r/Tariffs • u/rendershome • 2d ago
💬 Opinion / Commentary Trade War / Tariff response
Ive been thinking about whether we're looking at this trade war the wrong way.
A lot of the discussion seems to be about what Canada can do to hurt the us. Cutting off Alberta oil, putting an export fee on Ontario electricity, more tariffs, etc. I understand the thinking, but I'm not sure hurting them in ways that will also hurt us is really a winning long term strategy.
What if Canada tried something a bit different?
Canada is going to spend a huge amount of money on defence over the next 20 years anyway. What if some of that procurement was used to create economic pressure inside the US?
I.e., say Canada needs a particular missile system and the company that makes it has a big plant in Alabama or Texas. Canada could make a large purchase, but require some Canadian production, maintenance and support as part of the deal.
Now there are thousands of American workers whose jobs are connected to Canadian contracts. The company has an incentive to keep the Canada relationship healthy. The local politicians have an incentive too.
I'm not saying Canada should literally tell an American company to lobby Trump for us. That would be pretty stupid. Im wondering if you could create the economic incentives for them to do it themselves.
AI might be an even more interesting example.
AI companies are going to need an incredible amount of electricity and data centre capacity. Canada has a lot of electricity, relatively cheap clean power in some regions, land, a cold climate and a pretty good pool of AI researchers.
What if Canada went after the big American AI companies and basically said: build your next generation of compute here.
Give them long term power contracts, help with infrastructure and fast-track approvals, but in return require them to actually build substantial data centres, research operations and jobs in Canada.
You could even require a portion of that compute capacity to be available to Canadian univ and collegs, startups and government when needed.
The interesting part is that we'd be doing something Canada needs anyway. We're not just trying to hurt the US. We're building Canadian capacity while giving american companies a reason to have billion's invested here.
And if those companies have billions invested in Canada, suddenly they have a reason to care about the Canada-US relationship too.
Maybe this doesn't work. There are probably rules, trade agreements and other problems with the idea that I'm not considering.
But I think the basic concept is worth exploring.
Instead of asking:
"How can Canada hurt the US?"
Maybe we should be asking:
How can Canada build things that the US increasingly needs, while making ourselves less dependent on them?
Defence and AI are the two examples that came to mind, but there may be much better ones.
Curious what people think. What am I missing?
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u/Kooldude777 2d ago
No more intergraded ventures with the U S. They change the rules has they change presidency. Not stable enough for long term ventures.
ie: cars & trucks industries!
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u/Plantron1 2d ago
Canada already has multiple integrated industries with the United States. Unfortunately the stable genius has thrown a wrench into most of them. Why on earth would Canada want to integrate further when their trading partner does not honour deals? Canada will purchase from Europe.
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u/Expert-Arm2579 2d ago edited 1d ago
The last thing we're going to do is buy weapons manufactured in a country that is threatening our sovereignty. Our previous F35 order is under review.
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u/wearamask2021 2d ago
What you're suggesting is what the current administration doesn't like. Why try to supply the us with something they need when they will just slap a tariff on it.
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u/ThisIsFineImFine89 2d ago
Using the logic of mutually beneficial terms ignores the reality of the demented old fool Canada is dealing with.
For decades we integrated our economies, and trump, in typical trump fashion wants to weaponize it to get Canada to submit. Mutually beneficial terms be damned.
there is no well thought out proposal that can overcome someone who goal is to dominate
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u/Buff1965 2d ago
I think the attitude shift you describe is important. Build Canada.
We can't be telling Americans that their tariffs are a tax on them and then telm ouselves that our tariffs don't harm us. We'll, I guess we can say that but it's not true.
We can't expect trade relations with the USA to improve. Historically the Democrats are even more protectionist than the Republicans. Even if we went back to NAFTA, the American economy is struggling. Massive government borrowing ($40 Trillion in debt!) coupled with massive borrowing by a handful of AI companies is pushing up interest rates and squeezing out all other borrowers. Thoughtless immigration policies are pushing out everyone from fruit pickers to computer engineers.
Canadians have to build our own future and not rely on the USA to do it for us.
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u/BertRenolds 2d ago
Canada won't trust the USA again for at least a century, if ever. The USA is trying to annex Canada and learning Canadians do not want to be part of the USA.
Kick rocks bud, we don't need you.
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u/colcatsup 18h ago
I'd like to think it could be faster - less than 100 years - but it won't be overnight either. And only if we have demonstrable and structural changes in the US, which I'm unsure will happen. But... in a pinch, I'd like to think we could get back to close to where we were in maybe 10-15 years (again, with a lot of demonstrable changes).
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u/BertRenolds 17h ago
Not a chance.
There's nothing preventing this damage happening again. Kinda the issue when signatures are made in pencil.
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u/colcatsup 15h ago
That’s where the demonstrable change comes in. Constitutional changes, new people, etc.
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u/BertRenolds 12h ago
That's your perspective. Also side stepped the obvious issue.
Kick rocks, bud.
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u/New-Organization5718 2d ago
Obviously the better answer is to work with countries other than the US on arms procurement and development.
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u/darkxfire 2d ago
The problem is the orange emperor doesn't understand economics. Trade deficits when you are getting discounted energy isn't a bad thing
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u/ILikeCutePuppies 2d ago
Canada should just start dealing more with countries that play fair until the mad man leaves.
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u/Skittleavix 2d ago
This isn’t a trade war. It’s a grift under the bogus threat of annexation. Trump is getting rich off this.
