In Conversation with David Frum: How should Canada understand Trump's 25 percent tariff threat?

Summary

In the recent conversation with David Frum, the focus was on Donald Trump's announcement to impose a 25% tariff on all Canadian imports. This decision marks a significant shift, targeting Canada directly alongside Mexico. Frum discusses the motivations behind Trump's protectionist stance, emphasizing the underlying ideological and economic strategies. The conversation delves into the complexities of U.S.-Canada relations, the potential ramifications for NAFTA, and how Canadian policymakers might need to realign their strategies in light of these developments. The discussion also highlights the importance of maintaining balanced international trade and navigating the changing political landscape.

Highlights

• David Frum highlights Trump's disdain for international trade as long-standing. 🔥
• Trump's tariff threats are both legitimate and pretext for deeper issues. 🎯
• Frum emphasizes the risk of assuming tariffs are merely negotiation tactics. 🕵️
• Trade relations may require Canada to take unprecedented diplomatic steps. 🦶
• The socio-political implications of American tariffs go beyond economics. 🌎

Key Takeaways

• Trump's tariffs target Canada directly, challenging assumptions of the past. 🇨🇦
• Mexican and Canadian policies must align to counter U.S. protectionism. 🇲🇽🇨🇦
• Understanding Trump's ideological motives is crucial for future negotiations. 🤔
• Canadian politics may need a realignment due to these tariffs. 🧩
• The need for cooperation amidst potential U.S. and Mexico conflicts is crucial. 🤝

Overview

In this engaging discussion, David Frum unpacks the complexities behind Trump's announcement of a 25% tariff on Canadian imports. This move signals a shift in the U.S. approach, marking Canada and Mexico as primary targets. Trump’s historical aversion to international trade informs this decision, creating significant policy challenges for Canadian leaders who must now reassess their strategies and alliances in the wake of these threats.

Frum articulates how Trump’s tariffs are both a pretext and a real threat, stemming from his protectionist beliefs. The conversation explores why these tariffs are not merely a bargaining chip, but potentially indicative of a broader strategic move. Canadian policymakers, traditionally seen as more conciliatory, may need to adopt a more robust and perhaps confrontational stance in international relations to navigate this uncertain landscape.

Navigating these geopolitical tensions requires an urgent diplomatic pivot by Canada, where aligning closer with Mexico could be beneficial. Frum suggests that to safeguard free trade, Canada must potentially rethink its economic stance, adapt to new political realities, and consider more aggressive policy responses. In doing so, Canada might inadvertently transform its domestic economic policies and redefine its role on the international stage.

In Conversation with David Frum: How should Canada understand Trump's 25 percent tariff threat? Transcription

