Tariffs, Trust, and the Limits of Commercial War

The scene, as I understand it, is this: the government of the United States has lately announced a ban upon the import of certain Canadian goods — some dairy, motorcycles, and most alcoholic drink — and the government of Canada has in turn laid retaliatory tariffs upon a large sum of American products, said to be $27.6 billion worth. Your Canadian prime minister, speaking at a cabinet retreat in Banff, calls the newest American move “relatively modest” beside past measures, and adds that his country is “always ready to sit down,” convinced there is a “mutually beneficial deal” consistent with the sovereignty and interests of both nations. Here is already much said of scale, of retaliation, and of interest, but little yet of trust.

When I wrote the Second Treatise of Government, I began by defining political power as the right to make laws, with penalties, only for the public good, and I added that men are naturally free, equal, and independent, under a law of nature that forbids harming another in his life, liberty, or possessions. In that original condition, which I called the state of nature, every man is at liberty to trade with every other, to carry his goods where he pleases, so long as he invades not his neighbour’s right and leaves “enough, and as good” for others. Civil government is set up that this liberty and property may be the more secure, not that men may be subjected to new, needless restraints. The question with these tariffs, therefore, is not whether a state may ever tax or regulate commerce, but whether these particular burdens can reasonably be judged an improvement upon that natural baseline for those subject to them.

First, I take tariffs to be, in effect, a species of tax upon the exchange of goods; they touch men’s property directly in the price and indirectly in their liberty to dispose of their labour and its fruits. Such power, being a part of the legislative trust, demands consent. This consent may be given, in large societies, by chosen representatives; I have never denied that. But the rule I pressed still holds: no tax is legitimate that cannot sincerely be said to aim at the safety and welfare of the whole, and not of some narrow part set up with privilege over the rest. If the American and Canadian measures are framed according to standing laws, debated by their respective legislatives, and applied by known rules, then they have at least the form of lawful power, not of mere command at pleasure. The remaining question is whether they are exercised for the public good, or only under that name.

Secondly, we must distinguish power used within law from prerogative, that is, from acting without or even against the letter of the rule upon a plea of necessity. In my Treatise I allowed some prerogative, so long as it is plainly directed to the public benefit and remains revocable when the people judge themselves ill-used. The present controversy bears some marks of that condition. Your prime minister speaks of focusing on “what we can control, building at home, diversifying abroad, and delivering for Canadians,” language that presents the Canadian tariffs as defensive measures for domestic welfare within a larger “trade war” not of their first choosing. At the same time he calls the latest American step “relatively modest” and signals constant readiness to negotiate. This sounds less like an attempt to establish a settled dominion over trade and more like the rough give-and-take of states disputing terms, under a continuing expectation of accommodation.

Yet power does not cease to be dangerous because it is wrapped in the language of modesty. It may be objected, and with some force, that such contests of tariff and counter-tariff often fall heaviest on those private persons who had least part in their contriving: farmers who cannot sell, workmen who lose their place, small merchants caught between governments that treat their goods as weapons. Have these individuals truly consented to bear such particular burdens for such uncertain gains? My answer, drawn from the same principles as before, is uneasy but plain. So long as the measures are general, known, and revocable by the ordinary course of representation; so long as they are sincerely intended to secure the long-term prosperity and independence of the whole; and so long as those who suffer may peaceably seek redress through their own legislative, this falls within the sad, ordinary lot of political society, where not every law can spare every man alike.

It would be otherwise if we saw here a long train of abuses, all tending one way: the steady concentration of commercial power in a few hands; the use of tariffs not as a means of bargaining, but as instruments to crush internal dissent or enrich favourites; the shutting up of negotiation in favour of sheer will; the refusal to hear complaints at home while speaking of national glory abroad. Then the name of trade policy would be a cloak for arbitrary power, and those subject to it might justly say their rulers had put themselves into a state of war with them. But the facts before me are thinner: a series of disputed measures, called modest by one side and met, on both, with talk of mutual benefit and continued engagement. This looks, as far as a stranger may judge, like power still acknowledged to be held on trust.

I do not say these tariffs are wise; prudence in trade depends on many particulars beyond my sight. I say only that, on the evidence given, they do not yet bear the marks of tyranny. They are exercises of political power that remain bounded by law, tempered by retaliation among equals, and, above all, open to revision by the people whose representatives imposed them. If those people grow persuaded that the burdens laid upon their commerce no longer serve the protection of their lives, liberties, and estates, they retain, under God, the right to alter their course. Until then, the true safeguard is not the absence of tariffs, but the constant remembrance that all such powers are but trusts, held conditionally, and never beyond recall.