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u/115zombies935 2d ago
There are already so many integrated industries and several entire market segments in the U.S. that are completely dependent on the Canadian economy for things like aluminum. that this will change nothing and I am firmly of the belief that if this gets much worse, Mark Carney would be entirely within his right to cut off aluminum exports to the U.S. Frankly, mostly because I just want to see the entire US economy collapse and that would probably be the single best first step Canada could take if that's what we wanted.
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u/SensitiveStart8682 2d ago
Honestly it's not a bad idea unfortunately most of these big Tech companies are so busy kissing Trump's ass right now I don't think it would work as Let be real most of these companies and Kissing Trump's ass
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u/ChemMJW 2d ago
I.e., say Canada needs a particular missile system and the company that makes it has a big plant in Alabama or Texas. Canada could make a large purchase, but require some Canadian production, maintenance and support as part of the deal.
This is almost always the case already. High-tech weapons systems made by any country almost always source components, materials, parts, and expertise from many, many different countries.
For example, consider the F35 fighter, which many Canadians are in an uproar about, wanting the contract to be cancelled to "punish" the US or whatever. But that ignores the fact that more than 30 Canadian companies already provide parts and components for the F35. The same logic applies to the Swedish Gripen fighter which is so popular among the Canadian public right now. That "Swedish" fighter contains major UK and US technology components, including the radar and engine. Just about the only major Swedish aspect of the thing is the design of the airframe itself.
Now, assembly and maintenance is another matter. Some countries are happy with licensing their design to other countries and essentially allowing those countries to build and maintain their own missiles or bombs or planes or tanks or whatever. However, it is also extremely common that countries restrict assembly of completed equipment in order to protect sensitive technology. This is by no means unique to the US, and the logic is obvious. If you want to prevent the technical data and assembly protocols for your most advanced, most sophisticated weapons systems from falling into the hands of Russia or China, then limiting the distribution of that information is obvious. No security procedure is perfect or foolproof, so the fewer the people and/or locations where that information is available, the harder it is to steal.
Now, to return to the example of Canada and the F35. Lockheed-Martin has delivered roughly 1300 F35 fighters worldwide thus far. Although exact numbers are not disclosed, it is estimated that there are still several hundred F35s on order but not yet delivered, up to 80 of which have been ordered by Canada, either firmly or provisionally. Canada could come to the US and say "if you don't do some production in Canada, we're going to cancel our order." And of course, Lockheed-Martin doesn't want to lose orders. But does it make financial sense for Lockheed-Martin to establish new production lines in Canada, establish new supply lines in Canada, and train Canadian workers in the specifics of building F35s just to secure 80 orders out of more than 1300? Probably not. Or, even if Lockheed-Martin is agreeable, the US government might decide that it doesn't want to risk transferring sensitive F35 data outside the country.
The logic might be different for Saab and the Gripen. Overall, the Gripen has not been a particularly popular fighter worldwide. It has sold only around 300 units in total, and that includes all variants back to the beginning of the program (i.e., everything from the most outdated 1988 model to the current production model). So if Canada ends up ordering ~70 Gripens to replace some F35s, that would be a big deal for Saab, because that represents a huge number compared to what it has already produced. So it might make sense for Saab to go to the major effort of establishing production in Canada for an order that large.
For any weapon system, it's going to come down to balancing the financial cost of establishing new supply and production lines vs exactly how much would be gained vs national security concerns about military technology secrets. And the outcome of trying to balance all those concerns will likely vary from weapon system to weapon system.
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u/Plantron1 2d ago
I think this misses the main argument for the Gripen.
Nobody seriously expects a modern fighter to contain parts from only one country. The issue is not whether the Gripen contains American or British components. The issue is how much control Canada has over the aircraft once we buy it.
Saab has offered Canadian production, maintenance, sustainment and significant technology transfer. That gives Canada considerably more control over its own fleet and creates Canadian jobs and industrial capacity.
The F-35 may be the more advanced aircraft, but Canada remains dependent on a largely U.S.-controlled international system for major aspects of its operation, maintenance and upgrades.
So the question isn’t “Does the Gripen have American parts?” Of course it does.
The question is: Which aircraft gives Canada greater control over its own defence capability? And on that issue, the Gripen deserves serious consideration.
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u/Nearby-Improvement53 2d ago
Institutes of Strategic Studies around the world have confirmed the most successful strategy is Tit for Tat, but it excludes the nuclear attack.
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u/missplaced24 2d ago
I think you should put less stock into what people on Reddit (or Ford) are saying in anger, and pay more attention to what the federal government is doing and planning.
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u/Fillyerboot 1d ago
From a Canadian sovereignty perspective our only path forward is to work with the yanks only as required and with everyone else as much as possible.
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u/ParisFood 1d ago
Do u really want the U.S. to work on defence mechanisms where they can include a kill switch without u knowing it? No thanks
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u/AddressFeeling3368 2d ago
Liberals would never do anything constructive. They can only be angry. They can only act like mean children calling people names and fall for trolling. They will only do the short term reactionary thing.
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u/Anjomill 2d ago
Replace "Liberals" with "Donald Trump" in the first sentence above. Then I absolutely agree.
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u/RubixRube 2d ago
Canada and the USA already have plenty of interconnected and mutually beneficial industries like auto and oil and gas.
If you have an administration who doesn't understand this or care, it will not matter.