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Trump to find a cool host in Canada, amidst the trading gulf



When President Ronald Reagan visited Canada three decades ago, he was so kind with Prime Minister Brian Mulroney that they sang a song together.

Do not expect duets when President Donald Trump makes his first presidential visit to Canada on Friday to a summit in a quaint town in Quebec with the leaders of the Seven Prosperous Democracies. The mood is not likely to be quite as harmonious.

Prime Minister Justin Trudeau did not shy away from threatening Trump with the imposition of tariffs on steel and aluminum imports – including Canada – and justifying the protectionist move that threatened US national security.

Trudeau has charged that he found the tariffs "insulting" and said such tactics are hardly two close allies and trading partners fighting side by side in World War II, Korea and Afghanistan battling each other. The Trump administration also clashed with Canada for insisting that the 24-year-old North American Free Trade Agreement with the United States, Canada and Mexico should be written to better serve the US

The prime minister initially dropped criticism Trump, apparently in the hope that he could build a personal relationship that could help preserve the groundbreaking free trade agreement whose predecessors Reagan and Mulroney have negotiated. These two leaders quickly became friends and sang together in 1

985 in Québec "When Irish Eyes Are Smiling."

Trudeau's courting of Trump seemed to work for a while. The president had initially relieved Canada of the steel and aluminum tariffs in March. But Trudeau was unnerved and took a chance after Trump phased out the exception last week.

"We will continue to make arguments based on logic and common sense," he said, "and hope they will prevail against a government that does not always follow these principles."

The Prime Minister He had been hoping to visit Washington last week to complete what he considered were the last steps in the NAFTA renegotiation. But Vice President Mike Pence called and demanded that he agree to a "sunset clause" that would end NAFTA if the three countries did not agree to extend it every five years.

Trudeau refused and canceled the proposed visit. NAFTA talks have stalled. Since then Trump occasionally sounds hostile to Canada.

Nelson Wiseman, a professor at the University of Toronto, said he could not remember that relations between the US and Canada were worse. He said the G-7 meeting would take six against one. It was even speculated that Trump could leave meetings – or even decide not to appear.

"We can never underestimate the President's ability to stage theater in such a scenario," said Daniel Ujczo, a commercial lawyer with Dickson Wright. "And it would play well in places like Ohio where I live, they are world leaders in one of these globalist meetings, and they partner with it."

Under Trump, the United States has its traditional role in the G-7 given up. American presidents from Reagan to Barack Obama pushed for freer world trade. And they are working for a trading system that requires countries to follow the rules of the World Trade Organization.

Trump's policy, on the other hand, is inviolably protectionist and confrontational. To hear the President, ill-conceived trade agreements and unfair US trading practices have compounded America's trade deficit with the rest of the world – $ 566 billion last year – and contributed to the loss of millions of factory jobs.

Given the conflicts between Washington and its allies, the most likely outcome of the G-7 talks, said William Reinsch, a trade analyst at the Center for Strategic and International Studies, is "polite bitterness."

The United States has experienced tense relations with its allies prior to – during the Vietnam War, for example, Reagan's decision to deploy Pershing II missiles in Europe, and the invasion of Iraq by President George W. Bush. But Trump's moves – tariffs and his decisions to withdraw, including from the Paris Climate Agreement and the nuclear deal with Iran – have fueled hostility.

"This is the first time that the US government has been perceived to be acting maliciously, to regard allies as a threat, to consider trade as negative, and to fundamentally undermine the system that it has built," said Adam Posen, president of the Peterson Institute for International Economics. "This US government feels bound by previous US commitments in a way no other government has ever experienced."

"Prime ministers are people and he offends them," said Reinsch. "They just will not turn around if he hits them in the nose like that."

Canada and other US allies retaliate with tariffs on US exports. Canada will wait until the end of the month to apply it with the hope that the Trump administration will rethink it. Canadian tariffs would apply to goods ranging from yoghurt to whiskey.

Many of the US products subject to duty duties in Canada were selected on a political and not an economic basis, said Mike von Massow, associate professor of food, agriculture and resource economics at the University of Guelph.

For example, from Massow said, Canada imports only $ 3 million of yogurt from the US annually. And most of it comes from a factory in Wisconsin, the home state of house speaker Paul Ryan.

Another product on the list is Whiskey, which originated in Tennessee or Kentucky, the latter being the state of origin of Republican Senate leader Mitch McConnell

Trump has also considered splitting NAFTA and negotiating separate trade agreements with Canada and Mexico, what Ujczo sees as a strategy of sharing and ruling.

Robert Bothwell, a professor at the University of Toronto, said Trump's actions seem to break Canada's bargaining table.

"They rely on the overwhelming strength of the US to force a much weaker neighbor to give in to what they demand," Bothwell said. "This brings with it the real possibility that Canadian-American relations will be permanently damaged."

Bothwell expects this to be Trump's only visit to Canada. He even wonders if it could be the last G-7 meeting for the president.

"We did not have an American president or government in the postwar period," said Colin Robertson, a former Canadian diplomat. "I'm worried because it's detrimental to the rules-based international system for which the Americans were guardians."

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AP economics journalist Martin Crutsinger in Washington contributed to this report

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, transmitted, rewritten or redistributed.


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