Canada vs Trump. - And the Deal goes on...

This isn’t over.

U.S. President Donald Trump likes to win. He also often likes to play
make-believe. He has a habit of declaring victory on social media based on few
discernible facts, or none at all.

When he has something to market, he markets it. When he doesn’t, he’s liable
to fake it until voters believe that he’s made it.

How many times has he announced that Iran is finished? That a peace deal is
imminent? That the Strait of Hormuz is open, oil has never stopped flowing and
Oceania has always been at war with Eastasia?

I can’t count that high without an abacus.

The former reality TV star also loves to engineer a cliffhanger. Hence his
decision to build a tariff time bomb – a 50-per-cent levy on $28-billion a
year of Canadian exports – and set it to go off at 12:01 a.m. on Aug. 19.

And then, just in the nick of time, he announced that all was saved, and he
had defused the device.

Less than two hours before midnight, he wrote on Truth Social that the
threatened tariffs were paused because, “Canada and the U.S.A., subject to the
finalization of documents, have a DEAL!”

Prime Minister Mark Carney’s presentation of the situation, published an hour
later, was rather more circumspect.

“Substantial progress has been made,” the PM wrote, “although there is
important work still to be done.” He added that the U.S. had agreed to pause
the tariffs because “this work is ongoing.”

Recent days of intensive talks between Canada and the U.S., like the months of
not-much-talks that preceded them, have been marked by an extreme level of
opacity. Neither Ottawa nor Washington has itemized in public what demands the
U.S. has made of Canada, what Canada has asked of the U.S., what has been put
on the table by both sides and what horse-trading has taken place.

And yet there are many things we know.

We know that Mr. Trump wants most imports, including from his partners in the
United States-Mexico-Canada Agreement, to be subject to U.S. tariffs. He’s
made exceptions for products such as oil and potash – he doesn’t want to
visibly raise the prices Americans pay for gasoline or food – but he appears
set on subjecting manufactured imports to tariffs.

That is a rather large problem for the integrated North American auto
industry, and many other Canadian industries.

He also wants the rest of the world to meekly accept his tariffs and not hit
back. Mr. Trump hasn’t appreciated that Canada, unlike almost every other
country, put up its dukes and retaliated.

But retaliation has given us negotiating leverage.

In the face of Mr. Trump’s demands for tariff acquiescence, Canada’s trade
negotiators appear to have spent months ragging the puck. They had reason to.

The USMCA is a binding legal agreement, signed by Mr. Trump and ratified by
the U.S. Congress. Standing on it makes sense. The President appears to want
Canada to accept treaty-violating tariffs, and for Canada to agree to a
rewrite of the USMCA that would render Mr. Trump’s treaty violations
treaty-compliant.

That said, Mr. Trump could also do with a political win. Or at least something
he can market as a win.

Right now, American voters have 99 problems with his administration, and a
trade war with Canada ain’t one. If he can turn a trade war most Americans
have never heard of into a claim of trade victory, it might subtract from the
list of reasons to vote against his party in November.

The only specific detail Mr. Trump mentioned in his social media post
celebrating a trade deal was the alleged possible revival of “the great
Keystone XL Pipeline.”

It’s a long-time Trump obsession. It’s also a project that Canada badly
wanted, but that two Democratic presidents blocked. If Mr. Trump thinks of
restarting Keystone XL as a win for him? Hallelujah.

But there’s something else we know.

Trump trade policy – like Trump foreign policy – has become a dysfunctional
version of Deal or No Deal. It’s Deal and No Deal.

No price is final, even after final sale.

Adversaries and partners have learned that Mr. Trump is not bound by law,
treaty or friendship, and has no compunction about breaking written
commitments he eagerly signed not five minutes ago.

If an interim deal between Washington and Ottawa really is inches from the
goal line, that still leaves a whole trade relationship in the balance –
because this president’s term in office still has 29 months left on the clock.

It remains unclear how this week’s talks connect with broader negotiations
over the future of the USMCA.

Mr. Trump wants to turn what was the world’s most important free-trade deal
into a creature with aspects of one-way free trade. He wants us to agree to
give him the freedom to build tariffs walls against us, while demanding that
we recommit to low or no tariffs against the U.S.

That’s why this isn’t over. It won’t be so long as that man is in the White
House.

Tony Keller
G&M