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Economy & Business

Trump's Trade Spat With Canada May Have Serious Repercussions


Canadian trade officials say the relationship between Canada and the U.S. is worse than it's ever been between the two longtime allies. Canada and America fought together in both World Wars and are part of the so-called Five Eyes alliance to share intelligence. When our co-host Steve Inskeep spoke with Max Boot of the Council on Foreign Relations, Boot pointed out that Canada even saved U.S. lives during the Iran hostage crisis.

MAX BOOT: The Canadian embassy in Tehran provided refuge to U.S. diplomats and cooperated in evacuating some of the diplomats who managed to avoid being taken hostage during the Iran hostage crisis.


Even though that was a tremendous risk, I'm sure, to Canadian diplomats who took part in that.

BOOT: Of course. Canada has also stood with us in Afghanistan. Canada has lost well over 100 soldiers fighting alongside Americans on a NATO mission, and they earn their respect of American troops.

INSKEEP: The reason they were there is because the United States had been attacked and the NATO allies, including Canada, invoked the treaty that said if one nation was attacked, it was an attack on them all.

BOOT: Right, article 5 of the NATO alliance. The only time it's ever been invoked was after 9/11 when the other countries of NATO came to America's aid. And I would add, by the way, that Canada also constantly safeguards American security because it's part of NORAD, the North American Aerospace Defense Alliance. So every single day, Canadian and American military personnel work together to prevent another 9/11.

INSKEEP: So these two countries are just about as closely allied as you can imagine two countries being. But there is this trading relationship. It doesn't automatically mean the trading relationship is great. What has trade between the U.S. and Canada been like?

BOOT: Canada is our largest trade partner. And not just our largest trade partner, it's our largest export market - more than $600 billion in trade every single year. And for many states, Canada is their top trade partner.

INSKEEP: I'm thinking about what that trade consists of. Some of it is cars, right? Detroit's right up there by the Canadian border.

BOOT: Yeah. I mean, the supply chains for cars are very closely integrated. I mean, General Motors, for example, has plants in Canada. And those cars go back and forth, and they're able to do that because of NAFTA, which has created a more or less seamless integration of the Canadian and U.S. economies. So all these car companies just depend upon production in Canada being the same as production in the United States, and that helps to support American jobs.

INSKEEP: So given all of this backdrop, all of this trade, what do you make of President Trump's apparent hostility to Canada?

BOOT: I mean, of all the countries in the world that you would expect the United States to be at odds with, Canada is pretty much the last one because it's our closest trade partner or our closest security partner. So why Donald Trump seems to have this animus against Canada is almost inexplicable unless it's simply a matter of personal pique.

INSKEEP: Can you imagine the possibility that the president has raised actually coming to pass, that the U.S. would cancel NAFTA, enter a trade agreement with Mexico and just leave out Canada - whatever the rules were before, that's what would be effect afterward?

BOOT: That's nuts. I mean, we have more trade with Canada than any other country. So - and moreover, NAFTA is not an executive agreement like the Iran nuclear deal that he can simply tear up. This was actually a trade agreement that was ratified by both houses of Congress. And therefore, if he's going to revise NAFTA, it's going to require congressional approval, and a lot of Republicans now are signaling - rightfully so - that they're not going to simply exclude Canada because that would be economically catastrophic for many of their states.

INSKEEP: Let me make sure that I understand the president's power. If he sends a new trade agreement to Congress, it's not going to take effect unless they sign off.

BOOT: They need to approve it.

INSKEEP: Well, listening to you, it makes me wonder if the president is getting a lot of attention for something that is just not going to happen.

BOOT: He is getting a lot of attention. But even if he doesn't manage to tear up NAFTA, I think what he's doing is he is doing long-term damage to our alliance with Canada. And that's going to have long-term repercussions. So, you know, whatever the ultimate outcome of this current debate, I think there will be serious consequences because when the president of the United States says things, they have meaning. They have - they will come back to haunt us.

INSKEEP: Max Boot, thanks very much.

BOOT: Thanks for having me. Transcript provided by NPR, Copyright NPR.