Tariffs For The Rescinding

On Carney’s Concession

It’s worth remembering that tariffs are bad.

The point of Canada’s tariff response was to get Donald Trump to back down on his tariff threats to Canada. It was not to enact a new and lasting tariff regime in Canada. The point was for the tariffs to be short term pain to force a longer term better outcome than never responding at all and allowing asymmetrical tariffs. But it’s worth repeating that tariffs are bad for Canadians.

As fun as it is to joke about Elbows Down, the question this government, and frankly whatever government would have faced, is at what point have we gotten what we wanted out of the tariffs? Or, perhaps more accurately, at what point does keeping the tariffs in place serve more of a political disservice than an economic incentive to get a deal? Carney clearly judged that what you might call the new status quo - sectoral tariffs but 85% of our trade goes through tariff free - is the best he’s going to do, and our remaining tariffs on CUSMA goods are serving as bigger blockages to a deal than incentive to get a better one.

Is that a correct judgement? We can’t know - we’re not in these rooms, we’re not having these talks, and we would truly be guessing, but it seems plausible enough that it’s not obviously a mistake. It’s also a move that makes a lot of sense in the context of the US’ economy, which is growing shakier and shakier seemingly by the day. If tariffs are no longer buying us the leverage we want them to, buying us time by trading them for the new status quo would be a good outcome.

Letting the weakening US economy do the work of getting the remaining sectoral tariffs off the books, or getting Canadian carve outs to those sectoral tariffs, is a plausible path. However, it requires the continuation of the current status quo to get us to a place where when the Americans have less leverage, we’re not using that weakness to get CUSMA, because we gave Trump a small victory in exchange for mostly sparing our economy.

If in January you had told any Canadian that in August 2025, the rest of the world would face on average 16% across the board tariffs and we’d be essentially only facing damage in aluminum and autos, we’d have been curious what on earth we had to give up. Some defence spending we needed to do anyways (and really, the 3.5% is an aspirational promise that will not so quietly die on the vine in time), eliminating a tax that was not ever actually implemented and nobody was actually that sure was any good, and eliminating some tariffs that we only put in during the trade troubles is really not much at all.

The honest truth that’s worth reiterating is we are a small country dealing with a hegemon. There’s very little chance of “winning” such a fight if the American administration in Washington decides they view us as the enemy. Keeping the status quo or as close to it is our goal in all of these negotiations, and making up concessions to seem like we’re flexible while sticking to our core dividing lines is a success. Putting whether supply management should be a red line or not aside, we’ve managed to protect the red line for essentially free. If we decide supply management shouldn’t be one in the future, that’s for Canadians to decide for domestic reasons, not staring down the barrel of a US President.

The real problem with the Elbows Down folks is simple - they don’t trust Canadians to understand. They think they can blame Carney for failing to deliver a miracle against a guy who very clearly is not reasonable. They think Canadians are so stupid that they will buy nonsense from hacks so long as it’s anti-Carney, not understanding that even Canadian Conservatives mostly view Trump as a bad thing and understand that he’s a deeply unreliable, and let’s be real odious, person. Of course Carney will not be able to make wine out of water - there’s nobody who can get Donald Trump to randomly become a different person, and if you’re mad that Mark Carney can’t you’re being obviously unreasonable.

I think a lot about the concept of “knowable error” in prediction - I make a lot of predictions about politics and I love sports, and so I’m often thinking about what that entails. When I’m wrong about something, was it knowable? Obviously there’s a different in being wrong about a football game because you were wrong versus because the star QB gets hurt. Losing because Mahomes gets a concussion 4 minutes in is a different, and less concerning, way of being wrong. To the extent that there’s something similar in politics, the reason the Conservatives’ tariff response aggregates me is because they’re acting in a similar bad faith to someone getting mad at sports pundits for a bad pick ruined by events.

Canadians aren’t stupid people, and they will respond to serious moments with the seriousness they deserve. They will not blame Carney for failing to deal with Trump, they’ll look at Conservatives like they’re idiots for not keeping their eyes on the prize. This is a moment for the Conservatives to show they can step up and show they’re ready for government. But they can’t.

The honest truth is that Carney has mostly traded unimportant things, or things he wanted to do anyways, to keep the Canadian economy afloat. He’s done about as well as anybody could reasonably expect in terrible conditions. If you want to dismiss this as the words of a Liberal sycophant who only praises this government, look at this site’s recent archive and tell me that with a straight face. Carney’s done a good job, there’s still more to be done, but buying us time will be good in the long run, and the damage has been significantly ameliorated compared to what it might have been. That’s a win, and while today’s announcement might make the dumbest people on Twitter chortle with their “funny” jokes, Canada’s doing the best they can in tough situations and mostly keeping our heads above water.