Victor Davis Hanson: The US Has Entered Stage 3 in the Trade War With Canada

Editor’s note: This is a lightly edited transcript of today’s video from Daily Signal senior contributor Victor Davis Hanson. Subscribe to our YouTube channel to see more of his videos.

Hello, this is Victor Davis Hanson for the Daily Signal. 

The philosopher Heraclitus, an ancient Greek philosopher, once said that you don’t step into the same river twice, meaning the river flows. Other people look at that quote and said he meant panta rhei, everything flows or changes, although he didn’t necessarily say that himself. 

Everything changes. That applies to our current U.S.-Canadian spat. We were given an initial description in the media, and then we had some clarification, and now we’re in what I would call Stage Three. 

Stage One was outrage at Donald Trump and the United States, and this is the narrative that we got from one side, from Mark Carney. He said the Americans are at it again, and Trump in particular. They’re bullying us. They’re demanding that they’re gonna take away our sovereignty, and they’re saying to whom, and with whom we can trade and with whom we can’t.  

And then, they wanna squash Canadian nationalism, and they want to suppress indigenous reading, literature, influence in the French language, and we’re not gonna do that. So we had to back out. 

So, everybody got very angry. The Wall Street Journal said: This is a silly Trump spectacle right on the eve of the midterms. This is crazy. 

And then we went into Stage Two: clarification. People in Canada, 90%, supported Carney. They were booing the American “Star-Spangled Banner” when it was played at sporting events in Canada. And they started to informally boycott U.S. products. 

And then they stuck out their chest and said we might not give four million barrels of oil to the United States from Canada. We may stop our pipeline. We can do all of these things to the United States. They need us. And the world is against Trump. And our prime minister can deal with China if he wants. He prefers China. 

So, we heard all that, and then we found out that the deal was almost cemented, and Carney brought up his objections at the last moment. 

Then we found out the United States did not wanna suppress the French language or Indigenous culture in Canada. It just said our digital media companies operate worldwide. Why, in this particular country of Canada, should they pay a 5% surtax on top of charge, in addition to income tax, just to subsidize for the particular agendas of the Canadian government? 

We don’t do that to Canada. We don’t say, “If you come into the United States and you have a product or a media conglomerate, we’re gonna slap a 5% so we wanna promote DEI, we want to promote poor white people in East Palestine.” We don’t do that. 

Then we find out that we don’t want to take away Canada’s sovereignty. We are in an existential struggle to save the West from Chinese mercantilism. They have been dumping product. They have been manipulating currency. They’ve been stealing patents. They don’t respect copyrights. They run up trillion-dollar surpluses with us, half a trillion with Europe, and we’re saying no more. We want symmetry. 

And [China], to get around that, is dumping cheap steel and aluminum and saying to Canada, “You can buy our product very cheap, much cheaper than you can produce it. Then you can use it in your assembly of cars and trucks and other manufactured goods and send it into the United States and undercut American producers. You win, and then we get around the American tariffs.” 

And Trump and his team said, “No, we know what you’re doing.” 

So, that was a clarification that didn’t look too good. 

Then people said, “Well, wait a minute. Canada can’t even send its oil, highly sulfurous and thick tar sands, to Ontario or to British Columbia because the provinces are so at each other’s throats under this weird system that they don’t. They have almost autonomy with one another, and they won’t let pipelines be built. But the Americans will let it be built.” 

So, they need the 4 million-a-day export. After all, if Canada’s doing so well, why don’t … Alberta said, “We can’t give you our oil. We need it. We’re booming. That’s what we’ve been told. 

“Why would we give it to a booming United States that already is the greatest producer of gas and oil in history and self-sufficient, unless it’s in our interest? It’s right across the border. The United States treats us better than our other provinces treat us. They allow a pipeline into a foreign country, i.e., the United States. Our other provinces don’t allow Alberta to do that. 

“And, by the way, they allow a pipeline then to go into Quebec and Ontario. If we cut off their pipeline, they’ll cut off two of our provinces.” 

And then the jobs report came out. We’ve only been at this 10 days, but it already affected the August jobs report. They said, “We didn’t need the United States.” Well, they’re down 41,000 jobs. And we can hurt the United States? The United States is up 160,000 jobs. 

