Opinion
It was only a matter of time before tariffs became a reality for Mexico, Canada, and China. While the U.S. president was talking about fentanyl and illegal immigration, he was really focused on something much more concerning for Canada: structural monetary change.
Many people continue to think about Trump 2.0 as if it’s 1.0, and it’s not. In Trump 1.0 everyone said read Art of the Deal, which was a textbook on getting a renegotiation of NAFTA, which became CUSMA (USMCA).
Trump 2.0 is an emboldened president with no brake pedals and extremely strong protectionist tendencies looking to break integrated supply chain systems. He is not “just negotiating.” Trump 2.0 requires a different textbook.
Listeners of RealAg Radio will have heard us talk about the required reading of former U.S. Trade Representative Robert Lighthizer’s book No Trade is Free. I read the book shortly after it came out in 2023, and enjoyed the stories in the book but disagreed with many of the premises as I personally see value in trade agreements between allies.
Trump 2.0 is about the restructuring of trade and the attitude that everything America wants or desires can be produced domestically — whether that’s fertilizer, beef, pork, or cars.
In retrospect, it’s no surprise that Canada was given limited key performance indicators (KPIs) on what had to be done on the U.S.’s northern border after February 4th, because this version of President Trump sees Canada and Mexico as stealing market share on the export market, while also shipping products into the U.S. much too easily.
Lighthizer argues that multilateral trade deals like CUSMA undermine national sovereignty, that trade should benefit domestic workers, not just corporations, and it should always prioritize national interests over ideology. In application, this is why Commerce Secretary Howard Lutnick and President Trump don’t see any national interest in buying autos from Canada when that factory could be in the U.S. There is very little regard for the concept of comparative advantage — that one country might be superior at making something or be able to make it more efficiently. (Editor’s note: it’s the very definition of reinventing the wheel)
This ties in with my message to audiences in presentations this winter that “integrated supply chains” is a dirty word with this administration. In Trump 1.0, the pro-trade lobby groups for Canada, Mexico, and the U.S. argued that the system was built to deliver in cooperation. Trump 2.0 is about tearing that system apart and bringing it all to the United States so everyone needs to buy American in the long term. Trump’s theory is countries such as Canada cannot survive without exports to the U.S. and will be forced to be a net importer of goods they used to produce.
Canadian political pundit Matt Gurney put it perfectly on The Line Podcast when he said “many Canadians are still operating in lag time.” We need to wake up to the fact it’s not 2017, and read the right textbook to understand Trump 2.0.
