Krugman, "The Moose that Roared," begins with how Trump tariff bully-aim led Canada's Conservative Party to lose an election, then -
Carney currently has 60 percent approval and 31 percent disapproval — almost exactly the opposite of Trump’s numbers.
Yet a bully refuses to learn that his actions are counterproductive and instead doubles down. So Trump persisted, most recently by imposing steep new tariffs on Canadian exports, invoking a never-before-used section of the 1930 Smoot-Hawley tariff act as legal justification. In an effort to head these new tariffs off, Canada entered negotiations with the United States, talks that for a while seemed on track to ramp down the tensions. But on Friday Canadian negotiators walked out — and the U.S.-Canada trade war is now on.
Why did the talks break down? According to U.S. officials, the Canadians made additional last-minute demands, although they offered no specifics on what these demands were. According to the Canadians, it was the Americans who suddenly changed the terms. According to the Toronto Star, Carney
was faced with a trade agreement that was suddenly transformed into an attack on Canadian sovereignty, an attempted psychological annexation that could have turned Canada into an American client state, a sort of North American Belarus.
Does anyone seriously doubt that Canada, not the Trump administration, is telling the truth?
Anyway, the trade war is now on. Who will win it?
On the face of it, the opponents — I still have to rub my eyes at the idea of Canada as an enemy — appear extremely unevenly matched. The U.S. economy is a dozen times larger than Canada’s. We buy three-quarters of their exports, while they buy only about a sixth of ours. Surely they must have much more than we do to lose from trade conflict.
Yet one clear lesson from a year and a half of Trumpian trade war is that when trade conflicts become extreme, access to crucial imports is more important than the ability to export to another country’s markets. In the case of Trump’s tariffs on China, they have been little more than an inconvenience to the Chinese economy. But China’s threat to cut off exports of rare earths is an existential threat to Western technology industries.
And the U.S. economy is far more dependent on Canadian goods than most Americans realize.
After a few paragrapsh highlighting examples showing the dependence, Krugman continues:
The point is not that Canada has “escalation dominance” — the ability to retaliate to every U.S. action with an even more damaging counterreaction — in a trade conflict with the United States. Rather, the point is that an all-out trade war would create a lot of pain in the U.S. in addition to inflicting severe damage to the Canadian economy. And all indications are that the Canadians will be much more willing to bear the pain of a trade war than Americans will – especially given that the great majority of Americans are already dissatisfied with Trump’s economic management.
Despite Trump’s best efforts, only a minority of Republicans — and nobody else — has been persuaded that the Canadians are acting badly
On the other side, Trump has managed to convince Canadians of all political stripes that the U.S. can’t be trusted:
So, does Trump have any chance of winning his trade war with Canada?
That insight into pain and who can take it seems the focus of the balance of Krugman's pondering. With his asking, "does Trump have any chance of winning" showing a further intent to show he has none.
Bottom lines are always nice endings of screeds, Krugman ending:
The bottom line is that Trump is going to lose his trade war with Canada as thoroughly as he has lost his shooting war with Iran. But because he won’t face reality, trade with our northern neighbor will probably be disrupted until the narcissistic bully in the White House no longer controls trade policy.
Giant hat tip to Krugman and those online who posted of it and/or linked to it. For anyone not a Peter Sellers fan and unknowing Krugman's headlining thing, here.