And so now we’re in a crisis. How does Canada get out of this situation? Because they walked out of a deal that was better than basically any other deal the United States had cut with other countries, and it was only one of two countries. The other in the same league was communist China that retaliated against the United States. 

The others admitted, “Aw, shucks. We know we’ve had asymmetrical tariffs with you for a long time. We understand this is a reckoning. Let’s kind of moderate it and don’t get too hysterical that we’ve been taking you to the cleaners on trade.” 

OK. Not Canada. Canada immediately started retaliating like China. OK. 

And now they’re in Stage Three. What is Stage Three? Stage Three is the Americans are saying to themselves: 

Well, we have 13 times the economy that Canada does, and we have nine times the population, and we have one state, California, that has about the same population as all of Canada.  

And of all of our states, it’s the worst run, the most socialist, with the most inept governor, and usually with the highest social welfare costs, the highest taxes, the highest unemployment, the highest inflation, the highest power. And guess what? It has double the gross domestic product of Canada, even though there’s the same population. Double. 

And then the Americans are saying: 

We don’t want—we don’t need your oil. We can produce your oil. We’d like your oil. It helps you. It helps us. But if you don’t wanna cut us off, cut us off. And we’d like to trade with you, but you know what? If you don’t wanna—if you wanna help Canada get around our tariffs, and we understand that, just don’t do it. 

And the subtext behind all of this is the United States is fed up. They’re fed up with countries that said for 30 years they were gonna protect themselves and help NATO, and the most egregious offender in the last 15 years has been Canada. 

It’s basically said, “We’re not gonna spend 2% because we can’t spend 2% because we have a social welfare system, and we have 45% of the country in need because they are either foreign-born or the parents of foreign-born. And we have a wide social safety net that is not sustainable by our neo-socialist economy, so we have to get the monies somewhere else, like running a $60 billion, $50 billion, $70 billion surplus with you and having you protect North America for us. And that’s just the way it is. You’re big, we’re small, but we can’t admit that, but that’s what we want.” 

And then we have, on the other side, Mexico saying to us, “Well, we’re gonna run a $200 billion surplus, and we’re gonna let products from China come in below cost, reassemble them for China, and work with China to get around your tariffs. 

“And, by the way, we’re gonna make $30 billion by sending fentanyl, with Chinese help, the raw product, into your country, and we’re gonna kill 70,000 Americans a year. 

“And if that’s not enough, we’re going to send, about two to three million illegal aliens during the Biden administration and allow the transfer or transmission, transference of another six or seven million through our country and wave them into your country. 

“And then we’re going to count on $65 billion of remittances to be sent back to us, and we want these people that come into your country illegally to be liberally funded by you, or we’re gonna call you racist. 

“So, we want free housing, we want food subsidies, we want legal help, we want education, so they can free up $200 or $300 a week and send it to us because we don’t care about our own indigenous people. We don’t want them. That’s why we send them to you, and we want you to subsidize them, so they can send the money back to us.” 

And finally, Donald Trump, reflecting the anger of the middle of the American people, said, “This is stage three. We’re tired of it. We’re sick of it. All we want is symmetry. We’re not the powerful United States of 1946, where we supplied the world with products, we saved everybody in World War II, we won the Cold War … We’re tired. We just want symmetry and equality.” 

And Canada better realize that, that the American people are getting fed up, and we don’t want any moral lectures about how awful we are when you run up a $50 billion surplus, and you only last year, you may or may not have made a 2% meager contribution to the defense of the West and North America in particular. 

And then don’t tell us that we’re doing you favors. You’re doing us favors by selling your oil to us, and that if we don’t have the oil, we’re going to starve in our power generation. It just isn’t true. 

We wanna have good relations, but we’re saying enough is enough. You in the North and Mexico in the South, we’re all gonna get along better if we’re all robust and we’re autonomous and we’re independent. 

But we don’t like dependent countries that embrace socialism, and then they mask their failures by having us subsidize you. That’s all. 

Stage Three. I hope Canada wakes up. 

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