The US/Canada Trade War

Image source: Fraser Institute

John Clarke

Toronto

8-23-26

 

I would like to offer some basic considerations that I think point in the direction of an independent working-class perspective on the present situation.

 

1. Trump has initiated this conflict in his usual bellicose and erratic fashion but the turn to protectionism isn’t simply the product of his administration’s quirkiness. The US is in decline as a world power and the resort to tariff measures is a questionable strategy to contain that decline. As such, the US is no longer focused on leading a global world order but is more interested in immediate self-interest. As part of this, it wants more favourable trading terms from its former allies and junior partners like Canada.

 

2. Canadian capitalism is in a particularly vulnerable situation, given the level of economic integration with the US and the volume of trade with it. The US has a major stake in trade with Canada but not nearly to the same degree. In a trade war with the greater power to the south, the balance of forces is not on the Canadian side and Carney and his allies know that very well.

 

3. The changed trading relationship creates an existential crisis for Canadian capitalism and the Carney government and its provincial counterparts, taking their lead from the main business lobby groups, have two ways to respond. They can try to alleviate the impact by negotiating terms with the US that are less punishing than they might otherwise be, although it is unrealistic to imagine they will be anything but harsh. On the other hand, they can try and diversify trade as much as possible so as to compensate for the impact of US protectionism. 

At present, Carney is trying a dose of defiance in the hope of blunting US demands somewhat but open trade hostilities will be very damaging and diversified trade can’t be achieved on anything like an adequate scale. A lowering of elbows is to be expected in the not too distant future.

 

4. Harsher trading terms will cut into Canadian profits, while diversified trade means an acute need to increase ‘competitiveness.’ Either way, the strategy of Carney and the capitalist class he represents is to impose the burden on workers and communities so as to maximize profitability and weather the storm at our expense.

 

The drive to preserve profits is well underway and we can see it unfolding at the federal, 

provincial and municipal level. Austerity, deregulation, attacks on public sector workers, increased military spending, destructive fossil fuel projects, a law-and-order crackdown, an assault on immigrants and an unprecedented effort to undermine Indigenous rights. These are the manifestations of this effort to impose the trade war burden on workers and communities.

 

5. We may place demands on the federal government with regard to trade negotiations, insisting that certain measures should be put on the table while others should not. What is absolutely essential, however, is to reject the notion that there is a ‘national interest’ to be defended and that we are ‘all in this together.’ We can’t become supporters or advisers in Carney’s ‘team.’ We mustn’t form an alliance with ‘our’ exploiters but we have to focus our attention on the brutal attacks we face in response to the trade war. We have to appreciate that Carney and those he answers to are our enemies, while workers and communities the US that are fighting back against Trump are our comrades in the struggle.

 

The trade war is becoming a class war and our side needs to engage in that struggle with the same determination that Carney and his allies are already displaying in an unmistakable fashion.