One expert says that U.S. President-elect Donald Trump should spend more time focusing on oversees adversaries rather than putting his country’s relationship with its North American allies at risk by threatening to impose sweeping tariffs on imported goods.
Sean King, senior VP at New York-based lobbying firm Park Strategies, told BNN Bloomberg in a Monday interview that relations between Canada and the U.S. “should be very good” considering the many cultural and economic ties between the neighbouring countries.
“I take a wider geostrategic view of this, where the U.S. is only five per cent of the world’s population, and I see us with real rivals and real enemies whether it’s China, Russia, North Korea, or Iran, and I just don’t count Mexico and Canada among those, especially not Canada,” he said.
Canada-U.S. relations have been strained since Trump announced plans last month to impose a 25 per cent tariff on Canadian and Mexican goods entering the U.S. on his first day in office if concerns around border security aren’t addressed.
Canadian officials and business leaders swiftly responded by saying tariffs would hurt workers on either side of the border and likely put upward pressure on inflation in the U.S. – an issue Trump promised to address throughout his presidential campaign.
Trudeau’s meeting with Trump
Last week, Prime Minister Justin Trudeau flew to Florida for a meeting with Trump at his Mar-a-Lago estate, where the two leaders discussed a variety of issues including the tariff threat and Trump’s border concerns.
King said that while it may have been difficult for Trudeau to “go down there and kiss the ring,” his decision to meet with Trump and a number of his nominated cabinet members was a good idea.
“I think the takeaways and the body language were positive. Trump obviously showed he was taking the meeting very seriously. He hosted him at his home, and the fact that he had such high-level, relevant incoming cabinet officials gives me confidence that they talked real turkey,” he said.
The meeting included incoming U.S. Commerce Secretary and trade czar Howard Lutnick, incoming Interior Secretary Doug Burgum and incoming National Security Advisor Michael Waltz, Bloomberg reported Saturday.
Trudeau’s delegation included his Chief of Staff Katie Telford as well as Public Safety Minister Dominic LeBlanc and Kirsten Hillman, Canada’s ambassador to Washington, according to Bloomberg.
King said that officials such as Lutnick, Burgum and Waltz “are the real people that will handle tariffs and (border) security” in Trump’s incoming administration.
‘Inflationary tariffs’
The risk of Trump’s proposed tariffs causing an uptick in inflation in the U.S. is an argument that Trudeau and his team should have been able to use as a reason to potentially exempt Canada from them, King said, especially given the U.S.’s reliance on Canadian oil.
“President Biden unfortunately cancelled the (Keystone XL) pipeline coming into office and Trump has promised to open it up, which was a big winner in states like Pennsylvania, which got him the election,” he said.
“So, if anything, Trump’s own plans call for an increase of Canada’s trade surplus with the U.S. because he wants more oil from you, which I want too. I’d rather get it from Canada than the likes of Venezuela, Saudi Arabia or whoever else.”
King added that as Trump touts his tariff plans as a way to create a more self-sufficient U.S. economy, he should be more transparent about who exactly will be paying the levy.
“Trump, who himself went to Wharton and likes to tell us how smart he is, should at least be honest with people that these inflationary tariffs are paid by the U.S. importer, they’re not paid by the selling country,” he said.
“So, yes, they’re inflationary, Americans pay them, and I think that we want more oil from Canada so we’re going to have to suck it up and accept a bigger Canadian trade surplus, at least in the short term.”
Integrated market
King said that another factor complicating Trump’s tariff plan is the inextricable nature of the Canada-U.S. supply chain.
“The U.S. and Canada could not live without each other… I heard one person say over the weekend that there’s no such thing as an American car or a Canadian car, there’s a North American car, because it really is an integrated market,” he said.
King argued that when it comes to border safety concerns, Canada and Mexico should be treated differently, as data suggests the southern U.S. border is where the vast majority of illegal crossings occur.
“It’s so unfair to lump (Canada) in with Mexico. For the latest 12-month period on record that I saw, Canada is responsible for 0.6 per cent of illegal crossings into the U.S.,” he said.
“Sure, there are things to talk about… but I think we can work through these things and hopefully avoid tariffs, keep our friends close, rally democracies together, and focus our time on our real adversaries.”
With files from Bloomberg News