If NAFTA negotiations fail and U.S. President Donald Trump lashes out against Canada on trade, Ottawa shouldn’t hesitate to fight back, two members of the federal NAFTA advisory panel said.
Former interim Conservative leader Rona Ambrose, a member of the cross-party NAFTA advisory panel, said she fears that if a deal isn’t made, Trump could target Canadian industries such as dairy, wine, aerospace engineering and the auto sector.
Trump’s motivation, Ambrose suggests, may be the looming midterm elections this fall, where Democrats have an opportunity to claw back control from Republicans in the U.S. House and Senate.
Ambrose points out that plenty of Trump’s support in 2016 came from auto workers in the Rust Belt. If the White House can’t use NAFTA to make good on Trump’s campaign promise of bringing back auto jobs, Ambrose said the administration may try a different avenue.
“I think we’re going to see Trump use trade action through the commerce department aggressively to get what he wants if he can’t get it through NAFTA,” Ambrose told CTV’s Question Period.
Trump has floated the idea of slapping a tariff of up to 25 per cent on autos imported into the U.S., going so far as to ask U.S. Commerce Secretary Wilbur Ross to consider the idea.
The threat came the same day Trump described Canada and Mexico as "very difficult to deal with" and "very spoiled" in regards to NAFTA talks, which have yet to find common ground after nine months behind closed doors.
Prime Minister Justin Trudeau quickly denounced the proposed tariff, saying it would also hurt the U.S. auto sector. Industry experts have also questioned the move, pointing out that it would jack up prices for American consumers.
If NAFTA negotiations crumble and Canada faces a hardline from Trump, Ambrose says the Liberal government needs to be firm.
“We have to protect our interests, there’s no doubt about that,” Ambrose said.
“We have to hit back every time we get hit. And that is part of what you do as a sovereign country. This is about a trade war and that is unfortunate.”
Rules on autos have been a sticking point in NAFTA negotiations. The U.S. has reportedly pushed to restrict duty-free status to vehicles only if they have greater parts made in America and North America.
Ambrose said that, for the sake of avoiding an all-out trade war, everyone should hope for an auto deal “as quickly as possible.”
Unifor President Jerry Dias, who has closely followed negotiations in Washington, agrees that Canada needs to be tough.
“We need to hit back hard, and we haven’t, in my opinion, fought back hard enough,” Dias said.
Dias also suggested that Canada should consider slowing down supplies of natural resources to the U.S. to demonstrate just how much Americans rely on Canadian goods.
“We can’t just keep taking it on the chin and say, ‘Ouch, that hurts,’ but then not retaliating. We’re a nation rich in raw materials and natural resources. The United States need us as much as we need them.”
Both Ambrose and Dias agree that a trade war between Canada and the U.S. could begin before the summer if a NAFTA deal isn’t made.
