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Canada should dedicate resources to coming up with off-ramps and make a deal with the U.S.Carney is due to join European Union president Ursula von der Leyen in Strasbourg, France, next week to announce a plan to deepen trade and security ties between Canada and the EU. Photo by THIBAULT CAMUS /POOL/AFP via Getty ImagesPrime Minister Mark Carney’s “forward guidance” videos have proven adept at fostering populist tactics in the services of mainstream politics.Enjoy the latest local, national and international news.Exclusive articles by Conrad Black, Barbara Kay and others. Plus, special edition NP Platformed and First Reading newsletters and virtual events.Unlimited online access to National Post.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles including the New York Times Crossword.Support local journalism.Enjoy the latest local, national and international news.Exclusive articles by Conrad Black, Barbara Kay and others. Plus, special edition NP Platformed and First Reading newsletters and virtual events.Unlimited online access to National Post.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles including the New York Times Crossword.Support local journalism.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorVoters across the western world have been drawn to conspiracy theories and demagogues because they fear that nobody is in control. In this series of videos, Carney has presented a calm, reassuring face to the world, telling Canadians that their “improbable country” will “pivot and prosper” in the face of the trade war with the Americans.The world is not rudderless and he is at the helm, he indicated speaking in a 15-minute video this week, speaking directly to the camera throughout.The National Post newsletter that doesn’t hold back, giving readers the unvarnished truth on media, politics and culture.By signing up, you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Right? will soon be in your inbox.We encountered an issue signing you up. Please try againHe does not follow the populist playbook of promising painless solutions to complicated problems. “This won’t be easy and I won’t pretend otherwise,” he said.But he radiates an assurance and tenacity that few others could match.He is right. Canada is likely to emerge from this episode stronger and more resilient than ever. But that does not mean the plan is foolproof.He said the response to the latest U.S. tariffs has three legs: retaliatory tariffs; supporting Canadians; and trade diversification.Retaliation is popular, but is it necessary or wise? University of Toronto economics professor Joseph Steinberg asked in a post on X Wednesday whether Canada’s economy would be stronger or weaker if it had not retaliated at all. He said he supports Carney’s decision to walk away from the deal last month (as do I). But he argued it did not necessarily justify retaliatory tariffs, like the latest round that took effect Tuesday. “Those are two different things,” he said.On diversification, Carney talked about directing more trade to “trusted partners.”Carney is due to join European Union president Ursula von der Leyen in Strasbourg, France next week to announce a plan to deepen trade and security ties between Canada and the EU.It is logical that Canada is looking for alternatives to President Donald Trump’s kleptocracy — he noted in his video that Canada now has tariff-free access to 1.5-billion consumers and will double that over the next six months, indicating that a deal with India is close.But reducing dependence on America to replace it with Europe may be like being rescued from the Titanic by the Hindenburg.The far-right Alternative for Germany party has just won a state election in Saxony-Anhalt and leads in national polls. It is seeking to exit the EU, abandon the euro, and restore ties with Moscow.In France, the populist-right National Rally is ahead in the polls and its candidate Marine Le Pen is the frontrunner in the race to succeed Emmanuel Macron as president next year.While Britain is not part of the EU, Reform UK is neck and neck with the ruling Labour Party in most polls.All of those parties make Tory Leader Pierre Poilievre’s brand of populist conservatism look as benign and old-fashioned as the Loyal Order of Moose.In Carney’s video, the prime minister said a fair deal wasn’t on the table at the end of August. There’s no doubt that the 11th-hour proposal to undermine the production of heavy trucks in Canada was a deal breaker.Who knows what terms might now be acceptable to the Don of Dons. He seems to be thoroughly enjoying the opportunity to attack his closest trading partner, behaving online like a bull mastiff in a poodle parlour.But unless the president plans to interfere in the midterm elections — something that cannot be completely ruled out — he may be looking for a constructive way out of the trade war.Despite the memes and the maps, Carney clearly believes there is an off-ramp.As he noted in his forward guidance video, “a mutually beneficial trade agreement between Canada and the U.S. is possible” if it respects Canadian sovereignty.One proposal that was raised at the House of Commons trade committee in June was that, instead of punitive sectoral tariffs, Canada could accept that the era of free trade is over and offer to pay a tariff of around three per cent on everything crossing into the U.S.At the committee, Conservative trade critic Adam Chambers asked executives from Business Development Canada and Export Development Canada about the nature of the trade relationship with the U.S.Todd Winterhalt, senior vice-president of international markets at EDC, said that while diversification is happening, “the U.S. remains, and in our view will always be, Canada’s most important market, with nearly three-quarters of exporters being highly or moderately dependent on it.”Chambers said the effective average tariff rate on Canadian goods was around three per cent (before the latest tariff increases), even though 85 per cent of goods passed into the U.S. tariff free under the Canada-United States-Mexico agreement.“Why is no economist considering a scenario where you would just pay an average effective tax rate across the board on every good going into the U.S?” Chambers asked. “Am I wrong in thinking it may be an option? Would it not make sense to spread the pain across the entire economy?”The trade executives had no answer, but it seems a reasonable question to ask.A three per cent tariff on the US$382 billion in goods exported into the U.S. in 2025 would yield the Trump administration US$11.5 billion. That’s more than the US$10 billion it will receive from the 50 per cent tariff on US$20 billion of goods under the latest round of tariffs. And, in relative terms, would be politically pain-free.Could it work? Who knows. But the only thing that is likely to appeal to this president more than the prospect of crushing his enemies is cold, hard cash.National Post Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.