In a dramatic turn of events over the past 24 hours, President Donald Trump initially escalated the trade war with Canada by doubling tariffs on Canadian steel and aluminum imports from 25% to 50%. This move was framed as retaliation against Ontario Premier Doug Ford’s decision to impose a 25% levy on electricity exports to the United States.
What followed was an all too-Trumpian spectacle of bluster, brinkmanship, and backtracking.
Ford, despite having pledged to stand firm against Trump, abruptly suspended the electricity levy following a call with U.S. Commerce Secretary Howard Lutnick. Trump, in turn, hinted that he would “probably” reconsider the 50% tariffs, though not the original 25% tariffs on steel and aluminum.
The Tariff War of 2025 Keep Getting Worse
The cycle of escalation and de-escalation highlights the chaotic and shortsighted nature of Trump’s economic vision – one that is utterly disconnected from serious economic thought, steeped in outdated protectionist delusions, and ultimately harmful to American economic and geopolitical interests.
This is not serious economic policymaking – it is unserious political spectacle. It is Trump announcing sweeping tariffs with little forethought, only to adjust course when the inevitable domestic and international blowback kicks in. This pattern – impose tariffs, provoke retaliation, absorb the economic pain, then reverse course – has become the defining characteristic of Trump’s approach to trade. But this is not rational economic strategy; it is irrational psychological reflex.
What takes this latest round of the tariff war to even greater heights of absurdity is that it is grounded in the most profound misunderstanding of the nature of the modern economy. Trump still seems to believe that tariffs can function as they did in the 19th century, when the United States could use tariffs to develop domestic industries and to fund a federal government that was a tiny fraction of the size of today’s. But that era, to the extent it ever really existed, passed long ago.
Today, the American economy is integrated into a global economy – one in which supply chains traverse borders as a matter of course. American manufacturers sometimes compete against foreign imports; but they often rely on them too. So, for example, Canadian steel and aluminum producers are not just competitors with American firms – they are critical nodes in integrated North American supply chains that enable U.S. firms to manufacture their products and employ millions of American workers in the process.
By making the contributions of these Canadian suppliers more expensive, Trump is not protecting American industry; he is actively sabotaging it. As these tariffs kick in, U.S. automakers, construction firms, and aerospace manufacturers will face higher costs, incentivizing them to either raise prices, cut jobs, or move production elsewhere. What they will not do is reshore jobs to the U.S.. Nor will they make American firms more competitive. Indeed, quite the opposite: they will make American businesses less efficient and less competitive in the global marketplace .
And if all that weren’t reason enough to oppose Trump’s tariffs, this latest round of tariffs also threatens to disrupt the U.S. defense industrial base, which depends on Canadian raw materials, parts and components. Against the backdrop of war in Ukraine and tensions in the Indo-Pacific, the U.S. defense sector is already struggling to keep up with demand.
The last thing America’s military needs right now is an arbitrary increase in the cost of materials required for the production of artillery shells, missiles, warships, fighter jets, or armored vehicles. Canada has long been an indispensable partner in U.S. defense production, supplying key components under agreements that both reflect and reinforce the deep interdependence of both countries’ security interests. Disrupting this partnership by initiating tariff war will not only increase costs for the Pentagon but also delay weapons production at a time when military readiness is a pressing concern.
What Donald Trump Is Missing and Gets Wrong
While Trump’s foreign policy instincts – at least in some areas – reflect something of understanding of evolving global power dynamics, his trade policies reveal nothing more than a profound and pernicious ignorance of how the modern economy functions. The president, for example, views trade as a zero-sum game when, in fact, it is a key ingredient of economic growth. As a result, he prioritizes the theatrics of economic nationalism – and especially tariffs – over policies that would actually strengthen America’s (defense) industrial base.
The global consequences of Trump’s tariff war are already being felt. Trump’s on-again-off-again tariffs – whether universal, bilateral, or sectoral – are reinforcing the very arguments that America’s rivals, most notably the BRICS nations, are using to promote an alternative global order.
