How Canada Is Already Losing the Trade War

Canadian shoppers, Liberals, and the Carneyval.

Canada is up in arms that President Donald Trump is implementing automobile, steel, and aluminum tariffs. In fact, Canadians are so upset that they are engaging in “elbows-up” demonstrations, vowing to defeat Trumponomics and never become the 51st state. But, while the Great White North may think it is in a trade war, actions by the government and the people have signaled that they are participating in an imaginary conflict.

‘Buy Canada, Bye America’

Across the country, businesses, celebrities, and organizations are encouraging consumers to buy products made in Canada. The marketing campaigns are working, with a recent Leger survey showing two-thirds of Canadian consumers are buying fewer American products. The poll also revealed that 55% are buying less from Amazon. Former Canadian Prime Minister Justin Trudeau even told the public he would buy French’s ketchup instead of the Heinz alternative.

Throughout the social media ecosystem, shoppers are recording themselves boycotting American companies and goods without realizing they are still purchasing from the United States.

French’s, for example, is an American brand owned by McCormick & Company. While the tomatoes are grown in Canada, the business originates from the United States. On Reddit, individuals have posted photos of themselves consuming Chapman’s ice cream, a staple of Canada’s sweet tooth. They may not realize the company depends on American suppliers for key ingredients. Some are sipping on a bit of Bubly, a popular sparkling water beverage. While singer Michael Buble has promoted the drink, it is owned by PepsiCo. The Toronto Blue Jays had a packed house, with baseball fans singing O Canada and booing The Star-Spangled Banner. Despite Torontonians’ handwringing over the United States, they were happy to attend a US-owned MLB game.

Meanwhile, independent coffee shops have renamed the famous Americano coffee “Canadiano.” This harkens back to the early 2000s when conservatives relabeled French fries as “freedom fries” to protest France’s refusal to participate in the disastrous Iraq War. It was cringeworthy two decades ago, and it is cringeworthy now.

Let’s face it: North America is deeply integrated, and it is challenging to find products, whether raw materials or equipment, that are 100% purely American or Canadian. Boycotting gives Canada something to do other than complain about record home prices, abysmal health care, and lackluster sports teams.

What is comical is that Canadians are outraged about US tariffs but have been silent about China imposing 100% tariffs on specific agricultural products and 25% levies on seafood and pork.

The Carneyval

Canadian Prime Minister Mark Carney, who is set to help the Liberals form another majority government, has spoken to reporters presenting solutions to the Trump-fueled trade spat. The grand idea? Implement tit-for-tat retaliatory tariffs, a move widely endorsed by all political stripes – except for the People’s Party of Canada. That’s gold, Mr. Carney. Gold!

In addition, the Liberal leader has not done much to resolve the US-Canada trade dispute except promising to spend a lot of deficit-financed money to cushion the potential economic blows and give speeches vowing to dethrone America on the world stage. In the aftermath of Liberation Day, the prime minister took a more combative tone. “If the United States no longer wants to lead, Canada will,” he said. “The time has come to renegotiate our relationship with the United States.”

So far, Carney’s one reasonable proposal has been removing interprovincial trade barriers. This would lead some to scratch their heads and ask, “Why are there internal trade restrictions between, let’s say, Ontario and Manitoba in the first place?” Of course, as some Trump administration officials have insinuated and as economic experts have recently suggested, perhaps the best action would be abolishing tariffs and dismantling trade barriers altogether to avoid rekindling the inflation flame and weakening growth prospects.

If tariffs are bad when America does it, why are they good when another nation does?

Canada Can’t Afford a Trade War

The Canadian economy – and many advanced and developing markets worldwide – have been hanging on by a thread for the last few years, narrowly averting recessions with each passing quarter. The cost of living has ransacked households; the carbon tax has decimated businesses, and the budget has never balanced itself.

The United States enjoys various luxuries, from being the world’s largest economy to possessing the international reserve currency. Therefore, it can endure and survive an onslaught of retaliatory measures. As a result, the Canadian prime minister will need to do more than engage in the tired trope of tit-for-tat counter-tariffs. But with an election coming up, Carney will have to feign strength.