As Ottawa prepares its trade response to U.S. president-elect Donald Trump’s threat of placing sweeping tariffs on Canadian goods, one expert says retaliation from Canada or any other nation Trump targets should come as no surprise to the incoming administration.
“I think that should be expected on the American side. I think all of the proposals that the Trump administration is likely to roll out in the coming weeks when it takes office are going to be met with retaliations across the globe,” said Brian Gardner, chief Washington strategist at Stifel.
“Whether it’s Canada, whether it’s China, whether it’s the EU (European Union), I think it’s part of the negotiating process on reaching new trade deals and new accommodations on trade around the globe – Canada’s not going to be any different than that.”
Gardner made the comments in an interview with BNN Bloomberg on Thursday, a day after Bloomberg News reported that Canada has created a preliminary list of $150 billion of U.S.-manufactured products it will hit with tariffs if Trump makes good on his tariff threats.
Trump has threatened to place a 25 per cent tariff on Canadian imports on his first day in office. He’s set to be inaugurated on Monday.
Since Trump first made the threats last year following his election in November, there’s been near-constant speculation about how seriously they should be taken, as some experts have suggested Trump is mainly using them as a negotiation tactic.
Gardner argued that Trump’s rhetoric around trade with Canada comes with “a significant amount of bluster,” as making “big, bold, audacious” statements has always been a part of his political brand.
“But you should take him seriously. During his first term, there was a lot of bluster, but he followed through on a lot as well,” he said.
“I think it’s an opening bid in a series of negotiations with various trading partners and so this is something that should be taken seriously.”
‘Conflict within’ Trump’s administration
Gardner said that while Canada and other countries should prepare for Trump to rollout tariffs as promised, it’s still unclear what exactly Trump will do on the trade file once he returns to the White House next week.
“There’s not a lot of intel, firm intel, to talk about what exactly they’re going to roll out. There have been a series of news reports out that it’s going to be a gradual process of ramping up tariffs, phasing them in over time,” he explained.
“Part of that has to do with (the fact that) there is a split within his incoming administration and the Republican party. There are plenty of Republicans who continue to (support) free trade, they don’t like the tariff threats, and a lot of those people are in his administration.”
Gardner said that there are also plenty of people within Trump’s economic team that support the idea of levying broad tariffs on imported goods, which has created a “conflict within the administration” that has yet to be resolved.
In its attempt to fight back against proposed tariffs, Gardner said Canada may be able to leverage its “enormous trading relationship” with the U.S. – a relationship many Americans, including Trump supporters, rely on and benefit from.
“I do think it gives Canada a tool in the negotiations going forward. When you look at what parts of the U.S. are going to be particularly hit with Canadian tariffs and price increases on Canadian goods, it’s going to hit Americans that are kind of part of that Trump base,” he said.
“I think he is somewhat sensitive to that.”
With files from Bloomberg News