It’s the “Canada” of it all that makes it so worrisome for Australians, because Australia and Canada are so alike. Canada is safe, likeable, reasonable, wealthy, friendly, Western, English-speaking. Australia and Canada share a colonial heritage, membership to the Commonwealth, and a long-established alliance with the United States, reinforced by deep historical, economic and cultural ties.
All of which ought to make us wonder: if the Americans can impose a 25% tariff on Canadian goods entering the US, as announced by the Trump administration earlier this week, what should Australia expect?
Do yourself a favour and read Prime Minister Justin Trudeau’s speech responding to the announcement, which will take no longer than five minutes. It is not an exaggeration to describe it as a wartime address, with references to peril, threat, unity and pulling together.
As economists say of tariff wars, just because your trading partner is putting rocks in their harbour, doesn’t mean you should too.
You might be thinking that this is all a bit overwrought. The tariffs have now been delayed. Canada has announced border control measures to assuage Donald Trump. It was all a bluff. Canada-US relations can return to normal. As you were.
Except that the threat of tariffs can never be unmade. It now looms over the relationship for the rest of Trump’s term.
It’s early days for this presidency, but so far, the most feared scenario appears the most likely. Many analysts have warned that the institutional tethers that restrained Trump in his first term would likely be much looser in the second. The “deep state” was not going to check his instincts this time, and one of those instincts is a baffling, inexplicable attachment to tariffs as a cure for America’s economic ills. If you want to know why Trump is wrong on this question, here’s Ronald Reagan, 40th president of the United States:
Unfortunately for Australia, another of Trump’s deeply held beliefs is an antipathy to alliances, which is why his administration’s behaviour towards Canada is so troubling. For one thing, it ought to make Australia question whether the nuclear-powered submarines promised under AUKUS will become a bargaining chip. (Mind you, delivery of those subs was in doubt no matter who won the last presidential election; Greg Sheridan’s recent column puts the case for pessimism brilliantly, and it has little to do with Trump.)
It should also force larger questions about American commitment to Australia’s defence. A military alliance is, ultimately, a promise that the allies will come to one another’s aid in the event of a security crisis. Of course, the ANZUS treaty is opaque on this point, saying only that the two sides would “consult” in such an event, but rhetoric and historical practice lend the treaty more force than that. The Canada tariffs strike a blow to the credibility of this implicit promise. If a country as loyal, as friendly, as familiar as Canada can be treated so shabbily, why should Australia expect to fare any better?
None of this should be read as a call for Australia to end the alliance with the United States. No matter how badly Trump behaves, the pact has benefits to Australia, which gets privileged access to intelligence and weapons technology, and opportunities to train and exercise alongside American forces. That’s worth preserving. As economists say of tariff wars, just because your trading partner is putting rocks in their harbour, doesn’t mean you should too.
But Trump’s behaviour should make us think again about the limits of the alliance. It is a far shallower and more transactional thing than its Australian supporters like to believe. Look again at the statement from Trudeau, particularly his invocations of shared wartime sacrifice, and reflect on how similar it sounds to the countless speeches made by Australian prime ministers rhapsodising about the alliance. How easily such language can be turned into a plea for mercy from the arbitrary whim of a president!
Trump’s transactional approach presents opportunities, too. As former Australian prime minister Paul Keating notes, the president has so little time for the nostrums of Washington’s foreign policy elites and such contempt for their “rules-based order” that he may very well concoct a grand bargain with Beijing that once and for all buries the idea of American primacy in Asia and opens an era of power-sharing with Beijing. As Trump’s Secretary of State Marco Rubio recently said, “it’s not normal for the world to simply have a unipolar power. That was not – that was an anomaly. It was a product of the end of the Cold War, but eventually you were going to reach back to a point where you had a multipolar world.”