• 00:00 - 00:30 [Music] [Applause] [Music] welcome to in conversation with David from I'm your host Sean spear editor at large at the Hub I'm honored to be back in conversation with David for another installment of our bi-weekly video
• 00:30 - 01:00 podcast series on the key issues concerning Canadian policy and politics in today's conversation we'll cover Donald Trump's major announcement from earlier this week that one of his first acts as president will be impose 25% tariffs on all Canadian Imports including how Canadian policy makers ought to be thinking about the threat David thanks as always for joining us glad to be with you a lot of us anticipated that if Canada was to be affected by Trump's tariffs it would be likely as collateral damage or or an inadvertent consequence now we discover
• 01:00 - 01:30 that we're actually a primary target David what do you make of this announcement how are to how are we to understand the disproportionate focus on Canada yeah well this announcement is Canada and Mexico jointly and I I think it's still true that Mexico is front of Trump's mind because he did talk about fentel and migration which are real challenges to the United States on the southern border on the northern border it must be stressed the threat of illegal immigration is from the United States into Canada um people people who
• 01:30 - 02:00 are afraid of being rounded up and deported are going to be pressing up against the Canadian border and it's the United States that poses this challenge to Canada um but he the Canada and the United States sorry Canada and Mexico are jointly in the uh Target as as Target one with China strangely subordinate uh I think Canadian policy makers must take this extremely seriously you know Donald Trump has been on many sides of the abortion issue he's been on many sides of the immigration issue he's had all kinds of views on gay rights transgender since he began
• 02:00 - 02:30 exploring a presidential run in the 1980s he wanted to run for president in 1988 yes one constant in his political career has been his dislike and distrust of international trade he announced his 1988 run by buying a full page ad in the New York Times in 1987 denouncing trade with in those days Japan and South Korea were the targets but the same concept that he did he that International economics is zero sum there are winners there are losers there are no gains from trade there's no Mutual benefit that it
• 02:30 - 03:00 must be stopped that has been with him through his career because it reflects deep things in his own psychology he himself business is a predator he has never in if you lend to Donald Trump if you do business with Donald Trump you lose it's a mistake he wins you lose um and that's how he approaches every economic problem I I I want to take up your point about the basis of uh of these proposed tariffs in particular the claim that that Canada and Mexico are a major
• 03:00 - 03:30 source of of drugs and illegal migrants how do you interpret that claim is it a legitimate argument in search of some sort of policy response from Canada or is it a trumped up pretext to justify as you say what Trump's instinct is anyway look there there is both it is both pretext and legitimate um it's pretext because the basis for doing business and the vast complexity of relationships of North America between not uh which is a
• 03:30 - 04:00 trilateral relationship with Mexico as an equal Mexico is now by the way America's largest trade partner bigger than China bigger than Canada uh the way you manage this is by having separate files so when you are trying to deal with water cleanliness issues you don't muddy the waters uh by linking it to trade you say we have you know we negotiate on envir on the water cleanliness air call Quality um migration of people because all of these issues require cooperation Trump Trump's
• 04:00 - 04:30 view his hostile and predatory view of international relations means he doesn't understand or he doesn't accept that if either Mexico is a partner in the illegal migration problem or the problem is literally unsolvable an indifferent or hostile Mexico it doesn't uh the problem can't be dealt with Mexico has to be a partner and you don't get partners by bullying and threatening you get partners by working together um uh but it is a pretext because Trump I think wants to bust up uh NAFTA anyway
• 04:30 - 05:00 he he campaigned um one of the points that people make is well look this is his his own treaty that he's now weighing ining against but remember he campaigned in 2016 against NAFTA period And while um the usmca treaty in 2019 2020 made NAFTA more protectionist against the outside world his core grievance against NAFTA which is free trade with Canada and Mexico that's a feature of that agreement so I I think it's pretty clear he wants to bring it to an end and um while there's some doubt about
• 05:00 - 05:30 his exact power to impose these tariffs he can probably do it he can certainly withdraw from NAFTA if he wants to and that's something it looks like he's minded to do we we'll come to that point in a minute but I I want to dwell on the question of motivation and how Canadian policy makers should understand it uh from the day that Trump was elected up until the the moment that we're speaking there's been an underlying assumption in a lot of Canadian commentary that Trump's threat of tariffs are princip should be principally understood as a
• 05:30 - 06:00 bargaining chip in part of a a broader bilateral or trilateral negotiation to to what extent is that still the right operating assumption or as you've just set out is there something else perhaps much bigger going on here I want to draw people's attention to an important thread by Aon oul former leader of the conservative party who offered what what you call the traditional solution to a problem like u a blustery American president and um otou gave us listed a
• 06:00 - 06:30 series of concessions that Canada might make uh things that Canada can do to prove its Goodwill and this is a way that Canadians are very comfortable dealing with the United States um I think a lot of Canadians especially Canadian conservatives Capital C tend to assume in trade disput between Canada and the United States the United States is probably in the right Canada is trying to do something statist and interventionist um and uh um and the Americans are protesting against it and the access to the American Market is so important and the thing that the
