How Canada can hit the U.S. where it hurts in fight against Trump’s tariffs

If Canada decides to retaliate against U.S. President-elect Donald Trump’s tariff threat, experts suggest that the government should target areas that would hurt the U.S. economically and politically. The goal would be to find iconic American products that resonate with Trump’s supporters or constituencies he cares about, in order to get maximum notice in the U.S.

Trump has threatened to impose 25 per cent tariffs on Canadian and Mexican goods unless both countries tighten their borders to prevent the flow of drugs like fentanyl and illegal migrants into the U.S. This threat has left Canada questioning its leverage to prevent such tariff actions.

Trade experts believe that Canada may have to retaliate in order to protect its interests. Wendy Wagner, an Ottawa-based international trade lawyer, hopes that officials and stakeholders from both countries can communicate the negative impact of such tariffs on highly complex supply chains. This could potentially sway Trump’s decision.

During Trump’s first term in 2018, he imposed tariffs on Canadian steel and aluminum, to which Canada responded with its own retaliatory tariffs on U.S. products. Finance Minister Chrystia Freeland noted that Canada’s retaliation was successful in getting the tariffs on Canadian products lifted.

However, experts warn that a tit-for-tat tariff war would be more damaging for Canada than the U.S. Nevertheless, Canada could target U.S. agriculture products, such as dairy and field crops, which are politically sensitive in the U.S. Additionally, threatening tariffs on products connected to CEOs who have relationships with Trump, like iPhones or Tesla vehicles, could potentially influence Trump’s decision.

Trade expert Peter Clark emphasized the importance of focusing on counter leverage and targeting U.S. products that could influence key stakeholders to pressure Trump to reconsider his tariff threat. Tyler Meredith, a former economic advisor for Trudeau and Freeland, highlighted the strategic targeting of specific products in visible categories to make an impact.

Instead of using tariffs as sticks, Meredith suggests that Canada should focus on offering deals, such as striking agreements with U.S. refineries for the Trans Mountain Pipeline. This approach could be more appealing to Trump and potentially lead to a beneficial deal for both countries.

In conclusion, as Canada navigates the complexities of Trump’s tariff threats, strategic targeting of U.S. products and offering attractive deals could be key in finding a resolution that benefits both countries.