Canadian government went to great lengths to argue that U.S.
trade protection would not only hurt Canada but would also
hurt the United States by raising prices for American
consumers, thus making economic recovery more difficult.
Over the next few years, protectionist sentiment gradually
declined and the merits of freer trade appeared to be more
widely accepted. But things changed dramatically in the United
States with the election of President Donald Trump in 2016.
Donald Trump’s election campaign was full of both
protectionist and nationalist rhetoric, and within his first term
in office much of this rhetoric was reflected in U.S. trade policy.
In 2017 President Trump threatened to repeal the North
American Free Trade Agreement (NAFTA) and forced a major
renegotiation of the Agreement with Canada and Mexico. In
2018, the United States imposed new tariffs on imported steel
and aluminum, a policy seen by many to be primarily aimed at
low-cost Chinese producers. This action led China to
immediately impose tariffs on a range of imported U.S.
products. In return, the United States imposed more tariffs on
other Chinese imports. A tariff war had begun between the
world’s two largest economies.
Other countries, including Canada, watched these
developments unfold with alarm, as the stark lessons from the
Great Depression were recalled. Canada stands to gain much
from an open global trading system; we stand to lose a great