Canada Implements Retaliatory Tariffs on U.S. Goods Amid Trade Dispute
In the US–Canada Trade War, Tariffs Are the New Artillery
This is not a quarrel over dairy and hockey sticks, but a contest of virtù between two states arming themselves with tariffs instead of cannon.
The scene is simple enough: one president in Washington announces tariffs of up to 50% on Canadian goods – dairy, alcohol, hockey sticks, perfume – then denounces Canada’s exchange rate as “unacceptable” and threatens the sale of Bombardier jets. Ottawa answers at 12.01am with “dollar-for-dollar” duties of 15% to 50% on some $20bn of American imports, precisely aimed at sectors hit by US measures. Commentators call it a trade war. I call it something older: a struggle between two neighboring powers testing how far they can coerce each other without drawing blood. Change the weapons from galleys and pikes to percentages and you have the same game.
When I wrote in The Prince that one must look to the “effectual truth” of a matter, I meant exactly this. Men say they want free trade and friendly neighbors. In practice, they want advantage and security, and they pursue both with whatever arms are at hand. The American president is not moved by sermons on cooperation but by the survival incentives of his position: to appear strong, to protect industries that can punish him, to show his people that he makes others pay. The Canadian prime minister answers according to his own necessity: to prove that his state is no vassal, to shield his producers, to demonstrate that insults have a price. First they seek to maintain the state; only after, if there is room, they listen to moralists.
Notice also that both sides use institutions, not raids. These are not private embargoes or piracies but public tariffs supported by laws, revenue offices, and inspectors. In my Art of War I observed that no reform survives without arms; here the “arms” are schedules of duties, customs agents, and the threat of further retaliation from Washington spoken of by the US trade representative. A noble speech about diversification of trade, like that of the Canadian leader who warns the pivot away from the US “will come at a cost,” matters only because it is backed by concrete measures that hurt concrete firms. An unarmed economic policy is like an unarmed prophet: it dies at the first resistance.
Some will complain that both leaders escalate instead of compromising. They are right on the fact, wrong on the rule. The middle course is the most dangerous road in these affairs. Half-tariffs and timid protests would convince no one: domestic interests would feel betrayed, foreign rivals emboldened. By moving rapidly from 15% to 50% duties, and by threatening something as visible as aircraft sales, each side sends a lesson: we can and will inflict pain. In a world where, as I wrote in the Discourses on Livy, all human things are either rising or falling, the prince who rests on yesterday’s arrangements is already in decline. Better to risk overreaching than to teach your neighbor that you never strike.
Yet not everything lies in human hands. In The Prince I compared fortuna to a flooding river that devastates plains where no dykes have been raised. These tariffs are the dykes. Their designers hope that by acting now – before some greater economic storm – they will redirect the river to the other bank. But the river does not always obey. Higher duties on $20bn in goods can provoke inflation, bankrupt small traders, and embitter allies whose support will one day be needed in more serious contests. The leaders act with a certain virtù – boldness, clarity, willingness to bear costs – but fortuna will decide whether the long chain of reactions breaks more bones at home or abroad.
Here appearances weigh almost as much as the substance. Most citizens do not read tariff schedules; they see clips and slogans. A president firing off messages about “unacceptable” exchange rates and threatening Bombardier appears as the lion in my old example: roaring in public to terrify the wolves. The Canadian answer, carefully branded as “retaliatory” and “dollar-for-dollar,” allows its author to pose as the steady guardian of national dignity. Whether these postures match the underlying balances of trade is another matter. But men judge more with their eyes than with their hands; reputation is a kind of invisible tribute a ruler can spend, or squander.
The question that remains is not who is right, but who is prudent. If these measures lead to a durable recalibration – each side respecting the costs of injuring the other – then the severity will have been well used, wounding the few to secure the many. If, instead, they set off a cycle of reprisals that erodes both economies and poisons wider alliances, then what was called strength will reveal itself as weakness. As in Rome’s tumults, conflict itself is not the illness; the illness comes when conflict escapes the channels that institutions can bear. The victor of this trade war will be the one who knew when to stop shooting and start counting.
From the works cited
- The Prince — Virtù versus fortuna — the raging-river figure: preparation in fair weather is the whole difference between the drowned and the dry.
- Discourses on Livy — Managed conflict between the great and the people is the source of a free state's vigor — Rome's tumults produced its liberty. Never ask how to abolish conflict; ask whether its outlets are institutional or violent.
- The Art of War — No reform survives without arms of its own: ask of every noble plan, 'what are its arms?' Unarmed prophets fail; armed ones succeed.