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Trump Policies Put A Strain On U.S. Relations With Canada


President Trump says he wants to impose tariffs on steel and aluminum imports. But a move like that could hurt Canada, which supplies more of those materials to the U.S. than any other country does. The U.S. and Canada have long enjoyed strong trade ties, but some of Trump's policies are putting a strain on that relationship. Here's NPR's Jim Zarroli.

JIM ZARROLI, BYLINE: Canadians may have a reputation for being super nice neighbors, but as President Trump sees it, they know how to play hardball, at least, where trade is concerned. Here he was last April at the White House.


PRESIDENT DONALD TRUMP: People don't realize Canada has been very rough on the United States. Everyone thinks of Canada as being wonderful, and so do I. I love Canada. But they've outsmarted our politicians for many years.

ZARROLI: Trump has repeatedly criticized Canada for closing its dairy markets, and his administration has backed Boeing in a dispute over Canadian aircraft subsidies. Most important, it's forced Canada, along with Mexico, to renegotiate the North American Free Trade Agreement. Edward Alden of the Council on Foreign Relations says Trump's rhetoric toward Canada has been extraordinary.

EDWARD ALDEN: If you looked at what the president said during the campaign about the large trade deficit, that's mostly a China problem. And yet, this administration has done nothing to date with respect to China. And yet, it's picked this whole series of trade conflicts with the country Canada, with whom we have a pretty balanced trading relationship.

ZARROLI: Unlike China or Mexico, Canada actually buys as much from the U.S. as it sells. In fact, the U.S. has a small trade surplus with Canada, and the economies of the two countries are closely intertwined with manufacturing supply chains that are tightly linked. Ian Lee teaches business at Carleton University in Ottawa.

IAN LEE: Because the two economies are so integrated with just-in-time inventory - and we're really talking the manufacturing - the average vehicle or appliance crosses back and forth the border seven times.

ZARROLI: But Lee says, make no mistake, three-quarters of Canada's exports go to the United States. The U.S. economy is so much bigger that Canada is bound to be on the losing side of any trade war.

LEE: To me it's arithmetic. It's not about, well, we're the equal of the United States. Look, they're 20 trillion. We're 2 trillion. They're 10 times bigger.

ZARROLI: For that reason, Canada's response to Trump's rhetoric has been cautious. Prime Minister Justin Trudeau was quick to speak out against the steel and aluminum tariffs Trump endorsed last week.


PRIME MINISTER JUSTIN TRUDEAU: We regard the imposition of any new tariffs or any tariffs on steel or aluminum between our two countries as absolutely unacceptable.

ZARROLI: But for the most part, Canada's tone has been more measured. It has quietly tried to smooth over some of the smaller trade disputes it has with Washington, and it has repeatedly reaffirmed the fundamental relationship between the two neighbors. Again, Edward Alden of the Council on Foreign Relations.

ALDEN: I think Canada is honestly feeling around for the right response, whether to try and be kind of calm and conciliatory, or to be in your face on the theory that the only thing bullies understand is when you fight back.

ZARROLI: And there is plenty at stake for Canada right now. This is happening at a time when it's in talks with the U.S. and Mexico over the future of NAFTA, which will have a much bigger impact on the country's economy than any dispute over steel tariffs. Jim Zarroli, NPR News. Transcript provided by NPR, Copyright NPR.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.