China, Russia, and their partners have long sought to challenge U.S. economic dominance, arguing that Washington is an unreliable and destabilizing force. Trump’s tariff wars are, if not proving them right, certainly providing grist for their ideological mill.
At a moment when the United States should be consolidating economic partnerships to blunt China’s efforts to assume a greater economic and geopolitical role, Trump is doing the opposite. Instead of strengthening the U.S.-Canada-Mexico trade bloc to build a more competitive North American industrial base, he is actively undermining it. Instead of cooperating with allies in Europe and Asia to provide a counter-weight to China’s Belt and Road initiative, he is making economic conflict with them inevitable.
Instead of reinforcing a global free trade regime that has long disproportionately benefited American industry he is making the United States a less reliable trading partner and driving Washington’s erstwhile friends, allies and economic partners to explore alternative economic arrangements.
Can Donald Trump Change Course on the Tariff War?
Given the reaction to Trump’s declaration of tariff war – both at home and abroad – the question now is will this administration change course. Unfortunately for both the U.S. and all of its friends and allies, the answer would appear to be no. Unlike in the domain of grand strategy, where his administration has shown at least some capacity to rethink outdated assumptions, his economic instincts remain frozen in a world that hasn’t existed since the mid-19th centuryy. His vision for America’s economy is not a vision at all – at least if by vision one means an ability to think about or plan the future with imagination or wisdom.
Rather, it is a nostalgic delusion, one based on a half-remembered, half-imagined “memory” of America’s 19th century past. If Trump continues to frame U.S. trade policy according to this ill-informed nostalgic delusion, he will not be remembered as the president who restored American greatness, but rather as the one who terminally undermined it – one tariff at a time.
About the Author: Dr. Andrew Latham
Andrew Latham is a non-resident fellow at Defense Priorities and a professor of international relations and political theory at Macalester College in Saint Paul, MN. Andrew is now a Contributing Editor to 19FortyFive, where he writes a daily column. You can follow him on X: @aakatham.
waco
March 12, 2025 at 12:12 pm
President trump’s tariffs against Canada are like pails of cold water aimed at Trudeau’s head.
But trump has relented a bit due to Ontario (province) getting cold feet and deciding not to challenge trump.
Thus Trudeau has been spared some embarrassment. However this carney fellow is now full of bravado and talking big.
Wait till trump comes up with a firehouse instead of pails of water.
Stefen
March 12, 2025 at 1:54 pm
I don’t think any Americans actually understand the trade relationship with Canada, so as someone who does I will clarify Trump’s issues:
1) trade surplus. Trump refers to the US subsidizing Canada $200 billion, he is referring to the trade surplus. It is a little exaggerated as the true number is closer to $45 billion. What Americans don’t understand though is that the trade surplus is largely made up of one main commodity: unrefined oil. The oil is extracted in Canada by domestic companies who are majority owned by US investors, then sold at discount to US refineries that process it and sell it for marked up profits in the US and back to Canadians. That’s why, remarkably, gas is cheaper in the US than Canada. This is not really the US subsidizing Canada, it would be more accurate to say that the US benefits more as it stands.
The danger for the US here is that if Canada is enabled to build more pipelines and infrastructure to refine the oil themselves and sell to Asian markets, the US refineries will lose out on that discount oil and have to rebuild their refineries for Venezuelan oil and local product as more comes on line. If I understand correctly, the discount on Canadian oil is something like 20-30%, so it would really increase costs for US customers a lot to lose that source and have to pay market value.
2) dairy. Canada has a supply management system that protects farmers from over producing milk. The US does not have this system, so farmers in the US regularly over produce and have to rely on government subsidies to survive. The idea behind this was that US governments felt it was better to artificially keep the price of milk low so low income families can afford it. That’s why also justified the use of bovine growth hormones while most other developed countries banned them.
