Driving the news: Writing for The Daily Signal, senior contributor Victor Davis Hanson breaks the U.S.-Canada trade dispute into three stages — and says Canada is now trapped in the worst one.
Stage One was outrage. According to Hanson, Mark Carney framed the conflict as American bullying — accusing Washington of threatening Canadian sovereignty and suppressing French-language and Indigenous culture.
Stage Two brought clarification. Canadians, Hanson writes, rallied behind Carney: 90% support, informal boycotts of U.S. goods, and crowds booing the American 'Star-Spangled Banner' when it was played at sporting events in Canada. Ottawa threatened to cut off 4 million barrels of daily oil exports.
Stage Three is reckoning. The U.S. economy is 13 times larger than Canada's. The U.S. population is nine times greater. And the August jobs report told the story: Canada shed 41,000 jobs in just 10 days of escalation; the U.S. added 160,000.
Hanson also dismantles the sovereignty argument. Washington's core demand, he writes, was simple: why should American digital media companies pay a 5% surtax in Canada — on top of income tax — to subsidize Canadian government agendas? The U.S. imposes no equivalent levy on Canadian firms.
On Chinese steel and aluminum, Hanson argues Canada was being used as a backdoor to circumvent U.S. tariffs — a scheme the Trump team identified and rejected.
The bottom line: Canada walked away from what Hanson calls a deal better than almost any other the U.S. offered — and now sits alongside China as the only two economies that chose retaliation over negotiation. Free-market readers should note the lesson: economic nationalism built on subsidies and surtaxes is a fragile foundation when your largest trading partner holds most of the cards.