A view from Winnipeg: Finding new markets and mitigating U.S. tariffs

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This editorial appeared Saturday in the Winnipeg Free Press (winnipegfreepress.com), in advance of the executive order on tariffs that President Donald Trump signed later that day.

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Canada’s premiers and the federal government can be forgiven for trying — and at the moment, most likely failing — to stop U.S. President Donald Trump’s 25% tariffs on exports from Canada to the U.S.

It was never about border security. Nor, really, about trade deficits.

It might well be about the windfall Trump expects to get from levying what could effectively be called a tariff sales tax on American consumers so that he can deliver promised income-tax cuts to his supporters.

Trump’s love for a fractured economic theory that manufacturers, not consumers, end up paying for the cost of import tariffs, and his belief that tariff is “the most beautiful word in the dictionary” was always going to rule the day.

It will be interesting to see what happens to Midwestern farmers who need potash-based fertilizers — 46% of Canada’s potash exports go to the U.S.

But that’s only half the story — the other half is that the United States gets 87% of its potash from Canada. And agriculture trade publications have already predicted that the cost of a 25% tariff will wind up with fertilizer users, not with Canadian companies that produce the potash.

And the growing season didn’t have to be upended by Trumpian executive orders.

We already have signed trade deals with the United States, deals that were in fact signed while Trump was last president. (In case he doesn’t remember, he himself lauded them as “the fairest, most balanced, and beneficial trade agreement we have ever signed into law.”)

Clearly, they’re not worth the paper they are printed on — and we have to expect that anything Trump says now is just as transitional into whatever else he decides to do at any time.

There is no longer a separation of powers in the United States, there are legitimate doubts about the independence of its judiciary, and there is no guardrail in the legislative branch.

Trump’s own business record gives no comfort, either.

The current commander in chief, unfortunately, has a long record as a commander of cheat.

There are scores of businesses that have come forward with their stories about having signed contracts for work with Trump businesses who end up being paid a fraction of what they’re owed, and having to eat their losses, sometimes at the cost of their own companies. Paying pennies on the dollar has been a Trump corporate trademark.

And that’s not likely to change. Some may see that as a shrewd business tactic: truth is, it’s both cheating and lying.

We should expect nothing different in the future.

Canada’s goal now should be to make the most of a horrible situation — dealing with a trade war we didn’t start, with a neighbor with great powers, is a daunting situation. We will most likely answer with tariffs, while businesses on both sides of the border clamor for the kind of stability and order they need to make business and investment decisions.

But most importantly, we have to diversify our markets as quickly as possible, so that we no longer find ourselves in this situation again — even after Trump moves on. Take potash: it’s a product needed in China and India, and also Brazil. Let’s sell it somewhere else.

Think about this: Even if the federal government and the provinces find a way to avoid the new tariffs or get them removed, while in the short term we might be in a better position, we will not be in a safer one.

Because what President Donald Trump committed to yesterday has absolutely no connection to what he will do tomorrow.

And when you make a deal to pay a blackmailer, unfortunately, you’ll find out that you’ll being paying for your entire life.