As Premier Scott Moe makes the rounds in Washington attempting to negotiate an end to the Trump tariff threat, the U.S. administration announced 25 per cent tariffs on all steel and aluminum imports—including from Canada. Trump also floated the idea of imposing a 100 per cent tariff on Canadian-made cars, a harebrained scheme which would effectively destroy the integrated North American auto industry. 

We would hope this unhappy coincidence might make Premier Moe question some of the assumptions he has been operating under since the tariff threat began. There is no doubt that Moe—like many other Canadian politicians, notably Alberta Premier Danielle Smith—believes there is a way to negotiate out of the tariff threat. That if Canada just adopted the right policies, they can successfully placate the Trump administration and our trading relationship can return to normal. Premier Moe has even opposed the use of broad retaliatory tariffs, perhaps believing that any escalation will derail the potential for negotiation. 

These beliefs rest on the assumption that the U.S. tariff threat is a mere bargaining chip—a means to an end and not an end in itself. There is no doubt that the Trump administration has been hard to pin down on what it ultimately wants tariffs to do. In the Canadian context, the administration has used the tariff threat to demand increased border security against illegal drugs and irregular migration, cross-border banking competition, and the dismantling of Canada’s supply management system in the dairy industry. 

But to imagine that this is the sole purpose of the tariff threat is to fundamentally misunderstand how the Trump administration views tariffs as an integral weapon to accomplish many of its domestic and foreign policy goals. Canadian political leaders who fail to understand this will continue to be caught in a vicious cycle of placating the Trump administration in a futile attempt to return to a free trade system that the administration has no desire to return to. 

Different factions within the Trump administration all view tariffs as an essential tool in pursuit of their various goals. One faction, represented by Trump economic advisors like Stephen Miran, Chair of Trump’s Council of Economic Advisors, Robert Lighthizer, former Trump U.S. Trade Representative, and even Vice-President J.D. Vance, all believe that the current global trading order, instituted after World War Two, no longer serves the country’s interests and actually disadvantages U.S. trade relative to other countries. 

Other countries, they believe, have exploited the United States’ “generosity” of relatively open markets to adopt export-oriented industrial strategies that cause persistent U.S. trade deficits. They view tariffs as an essential economic weapon to rebalance these “asymmetric trade conditions.” More specifically, they believe in employing tariffs to improve “the competitiveness of American manufacturing, and thus increasing our industrial plant and allocating aggregate demand and jobs from the rest of the world stateside.” 

In effect, their strategy is to use tariffs as the stick that entices investment and production jobs back to the United States from other countries—Canada included. 

Lighthizer explains that the Americans will use tariffs to institute a new, balanced trading regime, rewarding those countries that pursue trade balance with the U.S. with lower tariffs, while punishing those that continue to pursue trade surpluses with the U.S with higher tariffs. In both scenarios, tariffs are an essential part of this new trading system—there is no quick return to free trade in the minds of these advisors. 

Another faction, represented by Trump Trade Advisor Peter Navarro, sees tariffs as a way to transform the American economy from one that is “over-reliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenue and the External Revenue Service.” 

Both factions believe that the Trump administration can institute tariffs and manage inflationary pressures through a mixture of currency manipulation and tax cuts and deregulation. 

There is also the more national security-focused view that sees tariffs as a way to re-shore strategic industries and supply chains. This perspective views dependence on friendly-nations or allies for strategic resources as a source of weakness and dependence. As a Commerce Department’s report on aluminum highlighted during the previous Trump administration, the United States had only one smelter producing high-purity aluminum for critical infrastructure and defense applications. “Imports from allies should not be relied upon in order to ensure domestic production facilities are sufficient to meet U.S. national security,” the same report concluded.  

Even if there isn’t consensus within the administration on what tariffs are supposed to accomplish, all camps view the continued use and threat of tariffs as an essential tool. 

Interestingly, Miran warns that the one action that might upend the benefits of tariffs for the United States is the enactment of substantial retaliatory tariffs by other countries that could add profound costs to the U.S. economy. 

It bears repeating—the one weapon that Trump officials see as potentially derailing their tariff war is the weapon that politicians like Moe and Smith refuse to wield. 

The more savvy of Canadian conservatives are openly acknowledging that tariffs are here to stay. Former Harper Advisor Sean Speer and Rudyard Griffiths warn that the tariffs “aren’t a means to an end. They’re ends in themselves. The real motivation is to put an end to borderless trade on the continent and pull production from Canada and Mexico back into the United States.”

Dyed-in-the-wool conservatives like Scott Moe and Danielle Smith are likely already privy to this analysis—which begs the question of why they are still fixated on negotiations rather than retaliation. Premiers Moe and Smith are either woefully naive about the Trump administration’s attachment to tariffs or actively preventing the use of the one economic weapon that has the potential to deter the tariff threat. Either way, they aren’t helping.