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Ottawa Needs to Prepare for a Long Trade War With the United States

Posted August 21, 2018

Under Economic Issues, International Trade Issues

(Danielle Goldfarb via Globe & Mail)

The trade war is creating massive uncertainty for investors, businesses and policy makers in Canada, the United States and the rest of the world. The key question now is whether it will be long-lasting. Is there support for continued U.S. tariffs on Canadian and other countries’ imports? As Americans head into critical midterm elections in November, will they support a continued policy of tariffs on key trade partners?

Since late June, RIWI Corp. has been tracking U.S. support for continued tariffs. In a new study, RIWI data show there is a cognitive dissonance among Americans on trade. Half or more of the U.S. public does not hold strong convictions on trade. Whether asked about NAFTA, tariffs or trade, a consistent 45 per cent to 60 per cent of the almost 10,000 randomly engaged Americans to date do not know enough to say whether these are positive or negative for the U.S. economy. This ambiguity is broad-based across U.S. regions and unchanging despite tariff retaliation by Canada and others.

Since the majority of Americans do not oppose the tariff agenda, this provides fertile ground for a long-lasting trade war with few domestic political risks. Canada needs both to adjust to the very real possibility of a long-term trade war, while at the same time recognizing that there is a chance to shift ambiguous public opinion. Click here to read more.