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Donald Trump spent the past week cozying up to North Korea and attacking Canada. Whatever claim the US had to be a beacon of free trade — not to mention moral leadership — has been demolished like the East Wing of the White House.
And so it was probably inevitable the president would dig the prototypical failed economic policy of the 20th century out of history’s dumpster and operationalize it against our closest ally.
Smoot-Hawley tariffs are back, baby! Sure, aggressive levies cutting off trade as a means of stimulating domestic industry never worked for those people. In fact, it effectively crashed the global economy and turned a recession into the Great Depression. But it may work for us!
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It will not work for us. But it may make us so roundly despised that it galvanizes other countries to reimagine the world order so as to cut out the one, heretofore indispensable nation.
USMCA? Never heard of it!
Upon returning to office, Trump immediately took a Sharpie to “the most modern, up-to-date, and balanced trade agreement in the history of our country, with the most advanced protections for workers ever developed” — also known as the USMCA, which he himself negotiated in 2018 as a replacement for NAFTA
"We don't need anything that Canada has, we don't need anything that Mexico has, but they need everything that we have,” he blustered in June. “We don't need their cars, we don't need their lumber, we don't need their energy, we don't need anything that they have."
This is self-evidently ridiculous.
Canada supplies roughly 80% of the potash American farmers use as fertilizer. Midwest refineries are built to run on heavy Canadian sour crude, and the pipeline infrastructure simply doesn't exist to swap in lighter, American-produced oil from places like Texas. Canadian hydropower fuels a significant share of the electricity supply in New York and New England. And the auto and auto parts trade between the two countries, already strained by Trump's steel and aluminum tariffs, is about as integrated as two countries' economies get.
And yet Trump negotiated as if Canadians could never say no, even as he demanded crippling concessions and lobbed humiliating insults at our stalwart ally. Trade talks were at an impasse after 18 months of threats and taunts about annexing our northern neighbor. But in July the prospect of an additional 50 percent levy on a sprawling list of Canadian goods forced Canadians back to the negotiating table. And last week, with the major principles agreed, Trump congratulated both sides for striking “a very fair deal.”