Decoding the U.S.–Canada “Trade War” with Faculty Expert Jason Russell
The United States and Canada share the world’s longest undefended border, deep family ties on either side of it, and a passion for the Buffalo Bills—yet recently, the nations have been leveling tariffs at each other in a way that experts deem unusual. Trade negotiations affecting the auto and agricultural industries, among others, failed last month following last-minute adjustments on Canada’s side and internal tensions within the U.S. administration. Talks were called off near the end of the month, and the U.S. imposed 50% tariffs on approximately $20 billion worth of Canadian goods, which Canada reciprocated.
Though the countries have an extensive trade history with ups and downs, “this time, Canada is ending up on a front page in the New York Times. This is the subject of editorials and attention from CNN,” notes Empire State University Professor Jason Russell, who was raised in Ontario, Canada, not far from Buffalo, New York, and has recently appeared in the media to discuss the trade war.
Russell, who earned his master’s degree from SUNY Empire in 1999, joined the university as an adjunct professor in 2005, and transitioned to full-time professor in 2010. Since, he has taught classes in the Master of Arts in Work and Labor Policy. Russell is a labor historian with a Ph.D. from York University and a former volunteer labor activist, with expertise in labor history and Canadian history.
According to Russell, trade tensions between Canada and the U.S. predate the North American Free Trade Agreement (NAFTA) and the 1988 Canada-U.S. Free Trade Agreement. He points to 19th-century reciprocity debates and Canadian national policy tariffs as earlier examples in a long history of trade conflicts between the countries. “It’s particularly acute right now, but it’s part of a larger, wider historical pattern,” comments Russell.
Russell cautions against job losses on both sides of the conflict, such as in the agricultural sector, where products are being heavily tariffed. Canada’s system to safeguard against over-supplying goods like dairy and eggs—which helps regulate prices—relies on quotas that dictate how much each farmer can produce and sell. The Canadian supply management system strains U.S. agricultural exporters—particularly dairy farmers— by putting a cap on how much dairy can be shipped into Canada. However, one good that has strategically been left out of restrictions is potash—a fertilizer essential to U.S. agriculture that is supplied by Canada. “The [current U.S.] administration didn’t put any tariffs on potash, knowing its importance,” says Russell.
The recent media attention the U.S. and Canada trade dispute has garnered serves as an opportunity to clarify a misconception about tariffing: “When something is tariffed, that means the purchaser of the good has to pay it as it enters a country,” explains Russell. He uses the example of aluminum—a Canadian export that has become expensive for businesses and consumers in the U.S. “You buy a can of soda, and the can is made with imported aluminum. If aluminum has got a 50% tariff, that means the price of the can goes up by 50%, and that gets passed on to the consumer. It’s almost like a sales tax. I think people are getting that now because they can see increased prices happening,” Russell explains.
Where does this leave labor unions and the workers they advocate for? Russell breaks down the mixed response to this crisis: cross-border unions are weary of picking sides because they “don’t want their members in either country hurt,” while auto unions are taking a more nationalistic stance aligned with their historical resistance to jobs moving across the border.
Though the outcome of this trade dispute is unpredictable, Russell pinpoints one definite consequence for the U.S. The nation is currently in violation of the USMCA—the retitled NAFTA treaty—though Canada has yet to seek “formal relief under the USMCA dispute resolution process, and instead responded with counter tariffs, incidentally on the same items that the U.S. tariffed,” explains the expert. Russell adds: “This will make other partner nations, or potential partner nations, wonder if future U.S. administrations are going to adhere to treaties.”