The American decision to implement global tariffs has resulted in a variety of responses from the global community of trading nations. The actions implemented by the US government illustrate the American hegemony of exceptionalism; that is, the United States expects that the international community accept the implementation of American trading action without question—an exception that America and only America can implement with impunity.
The decision represents deleterious duties-tariffs, in spite of trade agreements and global trading regulatory framework. In a Canadian context, the duties and tariffs represent the ongoing challenges Canada is facing from American exceptionalism. It echoes throughout the country from economics, politics, social, cultural, and the military.
This attitude and reflection of the American exceptionalism is expressed succinctly by the US Ambassador. He is disappointed in Canadians’ lack of passion in the American-Canadian relationship. Further to this, when Canada, specifically, Ontario challenges the position of the American tariffs, the response is outrage followed by withdrawal from trade negotiations with Canada. All the while the Ambassador is expressing his disappointment with Canadians lack of passion and the outrage over the Ontario tariff ad, he does not accept any causal responsibility for the response by Canada and Canadians for the American protectionism, through duties-tariffs, and disrespect for Canadian sovereignty. If the situation was in reverse, what would his response be to Canadian assertions of protectionism and American sovereignty? How would the President, Congress, and the American people respond to the insinuation that the US should become the 11th province? Again, American exceptionalism.
Canadians are outraged at the actions, especially, the insinuation of Canada becoming the 51st state. It crosses the line of trade into the sphere of political sovereignty, cultural assimilation, social divergence, and national independence. This has led Canadians to demand “elbows up” from citizen purchasing power, business choice of product distribution and purchase, and government tactics in dealing with the United States. In other words, “elbows up” echoes the Canadian anthem: “Canada strong and free” where we need to be united in our resolve and committed to supporting the ideals of Canada and Canadians.
Currently, some provinces and Canadians are taking the direct approach to American actions by removing products from store shelves, choosing non-American made or produced goods, or consciously refusing to travel to the United States. All of these actions are direct action that is having a coalescing effect on Canadians and America businesses that rely on Canadians purchasing their products or travelling to their state.
We can see the impacts these direct actions are having on the United States. The US administration recognizes the impacts by their response to Canadian actions. On October 8th, during a virtual conference in Toronto of Canada-US participants, Commerce Secretary Lutnick clearly conveyed Trump's ongoing frustration that American products have been taken off the shelves of government-operated liquor stores in many provinces, including Ontario. He said there are "negatives" Canada needs to fix and, specifically, cited the bans on American liquor sales. Similarly to the Ambassadors comments, Lutnick takes no responsibility or ownership of why Canadians have taken this approach to American products. If Lutnick wants “negatives fixed”, the US Administration needs to begin by addressing the ongoing deleterious duties and tariffs imposed on Canadian goods imported into the United States. They need to redress their own “negatives” directed at Canada. To reiterate, this is, once again, American exceptionalism.
Although the first response of Canadians is to reciprocate with our own measures with direct and pernicious actions against the American initiatives, there are alternative approaches that are more subtle with long term implications to address the American hegemony and influence in Canada.
With American tariffs imposed around the world, there is a global opportunity for change and Canada must exercise its ability to pursue Canadian policy choices. If Canada intends on addressing the impacts American policy on Canadian trade, it is imperative to examine the longer-term issues of trade, specifically, the CUSMA (Canada-US-Mexico Agreement).
Based on the rhetoric and the tactics the American trade representatives are pursuing, a new comprehensive continental trade deal appears to be incongruent with how the negotiations will be conducted. As Lutnick has suggested, the president prefers bilateral agreements rather than multilateral ones. Historically, the United States preferred bilateral settlements and Canada focussed on multilateral agreements. It makes sense. Bilateral agreements favour the stronger trading partner whereas multilateral agreements allow smaller nations to have a greater degree of leverage.
Even though the negotiations with the Americans are based on bilateral discussions, Canda has the potential to pursue a strategy that can open up long-term solutions that lessen the dependency on US trade relations. Successful trade with the United States requires Canada to pursue trade from a position of economic strength, balanced with realistic expectations. It is imperative to explore and nurture other avenues of trade to shore up secure, stable, and predictable arrangements. American trade must be based on a matter of degree and integration in the future with a Canadian trading strategy.
Negotiating with the American administration requires a practicality and expectations of trade. Since the US does not accept concessions from perceived weak partners, it is quintessential for Canada to negotiate when there is a confidence in the economic strength of the Canadian economy. To achieve success with the Americans, Canada must maximize interprovincial trade, diversify trade globally, and integrate American trade within the overall Canadian trading strategy. Only then will Canada have the confidence to negotiate from a position of economic strength. It is important to recognize, however, that Canada cannot eliminate trade with America. While there are various reasons, the Americans would never accept full Canadian trade autonomy from American interests.
The current approach to American products provides the impetus to changing Canadian businesses attitude to trade, pressing them to explore trading relationships beyond the American market. It also opens up the prospective to build intra-Canadian trade within the country. A corollary attitude is individuals, businesses, and communities need to focus on deliberate choices in the products, services, and travel choices that can impact trade relations—and the building on a position of economic strength.
Realistic expectations of successful trade require a negotiating position grounded in economic strength. Canada’s economic strength comes in many forms that must be integrated into a trade strategy to maximize a shift from American interests to Canadian trade autonomy; that is, trade for Canada requires a focus and foundation based on domestic, global, and continental flows of goods and services. This trade is the foundation of an integrated economic solution: domestic trade, diversified global trade, and American trade. These solutions are built around the pursuit of direct action in conjunction with more subtle longer-term measures to ensure less reliance and more diversified trade.
One important but sometimes often overlooked facet and critical components in any trade negotiations for the Canada is the emphasis on the optics, messaging, and the direction of communication. Prime Minister Carney, Trade Ministers, and negotiators must be mindful and responsive to the Canadian people as a matter of pragmatism; that is, the style and messaging must be representative of what Canadians expect from a strong political negotiation. Anything less represents a weakness to the constituents that matter: the Canadian people.
An” elbows up” framework for Canadians and the Canadian government can take many forms but must be representative and reflect a position of economic strength. An integrated economic solutions approach based on domestic trade, diversified global trade, and continental trade are quintessential. If Canada is able to reposition the economy within a global trading environment that integrates the American trade as a component rather than the focus, the more long-term sustainability and security we will see for Canada.
