Regardless of any agreement reached between Canada and the United States to replace NAFTA, in the course of his hard bargaining, President Trump has alienated our biggest ally and most important trading partner. His exchange of short term political talking points for long term damage to foreign relations might work for a one-time NAFTA overhaul, but it is a terrible long-term strategy.
Although Trump touts the importance of one time deals, milestones that he can point to attesting to his success as president, long term relationships like that between the U.S. and Canada are about much more than signed pieces of paper. For Trump, however, long term relations built on something other than blind, personal loyalty don’t seem to be a priority, but they should.
[Related: Can the US exclude Canada from its trade deal with Mexico?]
The world already got a bitter taste of this when Trump surprised everyone by calling Canadian Prime Minister Justin Trudeau “very dishonest and weak” at the Group of 7 summit in Quebec and withdrew U.S. agreement from what was supposed to be a joint communique.
But the NAFTA negotiations are an even better example. Trump has consistently slammed Canada for protecting its domestic dairy industry, and that seems to be a key point in ongoing negotiations about Canada’s agreement to the revised plan for NAFTA. Trump is right that Canadian protection of its dairy is a barrier to trade and that it may mean that U.S. exporters don’t have as much access to a potentially lucrative market, but, it’s not quite as simple as Trump’s tweets suggest – most issues, after all, cannot be boiled down to 140 characters.
To start with, part of Trump’s problem with Canadian dairy tariffs is that the U.S. has an oversupply of its own, caused by heavy government subsidies. Although that extra money for farmers might not be as obvious on the international playing field as the tariffs are, it still manipulates the market producing more supply than the market demands. That means that the U.S. wants to sell some of that extra to Canada. But their government, like ours, wants to ensure that farmers have a stable and steady income. The Canadians just go about it a little differently by protecting farmers with actual tariffs.
Arguably, both governments are using taxpayers to prop up industries that are key to domestic politics – a policy which is bad for both economies overall and amounts to a taxpayer bail out of the industry on both sides of the border.
Beyond that, the more obvious issue with making dairy a sticking point in the relationship between the two countries is that the entire trade of dairy products between the U.S. and Canada amounts to the grand sum of less than $600 million. For reference, the total trade with Canada in 2017 was $581.6 billion.
In short, dairy should not drive a wedge between the U.S. and Canada.
Instead, Trump would do better to focus on the reasons that maintaining a good relationship with the Canadians are important to U.S. interests rather than using the threat of tariffs to bully our ally to the negotiating table to get a concession on an issue that has only become a big deal because the president tweets about it.
Some of those other things that matter more than milk and cheese crossing the border includes cooperation on security (the U.S. and Canada share the longest unsecured border in the world), combating extremism and terrorism, protecting the norms of the international order against the destabilizing forces of China and Russia, bolstering key alliances like NATO and working to address the growing refugee crisis that is threatening the stability of both countries traditional partners across the Atlantic.
These issues, unlike the squabble over dairy, have serious, long term consequences for both countries and the world and the U.S. will have far more success working out solutions with our neighbor as our ally rather than as a punching bag for the president.
Dragging Canada to the negotiating table and excluding the country from initial talks, only to then use the threat of tariffs to force an agreement, is also unnecessary. Canada would also like a revised and updated NAFTA deal and has repeatedly indicated its desire to work with Trump on making that happen. All Trump’s tactics have done is further alienate our ally.
The United States is not weaker for friendly relationships with Canada, on the contrary, we are stronger because of our alliance and that relationship is much more than a one-time deal made under threat.