his preposterous statements seem credible.
The truth is smashing trade agreements and raising tariffs will damage Trump’s own constituency. The cost of new homes, renovations and furniture will rise and American jobs will be lost if duties make lumber more costly.
Killing NAFTA would cause massive damage and disruption, not only in Canada and Mexico. The jobs of 14 million Americans rely on trade with Canada alone. Trump is putting many of them in jeopardy.
The Trudeau government is alarmed but keeping its cool, preferring diplomacy and fact-based arguments to arm-waving and threats.
Ottawa did issue a shirty note about “baseless allegations” of unfair lumber trading and American “unfair duties.” Before long, Trump and Justin Trudeau were on the phone and the NAFTA threat disappeared, for now.
Trump’s style is pure chaos. By week’s end he was threatening to “terminate” a trade deal with South Korea, which he said had left America “destroyed.”
No deal is perfect and Canada is ready to negotiate. But polls suggest Canadians don’t want Ottawa to over-react to Trump’s posturing. It’s obvious the president is playing to his poorly informed domestic base and doing it with his usual insincerity.
But the larger point is Canada and the U.S. are in for another long and difficult period of trade talks with politics, as ever, the dominant commodity.