Source: The Conversation – Canada – By Ilan Kapoor, Professor, Critical Development Studies, York University, Canada
United States President Donald Trump has temporarily put his trade war against Canada and Mexico on hold after vowing to slap 25 per cent tariffs on most Canadian and Mexican imports, although he’s imposed tariffs on all steel and aluminum, including from Canada.
He has also upped the ante by threatening to increase tariffs should Canada carry through on its own threat of retaliatory tariffs, with the possibility of further sanctions in the spring following a U.S. government study investigating ways to address the country’s trade deficits.
This is nothing less than an attempt at the economic subordination of Canada by its giant and — until very recently — friendly neighbour and ally. But what makes Trump’s impending trade war even more absurd is that it is based on a series of lies.
Trade, drugs, migrants, banks
Trump has claimed that the U.S. has a “US$200 or $250 billion” trade deficit with Canada. The American government’s own data show that the trade in goods deficit with Canada in 2024 was US$55 billion.
But when you factor in services (in technology or finance), an area in which the U.S. currently enjoys a trade surplus, the annual U.S.-Canada annual trade deficit falls to US$45 billion. And if you exclude energy exports, sold to the U.S. at a discount, the trade scales tip decidedly in favour of the U.S.
Then we also have Trump’s claim that tariffs are needed to penalize Canada for allowing an “invasion” of drugs (mainly fentanyl) and undocumented migrants into the U.S.
But once again, figures from his own government agencies show that only 1.5 per cent of migrants apprehended in 2024, and a mere 0.2 per cent of all fentanyl impounded at U.S. borders in 2024, originated in Canada.
Finally, just hours before the American reprieve on tariffs, Trump raised a new red herring: that Canada does not allow American banks into the country. But many U.S. banks do operate in Canada, making up half of the country’s foreign banking assets.
The grip of populism
So why such lies? I suggest that we need to look to nationalist populism for an explanation. A deep, often irrational, emotional bond underpins this form of populism.
Just as was the case in his 2016 election campaign, Trump’s 2024 campaign successfully tapped into people’s frustrations and anxieties over everything from high food prices to the housing crisis and rising precarious employment as he promised once more to “make America great again.”
Tariffs featured prominently, with Trump bidding to put “America First” by punishing the country’s three largest trading partners — Mexico, Canada and China — for their alleged “unfair” trade practices.
These types of seductive populist slogans unite people under a common banner, soothing their anxieties. But the accompanying peril is their dependence on the construction of national enemies to unify the nation. In 2016, Trump singled out Muslims and Mexicans. Today it is migrants, trans people and America’s supposed three main trading villains.
Dangerous sentiments
Trump’s populism is therefore built on irrational, if not dangerous, sentiments: blind fear, pridefulness, xenophobia, transphobia, racism and aggression.
No wonder he engages in both blatant falsehoods and unabashed bullying. His lies are integral to his continuing attempts to paint the U.S. as a victim, despite its global supremacy in many areas, thereby justifying attempts at subordinating America’s putative “enemies” and even its friends. Populist sentiment, precisely because it is rooted in the irrational exuberance of pride and unity, cares little about facts, logic or veracity.
A case in point is Trump’s affirmation that the U.S. is “subsidizing” Canada as a result of the trade deficit. The allegation contravenes any economic sense — trade deficits are the result of market-driven imports exceeding exports — yet its deployment here evokes the anxiety-producing prospect that Canada is ripping off American taxpayers.
Populist passion trumps rational argument. Bluster whips up national fervour.
Much ado about nothing
This is also why Canada’s efforts to appease Trump have yielded little to date. Days after Trump’s election win, Prime Minister Justin Trudeau was quick to visit him at his Florida estate in an attempt to reassure him on fentanyl and migrants.
The Canadian government then announced a $1.3 billion border security package and improved state oversight of the production of opioids.
In the days leading up to Trump’s tariff executive order, Canadian federal ministers and provincial premiers also frantically engaged in a public relations offensive (interviews on American TV, meetings with congressional lawmakers and Trump’s cabinet nominees) aimed at changing minds. All to no avail.
Trump finally blinked only a few hours before the Feb. 4 tariff deadline. All it took was the offer by Trudeau of measures that, for the most part, had already been included in the previously announced border security/fentanyl measures. It seems the repackaged deal was enough to allow the president to declare a victory, while granting Canada a mere temporary reprieve.
Read more:
Trump’s tariff threats show the brute power of an imperial presidency
So all in all, much ado about not too much. Lots of theatrics and brinkmanship, but little advancement, especially on the supposed main problem to be addressed — trade deficits.
The Trump administration has basically stuck to its populist platform, providing more evidence that rational decision-making does not play a role.
Quite the opposite, in fact: attempts to appease Trump appear to have been taken as proof that his threats work, and more demands are undoubtedly in store. That’s evident by the continuing prospect of tariffs in March and the possibility of more to come afterwards (including on steel and aluminum).
Self-defeating irrationality
Trump’s tariff war is senseless. If the measures go ahead, they could plunge Canada into a painful recession requiring state stimulus to support the economy and jobs, and retaliatory and counter-retaliatory trade measures.
This may well be Trump’s intention — he has declared he wants to annex Canada by “economic force” — but it is likely to backfire. Any future trade war will harm not just Canada, Mexico and China, but also the U.S.
Canada’s counter-tariffs target Red States, where Trump derives most of his electoral support.
And given the American dependence on Canada for some 50 per cent of its crude oil imports, Canada’s nuclear option is to impose export tariffs on oil to the U.S. That would cause American prices at the pump to increase dramatically overnight and prove highly unpopular.
In the longer term, then, no one stands to win as a consequence of Trump’s irrational populist policy-making. In the meantime, expect not much else from Trump’s administration than more unpredictability, brinkmanship, intimidation … and, yes, lies.
Ilan Kapoor does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. Trump’s lurking assault on Canada rests on endless lies and irrational populism – https://theconversation.com/trumps-lurking-assault-on-canada-rests-on-endless-lies-and-irrational-populism-249256
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