Economist Warns Trump's Trade Strategy Is Driving Canada Into China's Arms
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Getting Trade Backward
Here's an uncomfortable truth about international commerce: treating your trading partners like rivals tends to push them toward actual rivals. Economist Justin Wolfers laid out this problem during an appearance on MSNBC's "Alex Witt Reports" on Sunday, pointing to Canada's recent trade deal with China as evidence that President Donald Trump's confrontational trade strategy is producing exactly the opposite of what America needs.
Wolfers pushed back hard against Trump's framing of trade relations. "Trade is not fundamentally about competition," he said, emphasizing that it's really about "cooperation" instead. "It's not us versus Canada. It's us and Canada," he explained.
The logic here is straightforward: if the U.S. fails to "reliably cooperate with Canada," then it shouldn't be surprised when its northern neighbor turns to "new friends" to cooperate with. The outcome? "Americans miss out" on products and services, while the United States ends up with "less friends" in the world, which Wolfers called a "very bad place to be."
The Tariff Strategy That Isn't Working
Meanwhile, Trump's primary weapon against China—tariffs—continues to underwhelm. Despite escalating trade tensions throughout the past year, China's export machine keeps humming along.
China's General Administration of Customs reported that the country's exports rose 6.1% year-over-year to 26.99 trillion yuan, or $3.87 trillion. Imports barely budged, up just 0.5% to 18.48 trillion yuan, or $2.65 trillion.
Economists like Gita Gopinath of the International Monetary Fund point to rising demand from European and East Asian markets as the driver, though she noted it was "hard to see this last." Translation: China is simply finding new customers while America alienates old friends.
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