11 Devastating Consequences Of Trump's Trade War With Canada
The relationship between Canada and the United States, once the most reliable alliance in the world, is now volatile.
American president Donald Trump's threats to cripple the Canadian economy, disdain for the Canadian people, and mockery of Canadian prime minister Justin Trudeau have produced not only political estragnement, but also cultural division between the two countries.
One topic that has dominated the public discouse in Canada is Trump's self-described trade war. While the conflict has stimulated a wave of Canadian national unity, it still threatens to alter the Canadian economic and social landscape.
Below is a list of the eleven most devastating consequence of this trade war. Some of these are already underway, some of these loom in the near future, while others represent worst-case scenarios. With such an unpredictable American administration, there's no telling when these consequences might erupt in Canada.
The U.S. views Canada as a "national security threat"
This has already happened. The Trump administration has labelled Canada as a national security threat on multiple fronts. First, Trump called imports of steel from Canada a danger to the integrity of the American military and the stability of American manufacturers. Then, after the Trudeau government retaliated with tariffs of its own, the U.S. filed an official complaint to the World Trade Organization (WTO) against Canada in the interest of "national security."
If the mindset of the Trump administration is that Canada is a foreign threat to the United States, that not only jeopardizes Canada-U.S. relations, but also creates potential for a quick escalation of this conflict from trade to other sectors.
A spike in the price of food
This, too, is already underway. American tariffs and Canadian retaliatory tariffs are causing the price of common grocery items like coffee, mayonnaise, and toilet paper to spike. So far price increases are confined to rather unessential food items. But if that changes, the food security of Canada would be in danger.
Major job losses
Economists warn of major job losses if Trump follows through with his promised tariffs on Canadian auto parts. The threat of those tariffs became much more real this week after a convention of Canadian officials and American car manufacturers met in Washington to speak against Trump's plans. Auto-part manufacturing dominates a huge part of the economy in southern Ontario, which borders American car manufacturing hubs in Michigan. Levies on Canadian parts would force companies north of the border to lay off many of their workers.
The tariffs on auto parts could quickly lead to a recession, a shrinking of the economy, in Ontario. The broader Canadian economy would stall for a while before possibly also succumbing to recession if nothing is done to restore Ontario manufacturers.
NORAD in danger
The North American Aerospace Defense Command (NORAD) is an agreement by which the United States and Canada share the responsibility of defending the continent. Under NORAD, the American and Canadian air force intelligence and protocols are effectively integrated.
If the U.S. trade war with Canada continues to escalate at its present rate, one or both countries could threaten to pull out of the treaty. That could put the whole continent in danger, especially given the rise of a nuclear-capable North Korea and more aggressive Russia.
More car theft
That's according to the National Post. A decrease in the number of cars that American companies produce will lead to, believe it or not, a shortage in the North American supply. That shortage combined with general frustration and anger at job losses and a slowing economy will lead to a rise in thefts.
Trump is now targetting uranium imports to the United States, almost 25% of which come from Canada. This is another point of "national security," according to the Trump administration. Such tariffs would harm American energy companies and consumers while producing a surplus of the radioactive element in Canada.
Don't worry, because of nuclear nonproliferation treaties, the uranium could only be used to produce energy. But uranium tariffs would greatly harm the huge mining industry in Canada, leading to layoffs.
Higher electricity bills
There's a possibility that Trump could cause electricity bills in eastern Canada to go up. Because Hydro Québec's ten year plan includes a call for an increase in revenue by selling energy to American states in New England, the company will have to rely on U.S. federal permission to build appropriate infrastructure. The Trump administration, however, is nortiously antagonistic towards clean energy. If Hydro can't boost revenue by selling to American customers, the company may have to find another way to make more money, like increasing energy costs in Canada.
Aggressive American border policy
This is already a reality. American border agents can seize Canadians' cellphones without a warrant and has even begun issuing lifetime bans to Canadians that have had contact with the marijuana industry. The trade war will not directly affect the situation at the border, but rising tensions will certainly lead to stand offs between angry Canadians and emboldened border security agents. In the meantime, check out this list of twelve things all Canadian should do before crossing the U.S. border.
The U.S. undermines Canadian sovereignty
Unfortunately, this has already begun. American border agents are executing raids in Canadian-claimed waters. The trade war will only exacerbate the situation. Canada is economically reliant on the United States. Even the threat of American tariffs will force Canadian officials to bow to Trump's demands and agenda.
This is the worst-case scenario. That's why it's at the bottom of this list. Trump is already skeptical of NATO and has repeatedly berated NATO allies like Canada, the United Kingdom, and Germany.
But Canada's relationship to the United States is even closer than that of other NATO countries. The alliance, bolstered by NORAD, makes impossible any foreign threat against Canada. If the Trump trade war leads to a deterioration of North American military and intelligence cooperation, Canada is in trouble.