John Ivison: Any trade deal with the U.S. will cost Carney

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Sections 301 and 338 of the Trade Expansion Act — the “forced labor” and “unfair trading practices” provisions — are being used to bully Canada into making concessions.

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But the president is following the game plan of his first term, where he winked at his U.S. audience and asked them to play along with him.

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His allies like Republican senator Kevin Cramer call the rhetoric “friendly banter.”

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U.S. ambassador in Canada, Peter Hoekstra, says Trump is a businessman. “Maybe you don’t like the way the president says it, but take it on the tone of what he is saying, which is: ‘We’re open to offers, make your case.’”

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U.S. Trade Representative, Jamieson Greer, has been frank that the administration wants to see trade imbalances reduced and, in particular, is seeking changes on dairy quota, the Online Streaming act and an end to the ban on U.S. liquor in provincial distribution networks.

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But there are no hints that the U.S. wants out of the CUSMA trade deal. In fact, Cramer said Greer recently told him that the two sides are “on a good track.”

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Nothing can ever be ruled out with Trump but he does not have unilateral freedom to impose a 50 per cent levy on Canada.

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Tariffs are unpopular with voters — up to 70 per cent of whom express negative views on them. The Yale Budget Lab estimates they cost the average U.S. household $1,100 a year.

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The forced labour tariffs are already being challenged in the Court of International Trade by 25 states and a number of companies. Opposition to blanket tariffs by impacted businesses is said to be hitting Republican fundraising.

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Legislation has been introduced into the Senate to reassert Congress’ authority over international trade.

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Trump is seeing some success in his trade strategy — exports increased by 15.2 per cent in June, year on year, and Canada, as the second largest export market, is key to that.

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In addition, far from not needing anything from north of the 49th parallel, Canada provides one quarter of America’s net crude, most of its potash, half its aluminum and a third of its uranium and softwood lumber.

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Trump wants Canada to give generously but even he must realize that it would be madness to blow up the trading relationship.

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The rumoured deal would see U.S. liquor returned to provincial shelves (even if, like the horse that is led to water, the president can’t make Canadians drink it).

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The putative deal would also likely increase access to dairy markets, offer preferential treatment for U.S. defence contractors and tighten rules of origin on automobiles.

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In return, tariffs on steel and aluminum would be lowered and the proposed new section 338 tariffs would be deep-sixed.

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The anti-Trump zealots at home who want to go down fighting are wrong.

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The trouble with being a martyr is that you get martyred.

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Canada can’t win against the U.S. but it can leverage its value as a trading partner to negotiate the lowest effective tariff rate in the world.

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Whether that is viewed as appeasement or pragmatism is in the eye of the beholder.

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Twitter.com/IvisonJ

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