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e2goldCanada · money & markets
Trade and tariffs

Democratic Congress unlikely to curb Trump's trade war against Canada, experts say

Analysts say the president's tariff powers are on firm legal ground and a divided Congress has limited ability to change his policies.

By the e2gold.ca newsroom ·
Bracing for impact: 5 things to watch with Trump's upcoming tariffs | Radio- Canada.ca
Image: Radio-Canada

Despite the Democratic Party winning control of the U.S. Congress, experts say President Donald Trump's trade war against Canada is likely to continue and could even intensify.

"It's premature, and even naïve, to think that the Republicans' loss of control of the House of Representatives (and the Senate) will change U.S. President Donald Trump's anti-Canadian policies or lessen his aggressive trade war against this country," said Lawrence Herman, counsel at Herman & Associates and a senior fellow at the C.D. Howe Institute in Toronto.

He argued this week's political shift will mean Trump will "double down" and rely more aggressively on his presidential powers over trade.

James Lindsay of the Council on Foreign Relations said the party controlling Congress has leverage where a president needs legislative consent, but Trump has not needed it for his global tariffs so far.

Trump's tariffs issued under the 1962 Trade Expansion Act and the 1974 Trade Act are on sound legal footing, experts said. Without the Democrats having the necessary 60-seat Senate majority, these laws are not going to be amended.

"The result is that the current tariff wars against Canada are going to continue," Herman said. "They could even get worse."

He noted Trump and his team have "relentlessly targeted Canada" with insults and derogatory comments unprecedented among Western democracies.

Given this level of belligerence, Herman said it is impossible to see Canada reaching any mutually acceptable, balanced trade deal with this administration.

e2gold.ca reported earlier this month that Prime Minister Mark Carney said U.S. negotiators had dropped some demands as trade talks resumed.

However, Herman said even if some form of talks are back on, the United States, Mexico, Canada Agreement faces a wobbly future. "Tariffs and trade restrictions will be part of the Canada-U.S. landscape for the foreseeable future," he said.

Congress has fewer ways to influence the tariffs, as the administration has held on to them by moving from one law to another. Taking these powers back would need a law, which Trump could veto.

The newest tariff power came from Congress itself with the Graham Act, which allows tariffs of up to 100 percent on the five largest buyers of Russian oil and gas. Trump waived almost all of its measures in October, citing the national interest.

James Green, a research fellow at the Center for European Reform, said a Democratic-controlled Congress can only play a marginal role in shifting Trump's approach.

"The Trump administration's foreign policy is like a car going down the highway," Green said. "Congress has the ability to slow that car down, maybe make it put on a turn signal, but it's going to be very difficult for Congress to change the overall route over the next two years."

Nevada Joan Lee, a policy fellow with the European Council on Foreign Relations, said since the Vietnam War, Congress has handed over a large number of its foreign policy powers to the executive.

She said the Graham Act also grants the White House additional tariff power, including against countries that continue to import Russian oil. "This pretty much opens up any EU country to attack from the president on these tariffs," she said. "It took a lot of power out of Congress's hands."

MEP Bernd Lange said a Democratic victory "could lead to more confrontational decisions, especially on trade and tariffs" from Trump. "A lame duck could become an angry duck," he added.

Herman said Canada must prioritize eliminating the use of a self-defined "national security" exemption that the U.S. uses to circumvent trade obligations. He also said Canada should remove constraints on concluding other trade arrangements, including with countries such as China.

However, he said it is hard to see matters improving to the point of serious free trade engagement with the U.S., given the Democrats' own penchant for protectionism.

"While the tone may be better and less antagonistic, don't expect a return to anything akin to the long-gone NAFTA days," Herman said.

He concluded that Canada must move "full speed ahead" to cement arrangements with more steadfast and reliable trading partners.

This story was written by the e2gold.ca newsroom from reporting by The Globe and Mail, The Parliament Magazine and Hindustan Times. Quotes are checked word for word against that reporting.