How should Canada respond to Trump's tariffs?
Good fences make good neighbors, but arbitrary tariffs aren't good fences
Nerd out with me for this latest episode of The Professor Is In as I dig even deeper into the latest tariffs on Canada, answer subscriber questions, and respond to my comments section.
I address the suspicious timing of these tariffs, break down the confusing dairy tariff-rate quota, and argue that total US-Canada dairy trade — about a billion dollars against hundreds of billions in overall trade — isn't worth blowing up either economy over.
On whether Canada should retaliate, I cite Joan Robinson's "rocks in the harbour" metaphor: much of a tariff's cost lands on the country imposing it, so matching Trump would mostly hurt Canadians.
Finally, I discuss the biggest issue: trust. Once a president established a pattern of tearing up deals he signed, the value of his next signature is zero — and that discourages the deep, long-run cross-border investment that has defined North American trade over the past several decades.
Can trust be rebuilt in a post-Trump world? That remains to be seen.