Canada has already picked a losing strategy for Trump’s trade war
With a newly elected left-wing Mexican president, a tariff war in full swing, and hopes fading for the ongoing NAFTA negotiations, it’s time to remind ourselves of economic and strategic issues related to free trade.
Retaliation against President Donald Trump’s tariffs is ultimately a failing strategy, especially for small countries like Canada. We might feel better defending ourselves with reciprocal tariffs, but the result is shooting ourselves in the foot.
First, let’s remember that while Canada might be the world’s 10th-largest economy, we still only account for less than two per cent of world GDP. We have little influence on world prices for anything except the one or two commodities where we control major market share, such as potash or uranium.