Trump’s Auto-Tariffs: Form Formal Sovereignty to Substantive Sovereignty
The danger confronting Canadians is not President Trump’s on-and-off tariff toggle. That’s only a symptom. The more significant threat is our deep integration with, and hence dependence on, the US. This has compromised our formal sovereignty and will continue to block our substantive sovereignty – the democratic capacity to choose our own directions without external (i.e., US) pressures.
Ending the tariff assault may satisfy those whose only ambition is access to the US market. But for Canadians who see Canada in larger terms, that in itself would only confirm our tighter embrace with the US. It’s to be remembered that in the mid-80s Canadian elites, both business and state, initiated and formalized a free trade agreement with the US. Populist forces, after first following the elite’s lead, came to argue that we were already too over-dependent on a socially ‘unattractive America’.
Paradoxically, we are today even more integrated than back then. And the United States is an even uglier place and US protectionism even more aggressive. A focus limited to ending Trump’s tariffs is effectively asking to confirm Canada’s integration into the US.
Free Trade With the US
The legal foundation of our current trading relationship with the US (and Mexico) is the US-Mexico-Canada trade agreement (USMCA) in 2018. Its negotiation was not only overseen by Trump in his first presidential term but also hailed by him as “the most modern, up-to-date, and balanced trade agreement in the history of our country.” Why then did Trump go rogue and breach the agreement he so enthusiastically praised?
It can’t have been Canada’s trade imbalance in the auto sector. Our auto trade with the US is in rough balance. Canada has an overall small trade surplus with the US, but if energy-related products are excluded – a trade which the US very much wants in order to keep US oil prices contained – the surplus disappears. What then is Trump allegedly after?
Apparently, his bugaboo is not about trade balances but, as hard as it is to believe, Canada’s alleged insufficient vigilance in fighting fentanyl crossing into the US from Canada. That there is no credible evidence to back this charge is par for the course with Trump. But far from being defensive, the comeback should be what has the US, with its drug problems on a scale unmatched by any other developed country, been doing over the years to address this at home? Why such lax regulations on Big Pharma’s profiting from addictive drugs? And what about the causes of the tragic widespread despair – the implications of extreme inequality and lack of social and medical support that Trump is acting to worsen?
Still, there is method in Trump’s madness and there-in lies the real danger. Creating permanent insecurity among trading partners – which Trump is very good at – may, for ‘just-in-case’ reasons, bias investors to locate future investments to the US. Unifor President Lana Payne goes further in accusing Trump of directly trying to “extract commitments from the companies to divest from Canada.”
Some may see relief in Trump’s recent partial retreat. The retreat was not driven, however, by good-will toward its neighbours, nor by the retaliation of its generally compliant neighbours of Canada and Mexico. It was, rather, a response to the pressures coming from the American auto companies, a corporate constituency that Canadian workers can hardly trust with our future.
Trump’s Desire to Expand US Power
Some argue that what we are witnessing is, perhaps, something even deeper: the rejection of the premises of the post-war US Empire. Those premises understood that integrating the old colonial empires, expanding capitalism, and containing competitive nationalisms, required commonly accepted trade rules, even if exceptions were sometimes ‘necessary’ and managed to balance trade and support development. Trump on the other hand, is declaring that only one reality matters – US power. Though his unilateral exercise of US power may eventually be reigned in, the negative impact on even US allies, and workers in many states, is already proving to be profound.
“soberly delinking from the US, to control capital movements and to develop a more egalitarian and democratic economy, keeps alive the possibility of a substantive and creative sovereignty”
Either way, even if Canada escapes from the current tariff barrage, the lesson is that threat of the US belligerently using its predominant economic power should Canada go beyond what the US state considers legitimate remains. Substantive sovereignty – the capacity to make democratic decision with respect to economic matters without limits imposed by a foreign power – demands initiating a project of sober delinking from the US economy and capital.
We should come to this with no illusions about how difficult this will be. Our over-dependence on the most powerful country in the world guarantees that breaking slowly away, even partially, will involve uncertainties, disruptions, and sacrifices. Yet, against the compromised sovereignty we now live with, the project of soberly delinking from the US, to control capital movements and to develop a more egalitarian and democratic economy, keeps alive the possibility of a substantive and creative sovereignty. It also says to the world – and to the US – that if even Canada is ready to stand up to US unilateralism, so too can all states. •
Originally submitted to the Toronto Star as an op-ed but rejected.
