In the last couple of days, President Trump has churned out hundreds of executive orders to the admiration of his narrow-minded cheerleaders’ group of sadistic white supremacists that surrounded him. The “unjustified U.S. tariffs,” as the Government of Canada rightly called it, provoked an unusual simultaneous response from Canada in a strange manner never experienced between two friendly countries, dating back ages. Trump’s insane tariffs of 25 percent on goods from Canada and 10 percent on energy are aimed at bolstering and negotiating border tightening with the drug cartels from Latin America and elsewhere who smuggled fentanyl into the U.S. via Canada. President Trump’s radical approach jolted and hurt Canada, which considered itself the closest ally of the U.S. in terms of geographical contiguity, shared history, similarity in social values, military cooperation, and diplomatic relations dating back more than a century.
Nothing expressed the readiness of Canada to bell the cat like the statement of the Honourable Dominic LeBlanc, Minister of Finance and Intergovernmental Affairs, that “Canada and the U.S. are more than just trading partners. We are highly interested in economies—and this has greatly benefitted both our countries for more than 150 years. We want to preserve this relationship, but in the face of the unjustified U.S. tariffs against Canadian goods, we are taking action to protect our economy, our workers, and our businesses. We will always stand for Canada.” Envisaging the ripple effect of a retaliatory approach to President Trump’s gargantuan tariffs imposition, Ngozi Okonjo-Iweala, director-general of the World Trade Organisation (WTO), has warned world leaders to embrace positive dialogue and avoid the “tit for tat” approach that might eventually affect and sink international trade to the abysmal level of the 1930 Great Depression occasioned by the Smoot-Hawley Tariff Act of 1930.
The Smoot-Hawley Act of 1930 was a United States law that raised tariffs on imported goods into the United States. The bill was co-sponsored by Senator Reed Smoot from Utah and House of Representatives member Willis C. Hawley representing Oregon. It was a notoriously protectionist trade policy that was appended by President Herbert Hoover, the 31st U.S. president. The act was regarded as one of the main reasons for depression in America. Like how President Trump targeted countries, both the U.S. allies and those he tagged as enemies, thinking that American sovereignty extended to another country, the act of 1930 raised tariffs on over 20,000 goods that were imported into the nation; it promoted U.S. industries and sheltered American workers. Similarly, other countries retaliated with their tariffs. The sudden chain reaction made American exports and imports fall by 67 percent during the Great Depression. It is believed that the act worsened the global economy, which lasted for almost ten years; hence, it was tagged the Great Depression.
As Ngozi Okonjo-Iweala posited, the retaliatory approach will hurt these two friendly countries that have come a long way in their complementary relationship. Documented evidence shows that Canada and Mexico accounted for a combined 29 percent of U.S. imports in 2023, with 13.6 percent from Canada and 15.4 percent from Mexico. Also, about 50 percent of Canada’s total fruits, nuts, and vegetable imports by value come from the U.S. Again, Canada is America’s biggest foreign supplier of crude oil. From January 2024 up to November of the same year, Canada shipped $90 billion worth of crude oil to the U.S. According to the United Nations COMTRADE database on international trade. The United States exports to Canada were US$293 billion in 2012; $301 billion in 2013; $312 billion in 2014; $281 billion in 2015; $267 billion in 2016; $282 billion in 2017; $300 billion; $292 billion in 2019; $255 billion; $307 billion in 2021; $355 billion in 2022; and $352.76 billion during 2023. Similarly, Canada’s exports to the U.S. were $338 billion in 2012; $346 billion in 2013; $364 billion in 2014; $314 billion in 2015; $296 billion in 2016; $319 billion in 2017; $337 billion in 2018; $336 billion in 2019; $284 billion in 2020; $378 billion in 2021; $459 billion in 2022; and $440 billion in 2023. Based on the above data, the balance of trade is in favour of Canada with a deficit on the part of the U.S. Looking at the U.S.’s 27.33 trillion GDP compared to Canada’s 2.14 trillion GDP, the deficit is an insignificant amount that does not warrant insane tariff imposition, which could set the pace for a global recession if this action and reaction are not moderated and critically reviewed.
“As Ngozi Okonjo-Iweala posited, the retaliatory approach will hurt these two friendly countries that have come a long way in their complementary relationship.”
As the tariff shenanigans unfolded, the U.S. also experienced a series of reactions that were triggered by Prime Minister Trudeau’s visceral resentment at the punitive response of similar tariffs levied against U.S. imported goods. President Trump and Prime Minister Trudeau had two conversations less than twenty-four hours after Trudeau’s salvo, and they tentatively halted the implementation of tariffs, giving Canada thirty days to strengthen and fortify security at her contiguous border with the United States, the longest in the world. The length of the border is 8,891 kilometres (5,525 miles).
Trudeau stated shortly after the meeting that Canada is carrying out the $1.3 billion border security plan that was initially announced in December. Included in this plan is “reinforcing the border with new choppers, technology, and personnel; enhanced coordination with our American partners; and increased resources to stop the flow of fentanyl,” according to Global News.
In the final analysis, the U.S. tariffs on Canadian goods brought about new tensions in the economic and political relations between the two countries. In addition, the costs, trade, and employment levels in both countries are likely to be affected. Canada’s countermeasures are complex, if not totally retarded. The matter is complicated further by the introduction of new trust issues into diplomacy, which can dampen or even destroy future collaboration, as well as push Canada to look for other countries to trade with. In most cases, the negative effects will come in the form of changes in people’s attitudes toward each other and a decrease in cultural interactions. In less than 72 hours after this trade tension, business moguls and investors on both sides are strategising, looking elsewhere to invest their money, knowing the unpredictability of this fastidious president. Shop and store owners in Canada more than ever are tacitly advertising and encouraging Canadians to patronise homemade products. In the long run, this could very well be a catalyst for the re-examination of the scope of economic and security collaboration, although peripheral associations like NORAD are bound to continue even with the aggravation.
Rotimi S. Bello, a public commentator, peace and conflict expert, and HR Advisor writes from Canada.
