Oy, Canada Tariffs

How to lose friends and influence nothing

The Trade Act of 1930, generally known as the Smoot-Hawley tariff, lost its standing as the worst trade policy action in US history when Donald Trump imposed his “Liberation Day” tariffs in April 2025. But Smoot-Hawley was widely recognized as a terrible mistake soon after its passage, as it provoked widespread retaliation and contributed to the downward spiral of world trade that accompanied and reinforced the Great Depression.

Recognition of Smoot-Hawley’s stupidity led to the 1934 Reciprocal Trade Agreements Act, under which the US began negotiating trade deals — we’ll reduce our tariffs if you reduce yours — that helped pave the way for the great recovery of world trade and the global economy as a whole in the decades that followed World War II.

Yesterday the Trump administration invoked an obscure and never-before-used provision of Smoot-Hawley — Section 338 — to impose 50 percent tariffs on a wide range of Canadian goods.

Why? Why now? The White House fact sheet claims that the new tariffs are a response to Canadian policies that discriminate against U.S. products, notably the moves by most Canadian provinces (not the federal Canadian government) to stop importation of US alcoholic beverages. But these policies were themselves a response to the tariffs on Canadian goods Trump had previously imposed, without justification. Canadians were also reacting to Trump’s repeated demands that Canada surrender its independence and become the 51^st state.

Were these complaints about Canadian policies the real reason for the new tariffs? On Friday Trump lashed out with the Truth Social post at the top of this article, threatening to impose tariffs on Canadian goods because of … wildfire smoke.

For the record, wildfires have been raging in Canada’s boreal forest, which covers 2 million square miles — the majority of Canada’s land area — and is mostly unmanaged because it’s completely inaccessible. Blaming Canada for not controlling fires that are, in reality, largely a consequence of global warming is unutterably idiotic.

Now, Trump officials claim that these tariffs aren’t about wildfire smoke, although the timing of these latest tariffs is curious. Notably, they haven’t ruled out the possibility of wildfire tariffs in the future. “The president has asked for options on that, and options are being shared with him,” one official told the Financial Times.

Also, one has to wonder whether Trump is feeling upset at the way he was massively booed at the World Cup final — while Mark Carney, the Canadian Prime Minister and his co-host, was not.

Whatever the real motivation for these new tariffs, they are almost surely illegal. They are definitely a violation of the U.S.-Mexico-Canada trade agreement, a revision of NAFTA negotiated and signed by Trump himself during his first term. Indeed, the White House fact sheet explicitly states that the new tariffs will be imposed “regardless of whether a good originates under the U.S.-Mexico-Canada Agreement (USMCA).”

So these latest actions confirm what most people around the world, from the European Commission to Iran’s Islamic Revolutionary Guard, have already figured out: a deal with Donald Trump lasts only until he feels like breaking it.

The immediate economic impact of these tariffs will be limited. As far as I can tell, the highly integrated North American auto industry, which sprawls across both our northern and southern borders, won’t be directly affected. But the auto industry, like business in general, has been put on notice that the huge flows of goods and services that cross those borders every day may be cut off whenever Trump has a temper tantrum.

And this really is a temper tantrum, in the sense that there’s no strategy here. The new tariffs will hurt American consumers, and nobody expects them to extract any concessions from Canadians who are only getting more outraged at the United States.

Canada should be, and used to be, America’s greatest friend in the world. We share essential political and moral values with our northern neighbor. For the most part we even share a common language, eh? And Canadians viewed us very favorably until Trump began his tariffs and threats. Now we’re viewed less favorably than China:

The White House fact sheet on this latest move to further alienate everyone on the planet came with the usual pop-up:

Well, I don’t see a golden age. I see an America that has become an ineffectual bully, sicker, poorer, and riven by political extremism, with no friends anywhere in the world.

MUSICAL CODA