Canadian readers of my vintage will remember the Alberta-based bumper sticker campaign inspired by the demand made by an angry caller to a Calgary radio station to “let the Eastern bastards freeze in the dark.” His ire was inspired by Trudeau pere’s National Energy Program and the threat that it posed to provincial jurisdiction over Alberta’s oil and gas resources. Trump’s 25 % tariffs on all Canadian goods imported into the US (10% on oil and gas) imposed on February 1st and then suspended for 30 days has aroused Canadian anger across the country. Ontario premiere Doug Ford went the furthest, arguing that we should cut off electricity and energy supplies. Trudeau fils was not willing to take that dangerous step, at least in the first round of response, but he did announce an escalating series of counter-tariffs. Whether Trudeau’s willingness to offer a robust response, or whether his economic advisors were able to explain the implications of “integrated supply chain,” or whether Trump decided he could attain his ultimate economic goals (shifting investment from Canada and Mexico to the US) by slowly bleeding concessions from Canada and Mexico I cannot say at this point. But what is clear is that the complex set of dependencies that ties the Canadian economy to the American puts Canada in an extremely precarious position.
Political forces that were once against free trade when it was first negotiated in 1987, and then deepened and extended to Mexico in 1993 with the North American Free Trade Agreement (renegotiated under the first Trump administration and re-christened the United States Mexico Canada Agreement) find themselves forced to defend it. Economic nationalists going back to Harold Innis have warned that the size differential between the Canadian and American economies meant that Canada will always need America more than America needs Canada. Abundant natural resources offer only limited leverage– if there is only one market for the resource (America), then threats to suspend exports are idle: the resource only has commercial value if it is sold, and if there is only an American buyer, then not selling will have even worse economic consequences than paying the tariff. In any case, critics of integration and free trade lost the argument, and now Canada faces its most serious economic problem since the 2008 global financial crisis.
The threat is real, in particular to the auto industry, situated in Southern Ontario. Windsor-Essex where I live could face economic obliteration. I am not exaggerating. Tens of thousands of workers in the assembly and engine plants and dozens of smaller tool and die, injection mold, and parts plants could lose their jobs. Parts go back and forth across the border multiple times. Do the math: if every time a part crosses into the US the manufacturer must pay a 25 % duty, the costs will be enormous. Experts predicted that the entire North American auto industry, dependent as it is on the integrated supply chain and just in time production, could grind to a halt in 7-10 days from the imposition of tariffs. While the fact that American auto workers would be laid off would be sure to get Trump’s attention, it would also get the attention of the owners of parts plants and future investors. Capitalists are risk averse: they will close plants on this side of the border and not make future investments if they are going to be exposed to tariffs. The industry will not disappear tomorrow (because plants cannot just be moved overnight), but overtime the plants will relocate to the US to avoid tariffs, or even the threat. That is Trump’s plan, and it may be starting to work already. Even though the tariffs have been suspended, a number of firms located in Canada have announced lay offs in anticipation that they will be applied in March. But even if they are not, Trump can keep them dangling like the sword of Damocles over Canadian heads.
Perhaps alone amongst nations, Canadian politicians take American political and economic aggression as a personal insult. They rhapsodize about what a good friend Canada has been to the US, what close allies we have been, how special and unique our connection is, how we share the world’s longest undefended border (but not any more, since Trudeau has agreed to further police and militarize it as part of the commitment he made to Trump to stave of the implementation of the tariffs). But they forget both Lord Palmerston and Pierre Eliot Trudeau, the first of whom argued that states have no permanent friends or enemies, but only interests, and the second who warned that when a mouse sleeps next to an elephant, it is always in danger of being crushed. One can disagree or even despise Trump’s tactics, but Trump is the President of the United States and has both the right and the power to impose whatever economic policies he and his advisors believe is in the interest of the United States.
Viewed from the standpoint of American capital, Trump’s politics are contradictory, which explains the mostly critical response from the business establishment. One must not forget that globalization was largely an American-capital driven process: the policy architecture that created the conditions for globalization was called the Washington Consensus. While the trade liberalization that made possible the re-location of manufacturing industries did not harm the bottom line of most industries– indeed, the whole point of relocation was to reduce labour costs and undermine the power of unions– it did gut many smaller American cities and create what is not affectionately known as the “Rust Belt. Some industries were also directly harmed by competition with lower priced Chinese imports– steel comes immediately to mind. All economic policy- and the neo-liberalism that underpinned globalization was a policy, not a distinct form of society– must be understood in terms of its function: to create the conditions for expanded capital accumulation. What we are clearly witnessing is the unravelling of neo-liberal globalization. States have been re-trenching behind stronger borders since 2008, and especially since COVID-19. Trump is part of a global wave of right-wing populist movements coming to power based upon dissatisfaction with the impotence of social democratic parties (in the US, the Democratic Party) in the face of global threats to working-class living standards. As is sadly too often the case, working class anger is directed downward- against immigrants, especially– rather than upward, against the ruling class. Nevertheless, the social and economic problems feeding right-wing populist movements are real.
