What's really behind Donald Trump's tariff threats and '51st state' remarks about Canada?
Donald Trump's threat to impose huge tariffs on Canadian exports and undermine Prime Minister Justin Trudeau are key tactics in his negotiating strategy to extract better trade terms for the United States, people who have worked with him or watched him closely over the years say.
Trump is promising On Jan. 20, his first day in office, he imposed a 25 percent tariff on all goods entering the United States from Canada and Mexico unless the countries curb the flow of drugs and migrants across their borders.
President-elect since then to follow that threat, mocking Trudeau by calling him “the governor” and referring to Canada as the “51st state” in a series of social media posts.
Analysts say the approach echoes the trademark negotiating style that Trump has used for years in both business and the presidency.
Stephen Moore, who was Trump's economic adviser during his first term in the White House, says the president-elect aims to gain leverage to renegotiate the trilateral trade agreement between the US, Canada and Mexico.
“I think there's no question that that's what he's doing here,” Moore told CBC News.
“I've seen Trump from the beginning and in person during his presidency, and I've talked to him quite a bit about this,” said Moore, now a senior economist at the conservative Heritage Foundation.
“He's using the threat of tariffs to force countries to do things he believes are in America's national security and economic interests.”
The strategy was “pretty well developed” in the first half
Moore is though no fan rates From the perspective of their impact on the economy, he understands why Trump is threatening to impose them on Canada and Mexico.
“He wants to make sure that the trade deals that we have are fair to American workers and American companies,” he said. “It was a strategy that worked pretty well in the first term, and I hope it will in the second term as well.”
Trump used the one-two punch tariffs and taunts against Canada During the 2018 Canada-US-Mexico Agreement (CUSMA) negotiations. He slammed steel and aluminum tariffs, threatened tariffs on auto exports and called Trudeau “very dishonest and weak.”
Eugene B. Kogan, who teaches advanced negotiation skills at Harvard and has written about Trump's negotiating style says the president-elect has long used the tactic of undermining his competition as a way to gain leverage.
“Prime Minister Trudeau is in political trouble at home, and I think President-elect Trump feels the weakness,” Kogan said in an interview with CBC News. “He smells blood.”
He says Trump is “an incredibly rational, brutally ruthless analyst of human frailty and political frailty, and that's when he feels most of his leverage.”
He believes Trump is thinking “on an almost 24-hour basis” about how to exploit an opponent's vulnerabilities and turn them into opportunities.
Threatening to impose heavy tariffs on such a longtime trading partner even before taking office symbolizes what Kogan describes as Trump's “win-lose” approach to negotiations.
Power movement to establish leverage
“He is making a power move, guided by the desire to establish his leverage,” said Kogan. “The underlying message is, 'I will make it unpredictable for the other side, so that the other side will be under pressure to make concessions.'”
Trump's transition team did not respond to a request for comment.
There are a number of observers from Wall Street to Bay Street and Congress who view Trump's tariffs against Canada and Mexico as a way to gain leverage in negotiations over a three-way trade deal that is due to be extended through 2026.
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“This latest tariff threat effectively marks the beginning of negotiations,” international wealth management firm UBS Global said in a recent release. briefing note.
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“Trump's best and most likely use of tariffs is as a bargaining chip to get Canada to make concessions” when CUSMA is renegotiated. wrote TD Economist Mark Ercolao.
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“Now I see everything that Trump does on tariffs as a negotiating tool,” said Iowa Republican Senator Chuck Grassley. according to Politico.
Scott Besant, Trump's pick for Treasury Secretary, praised the president-elect for using tariffs as a “negotiating tool with our trading partners.” Fox News website immediately after the elections.
Mark Thiessen, former US President George W. Bush's chief speechwriter and a fellow at the American Enterprise Institute, said last week that Trump is serious about imposing tariffs on Canada and using them to negotiate.
“If they don't come and do what he wants, then he's going to put those tariffs on them,” Thiessen told Fox News. “I think he also knows that Justin Trudeau is incredibly weak.”
US President-elect Donald Trump has claimed on social media that he urged hockey icon Wayne Gretzky to run for prime minister during a Christmas visit, in the latest comments from Trump on Canadian politics, following Canada becoming the US's 51st state and “governor” Justin Trudeau. to the teasing words he had with him.
Trump on Christmas Day is installed that he urged Wayne Gretzky “to run for Prime Minister of Canada”. and that the hockey legend would “win easily.” He also considered buying Greenland and taking control Panama Canal.
Trump's comments on Canada, Mexico, Greenland and Panama are linked to a common thread of antagonism between Russia and China, an unnamed transition official told the Washington Post.
“This is not just a scandal, there is a coherent fabric in all of this,” The Post quoted the official as saying. “Trump knows what levers to pull.”
Even if there is a consensus that Trump's tactics when it comes to Canada are designed to gain leverage, the big question that remains unanswered is what his ultimate goal is.
Many doubt that a crackdown on fentanyl trafficking and illegal immigration (the reasons behind Trump's threat of tariffs) is all he wants.
That view was given some credence on Friday when two Trudeau cabinet ministers met with two of Trump's cabinet members in Florida to introduce them to Canada's plan to improve border security.
Secretary of State Melanie Jolie and Treasury Secretary Dominic LeBlanc traveled to Florida on Friday to discuss possible tariffs with representatives of the incoming Trump administration.
A senior Canadian government source told CBC's Kathy Simpson that Trump's fixation on the US trade deficit with Canada came up during the meeting.
Trump has repeatedly and inaccurately characterized the trade imbalance as a US subsidy to Canada.
Crude oil imports contribute to the US trade deficit
The trade deficit, estimated at about $75 billion in 2023, is largely driven by Canada's record high oil exports to its neighbor to the south.
The US imported more oil from Canada last year than from all other countries combined, it said statistics from US Energy Information Administration.
Moore says he believes Trump's goal is to make North America “the most geopolitically important region in the world when it comes to energy.”
In his 1987 The art of the dealTrump wrote: “Leverages. don't make deals without it.'' There is ample evidence that nearly 40 years later, he still follows that maxim.
