There’s been a blizzard of commentary about the breakdown of U.S.-Canadian trade talks. Friend of TPM Paul Krugman has a good rundown of just how dependent the U.S. is on key Canadian exports — oil, lumber, hydropower electricity in addition to many other commodities. Of course, the U.S. is a net exporter of oil. But that’s in aggregate. As Paul explains, the details aren’t that simple. The upper Midwest gets most of its oil from Canada while a lot of oil produced in Texas, Louisiana and the Gulf Coast gets exported. These patterns could only be changed over many years and then at great expense. There are similar embedded dependencies on lumber and electricity. Then there are things like potash (for agriculture and some industrial production) where the U.S. gets almost all of its supply from Canada.
Of course, so far this is all hypothetical. Canada isn’t pulling these levers. The U.S. is conspicuously avoiding placing tariffs on these supplies on which it has a critical dependence. But that only highlights U.S. vulnerability. Nothing is stopping Canada from pulling those levers as Trump’s trade war of whim heats up.
What is striking about this picture, setting aside all these nitty-gritty details, is how much it mirrors Trump’s Iran debacle, another war not so much of choice but of whim. Both illustrate the difference between theoretical and de facto power. On paper, the U.S. could convincingly defeat Iran militarily. It could invade the country, dismantle its military and government, eliminate the threats to the Strait of Hormuz. But that would require vast sums of blood and treasure, in addition to huge domestic economic pain, something the U.S. simply has no appetite for. That lack of appetite became clear soon after the war started and it’s shaped everything since. There’s zero domestic support for that in the U.S. And the U.S. has no pressing strategic interest to do that, certainly not at the cost it would require. Meanwhile, the Iranian government is in a fight for its life. America’s capacity to inflict pain on Iran is immense. But Iran’s willingness to endure pain is far greater.
This almost perfectly mirrors Canada’s current position vis a vis the U.S. The U.S. economy dwarfs Canada’s. The impact of an all-out trade war on Canada is vastly greater than the impact on the U.S. But Canada’s whole society and politics are consumed with this issue. That is even more the case when it emerged over the weekend that Trump is not only demanding unequal trade terms but attacking Canadian sovereignty in the form of demanding an end to domestic protections for the French language and a veto over Canadian trade deals with other countries. If anything, Prime Minister Mark Carney is trying to keep up with popular anger at the U.S. rather than getting the Canadian public to back up his hard line.
Meanwhile, most Americans only barely know this is even going on. When they hear about it their reaction is mainly bafflement. Like, ‘I’m confused. Why is this happening?’ That is probably one half the ordinary privilege of superpowerdom in which people barely have to pay much attention to what’s happening beyond their borders and one half the fact, that for those do pay attention to these things, our own country is in the midst of being dynamited and/or sold off or stripped for parts. Carney’s approval numbers were just below 60% before this latest crisis; I’d assume they’re a bit higher now, as they generally peak during moments of confrontation with the U.S. So basically the inverse of Trump’s, which are in the mid-30s.
A country can withstand a lot of pain when it’s invested in or feels it has no choice but to fight a war, whether its literal armed combat or a trade war. The U.S. can barely withstand comparatively modest hikes in fuel costs because very few Americans think the U.S. should have started this war in the first place. This is the actual measure of national power: Not the absolute measure of a military or GDP but popular and elite will to endure the inevitable hardships of any conflict.
Let me close on a personal note. I wrote two posts over the weekend about the breakdown of negotiations and the incipient trade war. In response to these posts and discussing them on social media, I had several fairly acrimonious encounters with Canadians in which the reader either caught a shard of a conversation and thought I was arguing against Canada’s position or zeroed in on a piece of text and insisted it was an example of American indifference to or myopia about Canada. One I think occasional reader wrote in and insisted that a sentence about the size of the Canadian economy compared to America’s was actually claiming that I meant Canada was a geographically small country when in fact it’s the [second: d’oh!] largest country, by landmass, in the world. These encounters were exasperating in the particular but edifying in the aggregate. In each case I’d try to say something to the effect of, “Wait, no, I’m arguing your side of this. What we’re doing here is stupid and wrong,” before realizing there was no point.
To be clear, I’m not saying that Canadians have some national deficit in reading comprehension. I’m noting that the fury is so intense that it bleeds through in the sort of ordinary quibbles over wording or minor misunderstandings that are commonplace for any kind of public writing but with a mammoth intensity and even with Americans who are trying to argue their case. It helped confirm and illustrate to me what is already crystal-clear in public opinion polls, anecdotal accounts and the actions of the Canadian government. Canadians are full of fury and rage not only over the damage that the U.S. is doing to their economy and livelihoods but because, as Carney has repeatedly made clear, it is a thoroughly unprovoked and unjustified attack on a friendly neighbor which has stood by the U.S. in basically every conflict the U.S. has fought in for a century and is as thoroughly integrated into our national, economic and cultural lives as any country on earth. As I’ve argued here, Canada’s position is probably much stronger than it looks. But that will be at the cost of immense pain we’re inflicting for no reason or justification. And it won’t be forgotten for a long, long time.