Analysis

It's Trudeau's move after Trump goes from tough talk to action with lumber duties: Chris Hall

The Liberal government's unofficial policy is not to react to everything Trump says, only what he does. Like, say, imposing punishing new duties on Canadian softwood lumber.

Liberal government's unofficial policy is not to react to everything Trump says, only what he does

The unofficial policy of the Trudeau government to this point has been to avoid responding to every single thing U.S. President Donald Trump says about Canada, only his actions, such as, for example, imposing new duties on Canadian softwood lumber. (Andrew Harrer/Bloomberg)

Donald Trump is proving, once again, to be a most unpredictable partner.

He can talk about how much he values Canada one day, and then brand this valued neighbour a "disgrace" for the simple reason that he sees a political advantage in doing so back home.

The Trump administration slapped punishing duties on Canadian softwood lumber on Tuesday. That, at least, was to be expected. It's happened before. It would likely have happened if Hillary Clinton were president.

But softwood followed on the heels of other challenges to the trade relationship. Last week, Trump accused Canadian policies of threatening the livelihood of dairy farmers in Wisconsin and New York. He, inexplicably, suggested energy exports from Canada are unfairly harming American businesses.

"We can't let Canada or anybody else take advantage and do what they did to our workers and our farmers," Trump said last Thursday, reading from his own handwritten notes before signing an executive order to investigate steel imports, including presumably those from Canada.

"And again, I want to also mention, included in there is lumber, timber and energy," he said. "So we're going to have to get to the negotiating table with Canada very quickly." 

And just in case he hadn't been clear enough already, the president gave it one more go.

"Again, just to tell you, this is another NAFTA disaster. And we're not going to let it continue onward."

Trump vowed during the signing of an executive order at the White House last Thursday to strike back at Canada for its unfair trade. (Susan Walsh/Associated Press)

This is likely nothing more than a bargaining ploy.

Dairy and softwood aren't even part of the North American Free Trade Agreement, even if Trump is signalling that he thinks they should be.

Fact from fiction

The question is how Canada should respond, now that we've been added to the long list of countries this president feels his predecessors, lousy negotiators all, permitted to take advantage of U.S. businesses and their employees.

The difficulty for Canada is that some of the things Trump says have little to do with the facts.

U.S president says Canada has outsmarted U.S politicians for many years, but he doesn't fear a trade war 0:57

Natural Resources Minister Jim Carr told Power and Politics this week he has no idea what Trump was referring to when he criticised Canada's energy trade.

"I could give you the facts," he told host Rosemary Barton. "I could tell you the balance of trade in energy. I can tell you what industry leaders and CEOs throughout the United States say, that this is an integrated market that's in the interests of all countries."

The same is true for steel.

The American dairy industry actually exports far more to Canada than the other way around.

And then there's Trump's propensity to say one thing and abruptly change his mind. He called China a currency manipulator, and then said it wasn't. NATO was obsolete, until it wasn't.

As a president, he's without precedent.

The Canadian response to Trump's election win, and the past week's Blame Canada routine, is to stress the value of the Canada/U.S. trading relationship; that millions of jobs on both sides of the border depend on the smooth flow of goods and services.

The prime minister stuck with that approach again on Tuesday.

"Standing up for Canada's interests is my job whether it's softwood or software … what we have to know is we are tremendously interconnected," Justin Trudeau said during a meeting with high-tech leaders in Kitchener, Ont.

"Any two countries are going to have issues that will be irritants to the relationship and quite frankly having a good constructive relationship allows us to work through those irritants."

What Trump does 

The unofficial policy inside the federal government is not to react to everything Trump says. Leave that to the media. The prudent approach is to react to what Trump does — which is why the prime minister called the president yesterday and vowed to defend the interests of Canada's softwood lumber industry.

But some are advocating a harder line.

"We don't seem to have a plan," NDP Leader Tom Mulcair told reporters Tuesday in response to the softwood lumber tariffs. "When you are dealing with a bully, at some point you have to stop backing up and that's all Mr. Trudeau seems to be able to do with President Trump."

The Canadian who leads the United Steelworkers union takes a similar view.

Leo Gerard was invited to the Oval Office where Trump signed the executive order on steel imports — which he supports — but his union also represents workers in the softwood industry.

"Part of my job as the president of a large, diverse international union is to ensure that Canada's interests are protected. And that we know that on all of these industrial activities that Canada is not the enemy. Not the problem. The problem is the countries that are causing us both problems."

The U.S. has decided to impose countervailing duties of between three and 24 per cent on Canadian imports of softwood lumber. (Paul Chiasson/Canadian Press)

Gerard says Canada should challenge the softwood tariffs immediately. He says the industry in the U.S. isn't being harmed by Canadian imports.

"Right now, the American softwood industry is working at almost 100 per cent capacity," he said. "Prices are higher than they've been in 20 years. There is no injury."

Dan Ujczo, a trade lawyer with the firm Dickinson, Wright in Columbus, Ohio, says Trump came to office vowing to eliminate unfair trade practices, and he's following through in advance of formally kick-starting the talks to renegotiate NAFTA.

"Softwood and (dairy) supply management are top on the list with Canada. As we expect NAFTA [talks] to launch in the coming week to 10 days, that is the opening salvo." 

Trump, he says, needs the support of key members of the Senate finance committee to approve any changes to NAFTA or other trade agreements. And nine of the 26 members on the committee, including its ranking member, Democratic Senator Ron Wyden of Oregon, are from softwood producing states.

So Canada's become a convenient international target for Trump's hardline rhetoric intended to impress his supporters at home.

For now, the Trudeau government believes the best response is to try to separate fiction from facts. To respond only to what Trump does.

With softwood lumber, that work begins now.

About the Author

Chris Hall

National Affairs Editor

Chris Hall is the CBC's National Affairs Editor and host of The House on CBC Radio, based in the Parliamentary Bureau in Ottawa. He began his reporting career with the Ottawa Citizen, before moving to CBC Radio in 1992, where he worked as a national radio reporter in Toronto, Halifax and St. John's. He returned to Ottawa and the Hill in 1998.

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