January 20, part 2

Just a few hours from now, Donald Trump will take the oath of office, and we will learn which of his threats, or promises, he intends to carry out.

In my last post, I wrote about the hazards of taking Mr. Trump's implicit promise to make Canada a state with caution; I believe that if we surrender before Donald Trump's economic aggression, we would find ourselves residents of a territory, not a state, and Canadians, or former Canadians, as we would be if we surrendered, might well find ourselves classified as US nationals, rather than citizens with voting rights. 

But if too many Canadian commentators have been mistakenly optimistic about our prospects should we surrender, we have been unreasonably pessimistic about our ability to face the kind of economic pressure Trump's government could or would bring to bear. 

To begin at the beginning: Canadians cannot, ultimately, be coerced. In all the essential resources, whether food, energy, or knowledge, we have the ability, if pushed into it, to support ourselves with no trade at all. Of course, we would be deeply unwise to choose to do this, but we could do it if we had no alternative. In the end, if we surrender it will because we want to spare ourselves economic pain; we cannot be starved into submission by economic pressure alone.

Of course, it is beyond the power of the United States to prevent us from trading with the world altogether. Even if the European would tolerate such an abuse of American economic power, it would require the American government to spend such massive amounts of political and economic capital that Congress, government, or at least the American business community would balk at the costs involved.

So, the weapons in Donald Trump's economic arsenal are likely limited to tariffs. If he imposes them as he has threatened to do, they will hurt. The will almost certainly push our economy, and particularly our manufacturing economy, into a recession. Although economists talk of Trump's moves "devastating" our economy, the numbers they publish indicate our economy will shrink by less than five percent. That will hurt, and it doesn't do to minimize the pain we will feel. That doesn't make it a pain we cannot survive. We would never choose to inflict this on ourselves, but I would argue that if the worst comes to the worst, our country and the rights of every Canadian, are worth sacrificing a twentieth of our economy for. 

It is also worth pointing out that the Trump Administration's proposed tariff policy, if followed through, would hurt Americans, and particularly American manufacturing, just as badly as it would hurt us. The larger American economy could absorb the blow more easily than ours, but plenty of production worker, the people the Republicans hope to appeal to, will lose jobs. Worse, American inflation will take off again. That sets limits on both the extent and duration of any policy designed to coerce Canada and Canadians.

Later today, we will find out how much of his rhetoric Donald Trump actually meant. We can hope he meant none of his threats against Canada, but it helps to understand we can face them.