This op-ed was originally published in Real Clear Markets.
Great wars often begin over what seem like small stakes. So began—and so proceeds—the American trade war with Canada. Before the guns of February sounded in 2025, commencing President Donald Trump’s protectionist campaign against American trading partners worldwide and a group of islands inhabited exclusively by penguins, more than 99 percent of cross-border trade between the two (mostly) English-speaking nations of North America went on duty-free. In the aftermath of Trump’s dredging up this summer of a heretofore unused section of the Smoot-Hawley Act and the Canucks’ threatened retaliations, set to go into effect September 8, “the latest American tariffs cover about 5% of the goods the US imported from Canada last year, while Canada’s tariffs cover about 6% of the goods the US exported to Canada” (per CNN). This, as the Cato Institute’s Scott Lincicome notes, is not, economically speaking, a catastrophic conflict. And yet, peace is unlikely soon to be concluded, despite the geopolitical drama-mongering of government officials and breathless coverage in the press.
Last month, Trump announced a new trade deal, an announcement followed closely by an implosion of negotiations. Each side, naturally, blames the other, and each offers a different account of events. But when the demands of the two nations are tallied, when the motivations that drive each one are understood, it is the Trump administration that seems to be at fault.
Sure, the Canadians have insisted upon maintaining foolish duties on poultry, eggs, and, especially, dairy products. But they abided faithfully by the United States-Mexico-Canada Agreement (USMCA), the successor of the North American Free Trade Agreement (NAFTA), which Trump, its negotiator, dubbed “the best and most important trade deal ever made by the USA.” Trade across the United States’ northern border was, on the whole, free. The terms of that deal are intolerable to the second Trump administration, and new protectionist measures were announced to combat the menace of the Great White North not a fortnight after the 47th president reassumed office. The campaign, unprovoked, has waxed and waned in the 19 months since, but it has not ceased.
Two exhibitions of the President’s protectionist fundamentalism, which is the cause of the present contention, appear in an illuminating report in The New York Times. “The United States wanted Canada to apply U.S. tariffs to other countries, particularly when it came to steel, now and in the future: If the United States changed policy and placed higher tariffs on certain goods from a third country, Canada would need to do the same, even if it already had a trade agreement in place, a Canadian official said,” the paper reports. That is, America demanded that Canada—which remains, it must be remembered, a sovereign nation—allow it to write Canadian trade policy. The Trump administration’s reasons for desiring such a policy are not wholly frivolous, but they exist on the plane of trade policy, and they will assuredly fail to move the Carney administration in the latter’s defense of Canadian sovereignty.
Indeed, Prime Minister Mark Carney has scant motive to concede much to Trump—and not only for reasons of public opinion. “Our government understood,” he said, that the United States’ “signature was written in pencil.” Trump’s tariff policy has been, in a word, mercurial (e.g., the President once raised rates over a television advertisement noting Ronald Reagan’s distaste for protectionism). And according to accounts provided to The Times, “the United States maintained that it would retain the power to change tariff policy against Canada at any time, irrespective of the agreement.” Trump the negotiator wishes to maintain freedom of action, total flexibility, and a measure of unpredictability—the ability to impose new duties at will, safe from retaliation. But his negotiating partners cannot, of course, indulge the President by codifying such latitude in a trade agreement, which would transform any “final” deal into a transitory statement of intent, subject to American whims.
The Canadians, for all their eccentricities and foibles, will agree to terms to re-establish (relatively) free trade. They do not seem to have departed from the policies of NAFTA and the USMCA. Trump, however, has brought about a revolution in American trade policy and diplomacy and seeks to foist his innovations on Canada.
“I don’t want Canadian cars, I don’t want Canadian parts, I don’t want Canadian anything,” he posted on Truth Social. The Americans who in 2025 imported $382 billion worth of Canadian goods presumably hold different views. These will be the civilian casualties of Trump’s trade war, which might be ended if the Trump administration would simply ease up. This is, to borrow a phrase from the political scientists, an American trade war of choice.
David B. McGarry is the research director at the Taxpayers Protection Alliance.