• 06:30 - 07:00 Canadian negotiators is defending is inefficient and stupid uh so the way you you start looking for concessions you can make to the Americans Canadian conservatives want to raise defense spending anyway so why don't you repackage that as a concession to the Americans do what you want to do anyway and treated as a concession um that's the capital T traditionalist attitude uh if as you say Trump is serious about these tariffs that this is ideological for him if as our friend Rog Griffiths has been pointing out that Trump's
• 07:00 - 07:30 fiscal plans require new sources of revenue and tariffs could be a source of revenue for them then Canada is in a very Uncharted area and a kind of a world that Canada's not seen since before the second world war since the Great Depression since the really the Herbert Hoover days um and the path of concession is not going to work because these these tariffs are ideologically driven they're fiscally necessary uh they reflect a new American indifference to Continental and Global Leadership it
• 07:30 - 08:00 it's a much more radical problem and therefore you have to contemplate much more radical Solutions than pro-american Canadians and conservative Canadians have historically been comfortable with we'll come to what we might do about the threat understood in these terms in a minute but I just want to stay on the subject of of the underlying autological assumptions David you spent a lot of time in the world of American conservatism one thing that I've noticed in recent years is an increasing focus
• 08:00 - 08:30 on production um think of someone like oron Cass economic thinker with some influence in Trump circles who's argued that American economic policy is focused too much on individuals as consumers and not sufficiently as uh focused on production there's another line of argument that the US economy is over indexed for what you might describe as the intangible economy and not focus sufficiently on the goods producing part of the economy to what extent should we
• 08:30 - 09:00 understand these tariffs as an effort to redomicile production that has been distributed geographically across North America in the NAFTA era in other words there was a long there was an assumption that the that the focus here was to redomicile production in North America and it seems to me what we're discovering is that there's an interested redomicile production from North America into the United States yeah I I want to I'm gonna say something even um more disturbing
• 09:00 - 09:30 um and I I think the way to understand magga politics is it's Tim it's fundamentally sexual politics it's about the role of the man in the world the role of the man in the United States Social conservatives talk about redomicile production they're not interested in redomicile Film Production they're not interested in redomicile advertising and software uh they want to redomicile the kind of production that increases the scare the value of male labor to increase to uh re rebalance the
• 09:30 - 10:00 sexual economy of the United States make um you know to make back in the olden days it was always true that women were more likely to get formal schooling than men this idea when we point out that women are more likely to finish college well women used to be more likely to finish High School back in the days when most people only did High School the but what what happened in 1958 was the the girl would finish High School the Boy Might not or might just barely he'd get a unionized job she'd get secretarial or clerical job um or
• 10:00 - 10:30 retail job and he would earn more than her and so even if he was kind of no bargain um from an emotional point of view that a sexual bargain would take place because he could provide and she needed him and I think a lot of Mag is about restoring the scarcity value of male labor and de depressing the value of female labor to write the balance between the Sexes and get the kind of families that for highly ideological reasons they want now it has to be said the people in those families don't necessarily want this but it is wanted
• 10:30 - 11:00 for them um it's in my opinion a repressive and reactionary project and I say this as someone who's pretty socially conservative and yet it scares me um this is not the way I would want to proceed because it treats people like experimental objects rather than you know autonomous individuals with their own lives to lead but that that that's because otherwise why is manufacturing so valued I mean here's here's a question of manufacturing um if you go into a bill building and assemble Bread
• 11:00 - 11:30 on on an assembly line bread and burger patties and cheese and tomato and lettuce into a finished product is that a is that manufacturing yes or no and people would say no well why not why is that different from assembling ingots into a thing of a um and the answer is well because it's basically what we what we imagine when we are thinking we we imagining men on the assembly line earning a unionized wage that is made artificially High by artificial scarcities that will then
• 11:30 - 12:00 increase their value as Marriage Partners that's what JD Vance and or Cass are all about um and uh I mean it's I think as I say I think it's a an uneconomic project I think it's a reactionary project I think it's a repressive project but that's the project and we have to start there and meanwhile the the people who have this project do not care about inter American International Leadership they don't care about having a secure Frontier with Mexico in fact many of them talk openly about Waging War inside Mexico they want to go to war
• 12:00 - 12:30 with the cartels we say that's not a war against Mexico it's a it's just a war inside Mexico without the permission of the Mexican Government um and but it's it's a real war and a real war by the way where the cartels can strike back inside the United States so I'm I'm roaming around here a little bit but I think we just need to take I love Aon o what a good-natured person and what good advice his advice would be if you were dealing with um you know the first Reagan term when the dollar got high and they began doing some protection thing or the Nixon
