Canada is putting pressure on Trump and could become a role model for other countries. US economist Wendy Edelberg explains why the trade war could be expensive for Trump and why Americans’ patience is dwindling.
Bastian Brauns reports from Washington
It is a conflict that would have been difficult to imagine just a few years ago: The USA and Canadawho have had close economic ties for decades, are becoming ever more at odds with one another. But for Donald Trump It has long been about more than just tariffs and trade balances. Because as the pressure on companies and consumers grows, the resistance of our northern neighbor could become a test for Trump’s entire global trade policy.
In an interview, economist Wendy Edelberg explains how great the risk is for Trump – and why many Americans increasingly feel like they are no longer making economic progress despite continued consumption.
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t-online: Ms. Edelberg, can we now talk about a trade war between the direct neighbors USA and Canada?
Wendy Edelberg: I don’t know how you could describe the current situation other than a trade war. That doesn’t mean we can’t step back from this abyss. I’m pretty sure this conflict will be resolved at some point. But yes, we are in a trade war.
Canada has now responded to Trump’s tariffs with counter-tariffs and is apparently specifically targeting products whose manufacturers could exert political pressure on Donald Trump. Does this mean that Canada might have a better strategy?
I don’t know who is making the better political move here. But Canada makes a compelling point. Because it signals: We are willing to endure a lot of economic pain in order to win in the end.
I’m not sure President Trump has enough of the American public behind him to be willing to accept economic pain for an extended period of time. Ultimately, a trade war always comes down to: Who is willing to take the biggest hit for the longest?
The Canadian Prime Minister is serious and declares the trade war to be a question of national identity.
Yes. It is remarkable how few other countries have imposed their own tariffs against the USA. Through its resistance, Canada is now clearly getting Trump’s attention.
Will this make Canada a kind of test case for other countries?
Absolutely. Other countries will be watching closely to see how this plays out for Canada: are retaliatory tariffs against the United States a good strategy or not? And I’m sure President Trump is thinking about it too as he weighs the cost to him if Canada ends up coming out on top. Because then it would no longer just be about trade with Canada. It could be politically and economically very expensive if other countries followed Canada’s example.
