‘Burn down their house’: Bay Street veteran weighs in on tariff response

Founder of Rosenberg Research David Rosenberg reacts to the implementation of tariffs from Trump and why he says this mistake could cost the U.S. greatly.

Bay Street veteran David Rosenberg says that Canada has more leverage in its trade war with the U.S. than many experts think, and when it comes to hitting back against Donald Trump, there’s one thing Canadian officials should focus on above all else: his approval rating.

“If you were going to ask me what the best way is to get this to all end, it’s to create the conditions for his approval ratings to go down,” Rosenberg, founder and president of Rosenberg research, told BNN Bloomberg in a Thursday interview.

“That’s why I think (Ontario Premier) Doug Ford, what he’s been saying has been great; export taxes on electricity or an outright ban… I’m surprised that Alberta and Saskatchewan wouldn’t do the same thing, because where’s the U.S. going to be getting its heavy oil, Venezuela?”

Rosenberg’s comments came two days after the U.S. president officially made good on his threat to impose sweeping tariffs on Canada and Mexico, kicking off a fast-escalating trade war.

Ford said on Thursday that in response to U.S. tariffs, Ontario is prepared to double a 25 per cent surcharge on electricity exports to three U.S. states if Trump introduces additional tariffs on Canadian goods on April 2.

‘Burn down his house’

Rosenberg said he supports direct retaliatory action from provinces and added that the federal government should be prepared to provide them with support through fiscal stimulus, which would likely have broad support from Canada’s legislature.

“We do have actually ample fiscal room at the federal level to cushion the blow to the provinces that would take this action, but I come from the mentality that when the bully in the schoolyard gives you a black eye, you don’t punch back, you go burn down his house,” he said.

“There are a lot of things that the U.S. cannot substitute away from where we can inflict quite a bit of pain… we’re David in this David-and-Goliath economic war, and that’s what it is, but remember David won that war. We have more leverage than people think.”

Despite that leverage, he noted that the many pleas from Canadian officials to their U.S. counterparts over the past few weeks likely didn’t play a role in Trump’s decision to push back tariffs or create carve-outs, as he did Wednesday for the auto industry with a one-month delay.

“If you think that Donald Trump succumbed to pressure because of Canada or Mexico, no, he’s openly saying that they’re doing this reprieve so that the automakers in the U.S. can bring their assembly lines into the U.S.,” he said.

“Now, I don’t see how that’s possible in a one-month span, but for people that think, ‘oh my god, this is great news for Canada, a one-month reprieve,’ get your head out of the sand. He only did it to protect the U.S. (auto) industry.”

‘Hit back hard’

Rosenberg argued that perhaps the only way to get Trump to back down from his promised levies is for Canada to inflict economic pain on states that helped him return to the White House, as that might be enough to get Republican lawmakers to speak out against him.

“What makes Trump different is that people are scared of him. His own party is scared of him and Congress is scared of him… but we can hit back, and we can hit back hard,” he said.

“If we hit back hard, especially in the red states… these House Republicans and Senate Republicans will no longer be scared about Trump, they’ll see exactly what’s happening, and all of a sudden what’s going to disappear is the big, beautiful budget bill that Trump wants to get passed.”

‘Greenland on steroids’

Rosenberg said that if Canada were to limit or completely cut off the flow of critical minerals and energy products like electricity, natural gas and oil to the U.S., Trump’s popularity would take a massive hit.

“(As for) critical minerals, there’s 34 of them that Donald Trump is coveting, that’s why he wants us as the 51st state, no different than why he wants Greenland, and we’re Greenland on steroids,” he said.

“So that’s where you hit back, you hit back by doing whatever you can to get his public approval ratings down, because that is when his supporters will start to abandon him, and that’s when all this ends.”

With files from CP24.com’s Chris Fox