Canada’s retaliatory tariffs targeting $12.6 billion of US goods start on July 1. The duties are 25 percent on steel and 10 percent on everything else, in response to US levies on Canadian steel and aluminum. Canadian Prime Minister Justin Trudeau said that his country has had no choice but to announce reciprocal countermeasures. Canadian Foreign Minister Chrystia Freeland said that Ottawa is acting in sorrow, stressing that the country “will not escalate” and “will not back down”.
The EU and Mexico’s retaliatory tariffs against the US took effect in June. Canada’s newly-imposed tariffs on the US are about four times that of the EU, crushing Washington’s hope that other countries dare not strike a counterblow.
After the EU announced its reprisals, US President Donald Trump threatened to escalate a trade war by imposing a tariff on all US imports of EU-assembled cars. But this time, the White House hasn’t issued an immediate threat to Canada.
There’s no sign of a détente so far. The US announced earlier that an additional 25 percent tariff will take effect on July 6 on $34 billion of Chinese goods, China vowed to retaliate immediately. Those who were suspicious of China’s commitment to retaliatory measures are now convinced following Canada and the EU’s reprisals.
No country has launched excessive self-defense measures against Washington’s trade war so far. Not escalating and not backing down is a universal attitude of the international community. But this will disrupt Washington’s plans.
Unless Washington is able to intimidate other countries into accepting its conditions, the trade war will only lead to lose-lose results. Judging from the current situation where Washington is already at a disadvantageous position, such a trend has become increasingly inevitable.
While all parties concerned are trying not to link trade to politics, some people in the US and Canada have started to politicise the issue. White House trade adviser Peter Navarro lit into Mr Trudeau, saying that there’s a “special place in hell” for Mr Trudeau. Although Mr Navarro later apologised, this has already harmed US-Canada ties. Some Canadians are calling for a boycott of American goods. The trade war has hurt the feelings of European countries even more.
The trade war will bring the Trump administration more losses than gains. Given the ubiquity of retaliations, Washington is highly likely to suffer heavy losses. The trade war will only serve to exert negative pressure on international order and is a lousy example of handling international trade disputes.
If Mr Trump can take a step backward and resort to negotiations, it will help the international community recover losses both economically and politically. A full-fledged trade war will only bring more pain to the world. Ottawa is one of Washington’s closest allies, and its gap with the US is far wider that that between Europe and the US. Canada’s retaliations against the US suggest that the White House has gone too far this time. Washington has been mired in several wars in history, and shouldn’t be mired in a trade war today.