Canada Draws Red Line Against Trump's Tariffs, Rejects Unequal Trade Relationship

By instructing his negotiators to walk away from trade talks with the US — reportedly over Washington’s last-minute demands — Canadian Prime Minister Mark Carney has drawn a red line against President Donald Trump’s weaponisation of tariffs. Canada’s economy is deeply integrated with that of its superpower neighbour, and Carney’s “dollar-for-dollar” retaliation against Trump’s 50 per cent tariffs on around $20 billion worth of Canadian goods will inevitably hurt businesses and workers on both sides of the border. Among other “unacceptable” demands, said PM Carney, Washington seeks to restrict Canada’s ability to pursue trade deals with other countries, which would amount to an erosion of Canadian sovereignty. Elected to power not too long ago on a promise to stand up to Trump’s threats, Carney has done the right thing by rejecting an unequal trade relationship. In doing so, he is also acting on his assessment at Davos seven months ago: The “rules-based order”, he had said, “is fading”. The Trump tariffs touch products from Canadian wine and dairy to furniture, clothing, cement and hockey equipment. Should Carney proceed with Canada’s retaliation from September 8 onwards, there will be risks, both political and economic, for his country. But the popularity of the “Buy Canadian” campaign —an expression of economic nationalism triggered by Trump’s threats, including making Canada the 51st state of the US — has already shown that many Canadians support their government’s challenge to the US president. Carney will now have to convince them that the costs of confrontation are worth paying. For the Canadian PM, the showdown with Trump is the clearest test yet of his thesis that middle powers must stand up to great powers and unite. Indeed, he has been busy securing deals in Asia and Europe, a paradigm shift away from Canada’s economic dependence on the US so far. It is too early to say whether these new partnerships have the substance to mitigate the pain that a breakdown in US-Canada relations will cause. But Carney is doing something rather rare in the Trump era: A middle power is saying no to a superpower.