• 12:30 - 13:00 Administration when again they did some exper but in all of those cases these were free trade administrations doing some protectionism to cope with a domestic political problem we have an ideologically committed protection socially reactionary Administration and you need to take that on board and develop some leverage against that problem not against the problems you used to have yeah what what a what a what Insight David I I I would say that I I think one of the resistance to understanding the threat in those terms
• 13:00 - 13:30 is that it leads to the inevitable conclusion that there's no simple way out if you accept that the tariffs aren't a bargaining chick but a chip but instead reflect an end in it on themselves it leaves us in the unable position of having to plan for the distinct possibility that were stuck with costly new barriers to the American Market without much recourse no it leads to an even more disturbing conclusion than that I'm sorry to say recourses no so it it means we have to realign how Canadian politics work works so in the the basic grammar
• 13:30 - 14:00 of Canadian politics dating back to Confederation was it those people who wanted a more free market approach to Canada internally tended to Advocate concessions to the United States um this goes back to you know the reciprocity election of 1911 this this goes back a long long long time and so the true free marketeers would say uh the Americans are allies and Friends their grievances are mostly pretty legitimate um and we
• 14:00 - 14:30 need to work with them and where their frictions Canada can allay them by since Canada is normally the more protectionist partner Canada can meet American objections by Canadian concessions which are going to be in the long term in the Canadian interest uh we are now in a world where the people who are marketeers have to get ready for a tougher approach to the United States and the people who are uh going to want a softer approach to the United States are going to be the less marketeers because they're going to welcome the opportunity for Canada to have more State Le economy um because that because
• 14:30 - 15:00 one of the things you do about American protectionism is make Canada more State L um and that that also is a pattern that goes way back in Canadian history so Canada needs to develop leverage across um it needs to precisely to do what the United States is falsely accusing it of which is to start finding linkages um and finding ways to damage without this is not cost free the damage will be to Canada too but in areas of
• 15:00 - 15:30 security in areas of counterterrorism in areas of drug proliferation now they Canada need say Americans take for granted can and of course they should um now it's awful to talk about this because what I keep comparing this to is this is like a couple that is having some marital difficulties beginning to consult the divorce divorce lawyers you start a process that it's very difficult to call back and you start contemplating things that once you've contemplated them are very difficult to stop thinking about and should never have been thought in the first place but uh in self-defense Canada is going to
• 15:30 - 16:00 have to contemplate some very different things from what it's contemplated in the past and Canadian politics domestic politics will need to look quite different in in return and one of the very specific dangers that Canadian conservatives face is uh it will be dangerous to be seen as the party of conciliation with the Americans if the Americans are trump it prompts the question what is your advice to Canadian policy makers what should they be doing or thinking and how for instance would you recommend they handle the Mexico
• 16:00 - 16:30 question which is looming large in Canadian politics in recent days well you and I have talked about this a couple of times and the first time we talked about it b i I'm going to confess I I did something I when I don't know the answer I restate the problem in fancier terms and I did that I sort of restated the problem but i' I've been thinking about it for two straight weeks is the question is should Canada separate its fate from Mexico's or should Canada join its fate to Mexico yes and and I recalled when we asked the question the first time how in the 1980s
• 16:30 - 17:00 many Canadians me among them had not wanted Mexico in the US Canada agreement because we wanted to go for fully free movement of capital fully free movement of people and that was impossible with Mexico as a partner that all became mood I think I thought my way to the position Canada has to link its fate to Mexico because as unlovely as the present Mexican Administration is as statist and authoritarian and and reactionary in its turn as it is if we're going to save free Continental
• 17:00 - 17:30 trade in in the context of open trade links to the rest of the world that is not a fortress North America but North America that trades in perfect Freedom internally and substantial Freedom externally and that could maybe even someday do things like have a negotiate a carbon treaty with the European Union and Britain and Japan um the Mexicans have to be made allies in that project because uh because otherwise the Americans play divide and conquer against the two and you get a fortress United States um so uh it's going to be difficult to do that diplomacy with
• 17:30 - 18:00 Mexico but one I I would I would urge partnership full partnership with Mexico to try to develop a common answer with the Mexicans against the Trump Administration um to save NAFTA as best we can save it to save Continental Commerce to save the free trade ideal um understanding the Mexicans to are very very imperfect Partners in this effort um and then but with them perhaps there's a way to play for time and remember and to get us to the point where Congress becomes less sympathetic to Trump remember it looks like Trump is
• 18:00 - 18:30 going to have the Republicans are going to have a four V vote majority in the House of Representatives of which two seats are empty yes so for until there are special elections called for the next months they have a two vote majority in the House of Representatives and half a dozen of the people in the Republican are just completely ungovernable so they have no majority so um there are some Trump is going to have difficulty getting things through the house