Canadian farmers are not subsidized and their milk costs more, but the amount of milk is throttled that Canada lets in from the US. If Canada opened up its dairy, the industry would be gone in a day because they can’t compete with cheap US subsidized milk. They also can’t use bovine growth hormone in Canada, which allows US farmers to squeeze more milk for cheaper out of every cow. Trump says Canada has a 300% tariff on US milk, but this is not completely true. The US milk that enters Canada is tariff free, and the tariff only applies after a certain quota is reached, which stops the US from dumping too much milk which would wipe out the Canadian farmers. The US is notorious for dumping cheap, subsidized milk onto other countries and has been responsible for the complete collapse of domestic farm industries in the past in developing countries like Jamaica.
3) lumber. The Canadian government owns thousands of miles of forests and let’s logging companies bid to log on these lands. They still have to pay to log them, but the companies don’t have to buy the land outright. US logging companies see this as unfair, as US logging companies have to buy the land they log on, so they want higher and higher tariffs on Canadian lumber. Another problem is that Canadian lumber is apparently higher quality than southern lumber because it is slower growing in colder climates, which makes for dense hard wood, so US companies will actively source Canadian lumber over domestic.
This issue has existed for decades, and US tariffs are nothing new. However, in the last few years the tariffs have risen considerably.
4) the Arctic. I think this is the real issue. Trump wants to either annex Canada or make it into a client state, probably because his hawk advisors are rightly concerned about Russian and Chinese influence in the Arctic expanding faster than America’s. It’s the same reason he wants Greenland. Climate change is quickly reshaping the arctic and as ice leaves new opportunities emerge. There are shipping routes, oil and minerals at play, as well as continental security.
After WW2, Canada had one of the largest navies in the world and a fierce military with a terrifying reputation, but since then successive government after government in Canada has seriously neglected military spending and development. The main threat to Canadian soveriegnty for most of its history was the US, and after WW2 the close integration of the US and Canada, and the decision making from Washington, basically overrode Canadian military decision making and took away any urgency or incentive to spend. For example, Canada spent millions developing the Avro Arrow Arctic jet fighter during the cold war, and it looked to be a complete game changer for long distance military jets, but it was suddenly scrapped completely after an election, with even the prototypes destroyed or lost. Sentiment of the day was that US influences had pressured the new Prime Minister to scrap the jet to ensure that US companies would continue to enjoy exclusive superiority in the military industry, and complete integration with allies, etc. Many of those Canadian workers were then poached by American companies and NASA to relocate to the US, effectively dismantling Canada’s own fledgling industry. Some of those engineers had incredible careers at NASA, bringing expertise and research that made them well known and successful. Couple that with the legacy of Canadians who worked in the US on nuclear bomb development, and it basically reinforced and encouraged the idea that ambitious and smart Canadians were better off leave to the US to do research and development work in military and tech.
Brian
March 12, 2025 at 2:17 pm
I can’t say that Trump is actively and traitorously seeking to destroy the US. I can’t say if he is indeed, as some have charged, a Russian asset.
But what would it look like if he were?
Jah Blowme
March 12, 2025 at 2:27 pm
Andrew, yet another anti-Trump opinion rant… we get it… you and your warhawk cronies are upset that we aren’t going to get pulled into another ridiculous kinetic war…which only serves to benefit the industrial war machine, and the politicians who have portfolios invested in those companies… and geopolitical rag-writers who trumpet the Neocon hive-mind rhetoric.
Zhduny
March 12, 2025 at 6:38 pm
Tariffs are NECESSARY, even the tariffs hurled at ottawa.
Tariffs fight unrestrained globalists, and unrestrained globalism which is a very very dangerous affliction that harms mankind.
Tariffs keep uncontrolled tendencies at bay, and help avoid growth of lopsided social, economic and political policies that hobble natural human relationships and cooperation leading to opioid epidemics, highly contagious diseases like covid and hiv, and spread of unwanted practices like human trafficking, scamming, and white slavery or modern slavery.
