With thanks to Paul Krugman, Distinguished Professor of Economics at the Graduate Center of the City University of New York and winner of the Nobel Memorial Prize in Economics
Trade policy mavens sometimes use numeric shorthand that refers to relevant parts of the Trade Act of 1974, which spells out situations in which the president has the right to impose tariffs. There’s Section 201, giving temporary relief to an industry that is being hurt by an import surge. There’s Section 232, protecting an industry vital to national security. There’s Section 301, responding to subsidies or other practices that give foreign producers an unfair advantage. The tariffs Donald Trump just imposed on Canada and Mexico—nations with whom he himself signed a free trade agreement—don’t fit any of these categories. Maybe they’re Section 000, meaning that the president has simply lost his mind. Or maybe they’re Section 666: he’s just evil.
The newspapers this morning all contain analysis pieces trying to explain why Trump is imposing 25 percent tariffs on Canada and Mexico. You can see the writers struggling, because this is a profoundly self-destructive move—it will impose huge, possibly devastating costs on U.S. manufacturing, while significantly raising the cost of living—without any visible justification. Yet the conventions of mainstream journalism make it hard to say directly that the president’s actions are just vindictive and senseless. To its credit, the New York Times analysis comes closest, acknowledging that for some reason Trump personally loathes Canada, a nation most of the world stereotypes as “nice.” Obviously, not every Canadian is a nice person. But Canadians are relatively courteous on average, and the country’s social and economic policies are relatively decent by international standards. And it seems clear to me that Trump hates them for their decency.
To be fair, there are some efforts to explain what’s happening that go beyond Trump’s personal pathology. Some Canadians think Trump covets their mineral wealth. And there’s always the possibility that Trump knows how big Canada looks on standard maps, unaware both of the way that its land area is exaggerated by the Mercator projection and the fact that much of it is tundra, and thinks, “Real estate!”
Trump also goes on about Canada’s trade surplus with the United States, which he keeps saying is $200 billion a year—it’s actually less than a third that size. And nobody has offered a coherent justification for his claim that when Canada sells us cheap oil and electricity, we are somehow subsidizing them. In any case, efforts to find some kind of economic justification for Trump’s Canada-hatred have the feeling of desperate efforts to avoid the obvious. Canada is a pretty decent place, as nations go. And Trump, whom nobody would describe as a decent person, dislikes and maybe even fears people who are. I mean, look at the people Trump has chosen to play prominent roles in his administration. I guess if you search hard enough you can find officials without a sex scandal, a financial scandal, a history of anti-semitism or racism, or a record of substance abuse in a senior position. But it isn’t easy. It really looks as if being vile is a fundamental job qualification.
And so we’re having a trade war. Trump appears to believe that we don’t need anything from Canada. Automobile manufacturers who rely on Canadian parts, Midwestern oil refineries that rely on Canadian oil, builders who rely on Canadian lumber, households that rely on Canadian hydropower for their electricity will soon learn otherwise. Trump may imagine that he can bully Canada into submission. But he can’t; Canadians of all political persuasions are furious. Doug Ford, the conservative premier of Ontario, has the right attitude: he has threatened to cut off U.S. electricity “with a smile on my face.” And remember that Canada can’t concede to U.S. demands, even if it were in a mood to do so (which it very much isn’t), because there aren’t any coherent U.S. demands; Canada has done nothing wrong!
So I don’t know how this ends. But U.S. voters will soon be feeling real pain, and I very much doubt that it will end in a Trump victory.
