The Imperial Presidency, Part 2

[robkelk]

Trade deal became untenable when U.S. 'asked too much and offered too little'

The prime minister revealed that the U.S. had issues with Canada's subsidies for French culture; the prevalence of French-language media online and even the requirement to have bilingual labels on products sold in Canada.

"It was unacceptable right from the start, but the Americans kept trying and trying and we said no," Carney said. "Ultimately it's simple. That was never on the table for Canada and it would not have been acceptable to Canadians."

Ontario Premier Doug Ford welcomed Carney's decision to abandon negotiations and insisted Canada would win a trade war with the U.S. because Canada is united and prepared for a fight.

"I'm glad he didn't sign that deal because it was a bad deal," Ford said in Toronto on Saturday. "It was a bad deal for Ontario. It was a bad deal for the auto sector, the steel sector and the manufacturing sector."

The premier said Canada needs to inflict pain on the U.S. to remind the Trump administration that Canada is its best customer and should be treated as such.

The U.S. team also wanted to introduce measures into the pact that would significantly undermine Canada's sovereignty, the prime minister said.

"The U.S. introduced, in the last hours, efforts to restrict our ability to have other trade deals," Carney said. "Because we believe in free trade, we're the partner of choice, in many respects, for countries around the world, and Americans wanted to restrict that, they had language to restrict that. Unacceptable."

Carney said the effort to try to squeeze more concessions into the deal at the last minute derailed months of negotiations.

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CBC Analysis: Mark Carney doesn't stop the United States from driving negotiations over a cliff

Other countries might quibble, but they might agree that the U.S. is no longer to be taken for granted — that it can no longer be taken for granted that the U.S. will stand by its traditional allies, that it can no longer be taken for granted that the U.S. will abide by its own trade agreements, that it can no longer be taken for granted that the American political system will produce presidents like those who governed between 1932 and 2016.

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CBC Analysis: How Trump's tariffs work to redistribute wealth up the food chain

One of the main effects of tariffs within the U.S., economists say, has been to cause a massive transfer of wealth from the poor and middle class to the wealthy and well-connected corporations.

And in that sense, the tariffs fit in with the overall (unstated) economic thrust of the Trump administration and the Republican Party, which has used tax policy to achieve the same ends.

"This is consistent with other current trends. Red states in the U.S. are facing co-ordinated efforts to reduce income taxation and to increase sales taxes, which would have similar effects," said Veljko Fotak, an associate professor of finance at the University of Buffalo's School of Management in New York.

The effect is so strong that some economists have suggested the real target of tariffs is not "foreign cheaters" at all but rather the principle of progressive taxation in America.

"Tariffs effectively tax consumption, and lower-income households consume a bigger proportion of their paycheque," Fotak explained. "Taxing consumption sounds fair, until you realize that Warren Buffett and Elon Musk 'consume' a minuscule proportion of their income and an even lower proportion of their wealth."