• 18:30 - 19:00 um and um now on tariffs unfortunately there are a number of Democrats who are tariff friendly or at least tarff curious so he may have more success building a bipartisan Coalition on tariffs than anything else um but it's going to be a little more difficult for him on much of his agenda than he thought or observers thought a week ago I I want to take up your point about the free trade ideal David I I must say that I felt more disillusioned in the past few days than I felt in long time perhaps as as long back as When Donald
• 19:00 - 19:30 Trump's first elected in 2016 and that's because one increasingly gets the sense that we're living through a a moment here in which deference to markets is increasingly being replaced by a kind of raw power political economy do do you think that's Hy hyperbole at this stage and either way how does a country like Canada respond if we are indeed entering an intellectual and political environment like that yeah
• 19:30 - 20:00 um I I I think we are entering that I think we're being pushed there by the uh by by the Trump Administration but obviously he's found a resonance inside American politics the free trade ideal is one that goes against many human instincts um for 10,000 years um if your neighbor had something you that you wanted for 100, for as long as we've been beings the most obvious and direct way was to go kill them and take it and most of human through most of human
• 20:00 - 20:30 society if your neighbor had something you wanted that was what you did and it became you know um facades of the Romans and the others put some facades of civilization and Corinthian columns on but that was basic your neighbor had something he wanted go kill him go take it um but along the way there have been voices said well what if you made something that your neighbor wanted and you freely exchange for it ah that would never work and and and we get this big test the big tests are in the great
• 20:30 - 21:00 world wars of the century where um Nazism Stu they are just basic the most Savage and murderous and technologically advanced idea your neighbor has something you want kill him and take it and out of that horror the many people around the world said let's this other idea it's so crazy but the the kill them and take it approach has really signally failed why don't we try to make something your neighbor wants and freely exchange and by God that did work work as improbable as it sounded and for for
• 21:00 - 21:30 50 years the world got richer and richer and richer what if you your neighbor had something you wanted you made something that he wanted and you swapped it back and forth and you were both better off and by the way there was no violence or you reduced violence you there was less killing um but that the Instinct Club him take it is always there and I'm going to say something a little I it's kind of my kids laugh at me at this I I think free trade is the most romantic
• 21:30 - 22:00 ideal there is um but uh one of the things that Trump Administration is done and the Trump era has done to many of us who have grown up on the right is forced us to accept we have to choose our priorities because a lot of things that I believe in no longer exist in one ideological package uh and you have to choose which is the most important thing um there is a story today or on the day that you and I record there's a story in the Wall Street Journal about the Trump
• 22:00 - 22:30 Administration making some effort to get rid of racial preferences in education which is something I would normally support um and and and by and by the way if they do it I will welcome that that will be one of the positive things to come out of the second Trump Administration but compared to keeping alive the free trade ideal it's less important and I mean there's just this uh except for actually literally preventing nuclear war maybe there's nothing more important than keeping alive the ideal of free exchange
• 22:30 - 23:00 of Comm commerce between nations because it's how you defend free free markets at home it's also how you secure peace and international cooperation abroad there's been a ton of sober reflection in our conversation David that our audience uh particularly those in Canadian policymaking circles need to hear if you'll permit me in in search of of optimism uh may I ask you to reflect today as we approach the the Thanksgiving weekend here in the United States you're in Brooklyn I'm speaking
• 23:00 - 23:30 to you from Manhattan uh may I ask for some thoughts uh uh As Americans across the country gather for for Thanksgiving yeah um I wrote an article for the Atlantic this is my most recent one which pointed out that there have been dark times before and there have been dark times in American history before um I'll say this is something in a Canadian context do you know this there's a civil war song called marching through Georgia um and one of the lyrics is Harrah Harrah um uh marching to the Sea we
• 23:30 - 24:00 bring the flag we carry the flag that sets you free for the first 75 years of the country's history the flag that it was not that was not a flag that set you free that was if you were in a slave ship on the Seas and you saw a ship with an American flag that meant you were being transported onward to slavery it was only if you saw a British flag that you might be set free um so there have been dark periods in American history before and um the period you know of the ne of the between 1935 in 1941 of the Neutrality Acts when America just said
• 24:00 - 24:30 you know we don't care if Hitler and Stalin divide the world and we could stop it but we won't um that was that's a period sort of like now um I do believe William Seward who is Secretary of State for under Abraham Lincoln said I believe we will discover enough public virtue to save the country I'm going to paraphrase my I don't remember the exact way we I believe we will discover enough public virtue to save the country we just may not have any left over and so this is going to be a very close run but
• 24:30 - 25:00 um maintaining the international free trade order maintaining collective security is maintaining American Global Leadership and Americans need to understand that the their Global Leadership has been trusted by a lot of people all over the world and it's made a better world it's made America richer and safer too but it's made a better world and Trump is proposing not just to abdicate from it but to wreck it uh that's a good place to wrap up David on behalf of the entire Hub community Happy Thanksgiving to you and your family and I look forward to catching up in a couple of weeks byebye