Canada ‘has to lose in this conflict,’ Frum says, urges Canada to avoid retaliatory tariffs against U.S.
CTV Question Period and Power Play host Vassy Kapelos interviewed The Atlantic columnist David Frum at the Forest Products Association of Canada policy conference Oct. 22. / MEANS & WAYS PHOTO
Canada’s best response to mounting U.S. trade pressure is to avoid retaliatory tariffs and look for smarter forms of leverage, political commentator and former White House speechwriter David Frum told a Canadian audience.
“Tariffs are ways that countries hurt themselves,” Frum said. “Canada is the smaller economy, the more vulnerable economy, it has to lose in this conflict. My general advice is pushing back and finding ways to push back that are not counter tariffs because that is a losing game.”
Retaliatory duties would hurt Canadian producers and consumers more than their intended targets, Frum said during the Forest Products Association of Canada’s policy conference in Ottawa, Oct. 22. “The Americans are right now picking up a big mallet and hitting the American consumer in the head,” he said. “The question for the Canadians is, how big a mallet should I use to hit Canadians in retaliation?”
Instead, Frum advised Canada to look for measures that apply pressure “on difficult-to-replace industrial products” such as nickel, potash and hydroelectricity, and to continue encouraging top U.S. academics and innovators to relocate north.
Frum said the foundations of Canada’s economic relationship with the United States have eroded since Donald Trump’s return to office, noting that Trump has ignored previously signed trade deals, including CUSMA, which he negotiated in his first term. “Once one party says, ‘I have a right to ignore sections of a treaty that I don’t like,’ then… no one is bound by it,” Frum said.
He added that Canada’s vulnerabilities make it an easy target. “Canada is a very vulnerable target,” Frum said. “He gets a lot of pleasure out of that because it’s a pretty risk-free exercise of power.”
Frum said Trump’s worldview rejects the basic premise of reciprocal benefit. “He does not believe in mutual benefit… that’s why he can’t accept the idea of free trade,” Frum said. “If you believe in markets, if you believe in trade, you believe in mutual benefit, but Donald Trump’s whole theory is life is about I win you lose, every deal has a winner and a loser.”
Frum expressed skepticism about Canada’s prospects for negotiating a new trade framework with Washington and said the longer Canada can wait to sign something the better Canada will be, despite the short-term economic pains. “You don’t want to be in a hurry,” he said. “You’re going to get a much better deal when this administration’s position is weaker, when Congressmen will be saying, ‘The United States needs to stand by its signature. We cannot be a faithless partner anymore, That’s shameful. It’s the leading nation in the world. It’s the centre of all these trade and diplomatic and strategic laws. Its word has to be good and under Donald Trump, its word is not good.’”
Canadians, businesses and the government should prepare for a drawn-out and unpredictable period in North American trade, he said. “You can’t get past the original problem,” Frum said. “How to sign a deal if people say we’re not bound by deals? You have to be able to trust the signature before you do the signing.”
