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ACCORDING TO LIZ - Before Tuesday’s meeting between the president and Canada’s Prime Minister Mark Carney, the former promised “I think they're going to walk away very happy.”
But Carney walked away empty-handed. Again.
Promises, promises.
Furthermore, as Carney attempted to soothe the unpredictable beast with pleasantries, commending Trump on his achievement during his first months in office, the Social Gaffer leapt in to add: “The merger of Canada and the United States.”
Then claimed he was “kidding.”
After the initial round of diplomatic banter, focus turned to the key question of the day.
Nope.
Not the Truth Social “leak” Wednesday night that Israel and Hamas had agreed to exchange all remaining Israeli hostages for Palestinian prisoners, that Israeli troops will pull back, and that humanitarian aid will again flow into Gaza.
But tariffs. Again.
Those that Trump has threatened to impose or imposed at fluctuating levels against steel and aluminum entering the United States from Canada. Also, dairy and lumber but, especially, the auto manufacturing industry.
It has become clear from his demeanor and outbursts, and the plethora of alternate truths that he spews, that for some reason this is very personal for the president. In many ways far more so than with countries in Europe and Asia.
Why? Only his therapist knows for sure. Well, maybe.
It is also clear that the country on the northern border, which Trump sees as a projection of his empire, now has its elbows up – a Canuck hockey expression not to back down – and will not kowtow to the King-of-the-South whose constant comments about their great nation becoming the 51st state are demeaning and hurtful. Who wants an overlord like that?
Certainly not one that persistently derides the importance of his country's No. 1 trading partner, jibing in January that “We don't need anything they have” seeming oblivious to the fact that in 2023 the U.S. Census Bureau put Canadian exports to the States at nearly US$418.6 billion.
So... from where is His Lordship going to procure over $400 billion worth of goods?
What is not so clear is how much hurt all those glorious tariffs Trump is trumpeting, tariffs that are funding cutbacks for the rich and the richer, will cost the American consumer. Big time.
Tariffs have to be paid by the importer so, to stay in business, they pass them along on to American businesses and which then pass them onto consumers, raising prices every step of the way.
And, as demand on existing US suppliers increases due to cost differentials, domestic prices will rise as well.
Trump incessantly whined about Canada being too close to U.S. border impinging on “his” constitutional right to car manufacturing.
“We want Canada to do great. But you know, there’s a point at which we also want the same business.”
“If you look at Canada, Canada has a very big car industry. They stole it from us”.
“If we don’t make a deal with Canada, we’re going to put a big tariff on cars. Could be a 50 or 100 per cent because we don’t want their cars. We want to make the cars in Detroit.”
It’s that anger that blinds him to the reality of the situation.
And in this case, it wasn’t stolen. President Lyndon Baines Johnson signed the Auto Pact agreement with Canadian Prime Minister Lester Pearson in 1965, removing tariffs on cars and car parts so they could freely move back and forth between the two countries benefiting industry on both sides of the border, and the automobile manufacturing sector and its supply chains have been deeply integrated ever since.
The Auto Pact’s successor was 1994’s NAFTA (the North American Free Trade Agreement) which extended free trade to all manufacturing which was updated and signed into law by Trump in January of 2020 as CUSMA (the Canada-United States-Mexico Agreement).
In sixty years, billions of dollars’ worth of facilities, infrastructure and contracts that have been developed between American and Canadian car manufacturers and parts suppliers.
And Trump is now intent on tearing this all down.
There are pretty prohibitive costs involved: in physically shutting down plants and negotiating cancellations of existing contracts, in paying out the people fired, in the loss of time (which is money) and product involved in shifting manufacturing across the border.
Closure costs would come to US$500 million if not significantly more, per facility. Currently Canada has fourteen car manufacturing plants.
Despite the Trumpeter’s glowing rationalizations, tariffs do NOT incentivize commercial construction in the United States. As currently applied, they create a fluctuating economic environment that makes investment capital for expensive domestic infrastructure projects hard to come by.
To rebuild the Canadian auto manufacturing sector from scratch in the United States, with its higher labor costs, lack of investor interest in an increasingly uncertain business climate pushing interest rates higher coupled with a distant return horizon, would cost billions more.
Based on Volkswagen’s 2023 projected cost of $2 billion to build a new plant in South Carolina to replace those fourteen Canadian facilities would cost $28 billion. Probably more since costs are going up so quickly with the new tariffs.
On top of vehicle construction, there are 1,400 parts and tools manufacturers in Canada. And the 156 Canadian-owned parts and tools assembly companies located in 18 states employ 50,000 Americans.
While Trump’s tariffs virtually assure catastrophic collapse of Canadian auto industry companies, at the same time many in the United States are also likely to fail during what will probably be a decade long disruption.
Does the American taxpayer really want to subsidize all these costs on the whim of a petty tyrant, increasingly untethered from reality?
Do the American auto giants want funds earmarked for upgrades to their factories diverted to underwrite the construction of plants that will create a much more expensive supply chain and increase competition in an already fragile marketplace? With billions expended on investing in electric vehicles and increasing fuel efficiency now having to be written off through the erratic changes to their business models wrought by the not-so-beautiful budget?
Further economic threats from a late September ramble in Georgia shows his ego extends beyond Canada, and beyond common sense:
“I want German car companies to become American car companies. I want them to build their plants here... Here is the deal that I will be offering to every major company and manufacturer on Earth — I will give you the lowest taxes, the lowest energy costs, the lowest regulatory burden. And free access to the best and biggest market on the planet”.
What market is that if only the millionaires have any disposable income?
“But only if you make your product here in America. It all goes away if you don’t make your product here. And hire American workers for the job. If you don’t make your product here, then you will have to pay a tariff, a very substantial tariff.”
Carney has already made too many concessions to Trump, kowtowing in the wake of the famous Trudeau-Trump acrimony. Increased border surveillance for the non-existent fentanyl flood, boosted NATO commitments, and the removal of the promised digital services taxes that would affect only global conglomerates such as Google, Amazon, Uber and Meta.
To gain the latter concession, Trump acted the spoiled child and terminated ongoing trade talks with Canada and threatened more and higher tariffs.
Trump just keeps asking for more. A glutton who can never be satisfied until his opponents are rolling on the ground crying for mercy.
He does not seem to get it that Canadians are all in on elbows-up, that opposition parties north of the border are gaining traction since the Prime Minister is not fulfilling his campaign vow to fight FOR Canadian jobs and economy, and that further pressure combined with the removal of local green energy incentives in the United States will force energy costs higher, really catching the eyes of most Americans.
Ultimately, Trump’s nonstop aggressive attitude towards our northern neighbor will continue to harm the Canadian economy.
But it will hurt American consumers and American businesses far more.
(Liz Amsden is a former Angeleno now living in Vermont and a regular CityWatch contributor. She writes on issues she’s passionate about, including social justice, government accountability, and community empowerment. Liz brings a sharp, activist voice to her commentary and continues to engage with Los Angeles civic affairs from afar. She can be reached at [email protected].)
