It's only unsound if you are taking a globalist rules-based international order perspective. My perspective is that globalization and the rules-based international order is dead and we are back to an era of great power competition. I've argued such a point many times in the past.
My perspective is grounded in a realist critique of modern geopolitics. The post-Cold War illusion of a globalized, rules-based international order is officially dead and has been replaced by a ruthless era of great power competition where economic tools are weaponized for national survival. Viewing the Trump Administration's aggressive tariffs and structural protectionism as merely "trade stupid" ignores this systemic shift.
In the multipolar world we now find ourselves living in, general tariffs are no longer deployed for pure economic efficiency, but rather as weapons of economic nationalism meant to secure supply chains, decouple from adversaries like China, and reassert a modernized Monroe Doctrine over North America.
Expecting Washington to prioritize abstract notions of Canadian trade sovereignty over its own domestic security is a luxury of a bygone era. The United States is tipping its hand because hegemony, not international law, is the organizing principle of the future.
My principal argument is that for Canada to survive this permanent American trajectory, it must abandon its reliance on legacy treaties and legalistic grievances about U.S. hypocrisy. Crying foul at the UN or invoking the spirit of free trade will not stop a superpower experiencing a Manifest Destiny hangover. Instead, Canada must pivot to a transaction-based foreign policy, leveraging the tangible assets the U.S. desperately needs to fuel its fortress-style economy.
By ruthlessly trading on our vast reserves of critical minerals, continental energy security, and joint Arctic defense infrastructure, Canada can carve out a position of indispensable utility. We cannot shame the Americans into respecting our sovereignty, but we can make it in their absolute self-interest to secure a strong, integrated northern partner rather than a broken satellite state.
You misunderstand me. I’m not suggesting the tariffs are economically unsound out of some pink and fuzzy rules based world view. If you think I’m still here hanging my hat on the rules based international order and a Canada-US relationship based on principle, you’ve not been paying attention to my posts for the past year. We need to meet ruthless transactional with ruthless transactional. I’m not sure what ‘legacy treaty’ you think we’re foolishly relying on in our trade with the U.S., unless you mean Trump’s own CUSMA from just a decade ago? If there’s something else you think we as a country are inappropriately nostalgic about there, let me know. It’s sadly true though that even his own signed and bragged-on agreements are now so easy to doubt the reliability of. “Signed in pencil” indeed. Even in a transactional, competitive world, agreed upon deals still need to mean what they say they mean, or transactions themselves break down. I’ve said many times now that business can deal with and price around a
bad rule set as long as the rules are
reliably and predictable enforced. It’s that wild unreliability and unpredictability that is hurting America’s full faith and credit.
Generalized tariffs are stupid because they are stupid. Liberalized trade allows countries to make the most out of their comparative and absolute advantages, and it allows their businesses and consumers to get the most out of their buck. Generalized tariffs add needless friction and cost, and harm your own industries’ competitiveness in world markets. I suspect from our past discussions that you have a somewhat more than passing familiarity with the economic advantages of liberalized cross border trade, and on the straight market economics of this I suspect I’m preaching to the choir.
I understand your reasoning about the power dynamics, and yes,
specific tariffs can indeed operate to distort market pricing and, through these inefficient externalities, incentivize growth of domestic industries that would not otherwise be competitive. “We want to have this industry on-shore; we can’t do it as well as the other guy, so we’ll artificially price the other guy out by charging our importers a tax so our own producers have a nice bubble to work in”. If the industry is important enough to have sovereign control over, and if you’re willing to eat above market pricing, fair enough.
So I mean, sure, specific tariffs
can protect individual industries or sectors that are deemed to be of national importance. The stupidity of the U.S. position though is in how hamfistedly they’ve applied tariffs as far across the board as existing trade agreements allow, and sometimes even despite those agreements. They’re just taxing the shit out of their own people on a multitude of goods and services that don’t merit such protections.
Ironically, by eroding purchasing power both immediately through price hikes at the docks, and through the resulting inflationary pressure, they destroy some of the very demand these now sheltered domestic industries increasingly rely on. And of course they’re also inviting reciprocal and retaliatory measures that hurt their own industries that
do enjoy comparative advantage and will now face less access to external markets.
I understand the concepts of economic nationalism well. They’re just going about it in an incredibly dumb way. Most of what they need to have economic security they could
easily just buy from reliable partners if they decide to pay enough to make it worth it for producers. The ones in the administration down there who still have brain cells to rub together are still quietly pushing exactly this approach on things like critical mineral development in partnership with our businesses. But now they’re having to do it sailing upwind against policy Choices that cause the rest of us not to trust them or to want to rely on them.
America could very easily have come out with a strong and coherent policy on certain key sectors, clearly said they were going to use restrictive trade practices to protect and stimulate those sectors, and that otherwise they remain open for business to let their companies buy and sell as freely as they choose. It would have pissed some people and some industries off, but it would have been articulable and reasonable, so long as it involved consciously accepting the inherent inefficiencies of being an economic island in a given sector. But instead they just blindly tariffed everyone including an island full of penguins, and only when things started to bite did they reassess some of their initial rules that had had extremely predictable detrimental impacts on their own people. Maybe that’s when Trump learned how ‘dumb’ is spelled?
Absolutely agreed that we must aggressively leverage our own advantages and reassert that if they want to work with us, it must be a just partnership. We need to heavily build out export infrastructure and continue making advantageous trade deals with other countries and trading blocs, and then the Americans can enjoy competing with other potential purchasers. I remain happy to sell them stuff, but we have a lot of stuff everybody wants, not just them. Our government seems to grasp the importance of policy that makes it easier to sell into the broader world market. We need to keep acting aggressively on that. More trade deals, expanded ports, and expanded lateral infrastructure east to west across Canada, as well as north to where there’s more good stuff in the ground.