Thus the author MUST be able to see the forest and avoid getting distracted by the few annoying trees.
Still, tariffs need some or a little bit of refinement (or tweaking) every now and then.
That shouldn’t be considered or regarded as signs of delusion. Amen.
Bankotsu
March 13, 2025 at 1:06 am
“But what would it look like if he were?”
He would pull out of Ukraine.
Jim
March 13, 2025 at 2:23 am
The industrial Mid-West, stretching across the Northern tier of states, that is how it was described with pride for decades after World War Two, until Globalists off-shored factories & jobs.
With even quasi-official encouragement from ‘trade officials’ here in the United States.
Then it became known as the Rust Belt.
Whole communities were gutted as huge industrial buildings, where manufacturing once thrived lay in rust, broken windows, and decay… and left were the broken dreams of those who depended on those factories for their livelihoods, to support their families, and the well-being of their communities.
The Canada negotiations are only a part of a larger equation. How to handle Canada? Reciprocal tariffs, also can be thought of as mirror tariffs. In other words, fairness.
In the bigger picture Trump wants to direct a large capital funnel over the United States to reverse the ugly visage of the Rust Belt and more generally the whole the United States.
There will be bumps & grinds… difficulties and disagreements with trading partners and the various stake-holders in the international flow of trade.
Changing an unfair globalist system is not easy, nor without some disruptions, as is always the case when trying to change a long entrenched system.
Canada should be the country we do our best to engage in good faith negotiations over trade and we expect good faith in return from the Canadians.
That’s what good neighbors do.
“Hairs afire” rhetoric doesn’t help a process which is long overdo and needs calm, firm deliberations in a clear-eyed look at current tariffs and trade barriers on both sides of the border.
We can’t treat Canada as a kid brother anymore.
Canadian leaders need to calm down and get to work on negotiations.
The sooner the better.
Swamplaw Yankee
March 14, 2025 at 5:16 am
HMM. Nostalgic delusion. Half remembered, half nostalgic past. Oui, Yes, French Canada: Champlain was busy in 1615 in Ontario.
There was zero USA in 1615. Can the Yankee remember much before 250 years back? Now, the Yankee pretends their great great grand pappy did not pillage and butcher french canadians of French Canada.
The Yankee empire dreamers still need to make reparations to Canada for their crazed “America First” cowards of WW2. While Newfoundland and Canadian boys went off to die in WW2, America First yellooo belliiie neutralists played with their brave amigos down in Mexico. The Yankee plan was to coward or neutralize till 1944 or 45.
But, that evil emperor upset the whole vacation schedule. That very bad emperor allowed his banzai boys to interrupt the Yellooo Belliiiee festival of peace.
Today, the Canuck still has to look the Yankee in the eye and pretend nicely that the Great Yankee stopped ww2 just by showing up over there. Yeah: Hitler pooped his pants when the Yanks showed up. Hey, the Yankee Hollywood movies prove it.
The real grievance is that the Yankee has not increased their % of GNP on defence to Reagan levels.
The real grievance is that the Canuck is no more. The WW2 Canuck has withered away just as has the Canadian % of GNP for defense.
The Canuck needs to stop the WOKE disease inside itself and get to 5 % GNP defense spending in the next 13 months. oh, the wailing begins in the DEI north! Oh, the super funded sanctuary cities of the north need more cash.
The FSB has cells galore in Canada. The Bin Laden boys scuffled with the Tibetan refugees at their South Parkdale “secret” Gog HQ for the 9-11 surprise project. The Han CCP triads run everything.
The Yankee may have got a flavourd whiff when they viewed on the media news hundreds of thousands of Toronto area Hamas terrorist supporters on October 7th, ecstatic in religious joy over the butchery of Jewish babies and/or mothers. Who in Hamas did not have an expensive car and huge Hamas flags attached to it?
The country has more leftie pinkoes on generous government over pay than all of the FSB combined for 50 years. McCarthy was right on, if today in Canada. -30-