This week the United States imposed 50 percent tariffs on roughly $20 billion of Canadian goods after trade talks collapsed. Canada's prime minister, Mark Carney, called the move "a miscalculation" built on "uneconomic" and "unfair" demands, said flatly that "you're at war when you get attacked," and promised to match the tariffs dollar for dollar starting in early September. So here we are: in an escalating trade war with the country that is, by almost any measure, our closest friend, our largest trading partner, and one of our most reliable allies.
We'll say up front what we think the evidence shows: these tariffs will not help the American economy in any meaningful way. They will raise prices on American families, invite retaliation that hurts American exporters, and manufacture hostility with a neighbor who should be a partner. And the irony is that the history of protectionism suggests they may not even help the industries they claim to protect.
Tariffs Rarely Do What They Promise
The pitch for a tariff is always the same: protect American industry, save American jobs, punish the foreigner. It is emotionally satisfying and politically easy. The trouble is that it rarely works the way it is sold. A tariff is a tax, and the people who mostly pay it are not foreign governments but American consumers and American manufacturers who now face higher input costs. The intended consequence — a stronger domestic industry — often fails to materialize, while the unintended consequences pile up: higher prices, retaliation, and supply chains that scramble to route around the whole mess.
The Cautionary Tale in Your Pantry
For a near-perfect illustration, look no further than the humble tin can, as Bloomberg recently detailed. Steel and tinplate tariffs have been sold for years as a way to protect American steelmaking. What actually happened is a case study in unintended consequences.
Despite the protection — indeed, right through it — domestic tinplate capacity has collapsed. Nine U.S. tinplate production lines have shut down since 2018, a decline of roughly 75 percent, and domestic output has fallen by about two-thirds. American tin-mill prices are now the highest in the world, well above what European manufacturers pay. Meanwhile the current 50 percent tariff on imported tinplate can amount to as much as 12 percent of a can maker's total costs — costs that get passed straight to shoppers. Canned fruit and vegetable prices have been rising around 5 percent a year, roughly double food inflation generally, and the tin can is about a third of the wholesale cost of what's inside it.
Sit with that. A policy meant to protect the domestic steel industry presided over a 75 percent collapse in domestic tinplate capacity, gave America the highest tin prices on earth, and quietly taxed every family that buys canned soup and vegetables — a burden that lands hardest on the people with the least. That is the tariff pattern in miniature: the promised benefit evaporates, and the hidden costs multiply.
A Word for the Conservative Base: Reagan Was Here First
There is a particular irony in a Republican administration reaching so eagerly for tariffs, because the modern conservative movement's own patron saint warned against exactly this. Ronald Reagan was, in his rhetoric and his convictions, a committed free trader. In a 1988 radio address he reminded the country that when Congress passed the Smoot-Hawley tariff in 1930, it was sold as protection for American jobs — and it helped deliver the Great Depression instead. He derided protectionism as "a cheap form of nationalism, a fig leaf," and cautioned Americans to beware the demagogues eager to start a trade war with our friends while cynically waving the flag.
We'll be fair: Reagan was not an absolute purist. He used targeted measures on occasion, from Japanese motorcycles to autos. But his stated philosophy, and his explicit warnings, could not be clearer, and they were aimed squarely at the kind of broad, friend-alienating protectionism we are watching now. Whatever else the current tariff-first approach is, it is a repudiation of Reagan's trade legacy, not a continuation of it.
Of All Countries, Not Canada
And of all the trading partners to pick a fight with, Canada may be close to the worst possible choice. Canada is our largest or near-largest trading partner, a NATO ally, an intelligence partner in the Five Eyes, and the other half of one of the most deeply integrated auto, energy, and agricultural supply chains on the planet. These new tariffs reportedly violate the USMCA — the North American trade agreement this very administration negotiated and celebrated.
We have argued for months that alliances are strategic assets, not obligations to be shed on a whim. That is as true in economics as it is in the Strait of Hormuz. Manufacturing hostility with a loyal neighbor to score a domestic political point does not make America stronger. It raises costs at home, pushes Canada to deepen ties with other partners, and spends down the goodwill of a friend we will need again and again.
The Common Sense Position
We are not trade absolutists either. There is a legitimate place for targeted, strategic trade action — against a genuine bad actor like China dumping subsidized steel, for instance, ideally coordinated with allies rather than aimed at them. But broad tariffs on a friendly neighbor, that raise prices on American families, invite dollar-for-dollar retaliation, and break our own agreements, are not a strategy. They are self-harm with a flag planted on top.
The test of any trade policy is simple: does it leave Americans better off? On tariffs against Canada, honestly weighed, the answer is no. Reagan warned us about the demagogue who declares a trade war on his friends while waving the flag. Forty years later, here we are — and, as always, the bill lands first on American families at the grocery store. Common sense says you make allies of your neighbors, not enemies.