Menu

Close

On This Page

Trump’s taxes on imports from Canada has hurt the country’s economy, which contracted at a 1.6 percent annual rate in the second quarter. In response to the slowing economy, Canada’s Prime Minister Mark Carney decided to lower taxes by reducing some taxes on imports from the United States. The New York Times seemed to think this showed real weakness. The Times’ take showed real ignorance.

The tariffs that Carney eliminated were put in place by his predecessor, Justin Trudeau, in retaliation for Trump’s tariffs. The presumed hope was that this tit-for-tat response would lead Trump to embrace common sense and move back towards the pre-existing trade relationship.

But Trump was never a person who cared much for common sense, arithmetic, logic or other forms of reasoning that guide most of us in our daily lives. He left the original tariffs in place, and even added some new ones, raising prices for people in the United States. 

Since it’s now clear to everyone except New York Times reporters that Canada’s retaliatory tariffs are not going to change Trump’s behavior, Carney decided to deliver an easy tax cut to Canadian consumers. That is the sort of thing that governments do when their economy is in a slump. And since tariffs tend to be very regressive, hitting lower income and working-class people hardest, they are an especially good tax to cut.

At this point, it is presumably clear to Carney that the United States is not a reliable trading partner. He is actively seeking closer trade relations with the European Union and Latin America. Decoupling from the United States will be costly after many decades in which their economies were closely tied, but Trump really gives them no choice. Reducing import taxes that needlessly raises the cost of some items is a move that eases the pain. 

It is hard to see an argument on the other side, even if the NYT wants to portray the tax cut as a major retreat.