Which brings us to the crucial, as always, question: what is to be done? And as soon as that question is posed one faces a problem– a paradox, really– that I have been wrestling with, without success, for many years: the short term damage caused by phase transitions between one form of global economic governance and another is real, suggesting that only fundamental, long-term, system transformation can solve the problems, but the short term pain that would be required to reach those long term goals would be at least as bad if not worse than trying to re-float the system, which impedes political mobilization in support of structural changes. Moreover, since structural alternatives are just textbook ideas, people understandably cling to whatever version of the system works for them– tariffs in the pre-free trade world, now free trade– because life requires certainty of need-satisfaction today and tomorrow. If the mortgage must be paid at the end of the month and groceries bought each week, workers are going to mobilize behind those forces that seem best able to secure the social conditions that allow them to do so. Most workers might not have much when compared to the ruling class, but they have a great deal more to lose than their chains.
But they do stay chained to a system whose periodic convulsions and internal transformation threaten their lives and livelihoods. How this paradox between the fact that these system convulsions threaten the very needs that keep people wed to the system is to be solved, I do not know. As is usually the case when an American threat to the Canadian economy begins to take hold, voices cry out that it is time to de-couple from the American economy. This time is no different. Left-nationalist voices have called for but a more self-reliant Canadian economy, voices further to the left have called not only for a more independent but also a democratic socialist economy These calls sound good in the abstract, and in the abstract their “necessity” can also be proven. But they float down from the (not absolutely, but relatively more secure) halls of academia. Making an argument in class to students is one thing, making it in the Penalty Box Lounge across Walker Road road from the Windsor Assembly Plant (Canada’s largest manufacturing plant) to auto workers facing immediate job losses would be quite something else entirely.
Sam Gindin grasps the paradox better than most. A long-time leader in the CAW/UNIFOR before leaving for a career as an academic, Gindin understands the lived realty of Canadian workers’ vulnerability to changing American priorities. He is also correct to infer– but it is more like a logical inference than a political program– that the radical alternative- not just de-linking but socialist reconstruction of the Canadian economy, is the only practical alternative. Correct as an inference but not as a political project because neither Gindin nor anyone else could tell the workers’ affected how this economy can be built, how long it would take, how it would function, and how it would employ the manufacturing workers who would certainly lose their jobs as their factories shrank because they were no longer selling into the gigantic American market. Moreover, the crucial question of how a relatively small economy could become an independent bastion of democratic socialism is left unanswered. Serious solidarity between Canadian and American workers seems impossible to imagine right now. The only existing vehicles by which such solidarity could be constructed are unions whose primary function today is job protection, and Canadian workers are facing the problems that they are facing because Trump is selling his agenda as a job-creator. Should it prove to be a job killer– as he has been warned it will- a return to the status quo ante rather than a new era of collective working class struggle is far, far more likely.
Trump is deploying nostalgia for a supposed Golden Age to build an ideological bloc in support of his virulent nationalism. Despair can be tempered by the knowledge that the mandate that he claims for his wrecking-ball approach to governance is much smaller than he claims– only 1/3 of eligible voters cast their ballot for him. But the power vested in the Executive branch is allowing him almost free hand right now. Democrats have, predictably, adopted a ‘make lawyers rich again’ court-based strategy to try to slow him down. But what is needed — Gindin and others are correct– is a renewed democratic socialist project: one that begins from shared interests underlying distinct identities rather than the individual and abstract ‘stories’ and ‘journeys’ of those identities. From shared and universal need-satisfaction as the material condition of the unique and to a society which allows for- as J.S. Mill said beautifully in On Liberty— an open-ended set of “experiments in living,” that is the principle upon which a renewed struggle for a better world must be organized. But it is just a principle, a platitude, really, which can do nothing on its own but requires the force of millions of people working together to put it into practice.
Who will discover the rhetorical and political key to inspiring people to take the risk they will have to take to solve the structural problems that capitalism as such poses with real invention rather than ideological nostalgia?