US President Donald Trump on Friday ended all trade negotiations with Canada, citing “unfair conduct” by Ottawa over an allegedly “false” television ad promoting conservative former President Ronald Reagan’s anti-tariff comments.
The flashpoint came after the Canadian province of Ontario, led by Premier Doug Ford, launched a television advertising campaign in the US to raise awareness of the harmful effects of trade restrictions.
“Using every tool at our disposal, we will never stop defending US tariffs on Canada. The path to prosperity is through cooperation,” Ford wrote, announcing an ad campaign that will enrage Trump.
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While the US president was furious over the ad, the Ronald Reagan Presidential Foundation and Institute backed Trump, saying it misrepresented the former Republican president’s words.
A statement shared by the Ronald Reagan Presidential Foundation and Institute on the Ontario ad campaign.
Was Ronald Reagan’s ad “fake”?
As it turned out, the ad was not fake, but edited.
On April 25, 1987, Reagan indeed railways against tariffs: commenting on his decision to impose tariffs on Japan over Tokyo’s failure to comply with the semiconductor trade agreement, Reagan said, “Imposing such tariffs or trade barriers or restrictions of any kind are actions that I do not like to take.”
“In the long run, such trade barriers hurt every American worker and consumer,” Reagan explained.
“In imposing these tariffs, we were just trying to deal with a specific problem, not start a trade war,” Reagan said gravely, adding, “So next week I’m going to give Prime Minister (Yasuhiro) Nakasone the same message.”
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“We want to continue to work together on trade issues and are very keen to lift these trade restrictions as soon as the evidence allows,” the “message” read.
“We want to do this because we feel that both Japan and the United States have an obligation to promote the prosperity and economic development that only free trade can bring,” Reagan said.
In the same speech, Reagan also says, “I took the message of free trade to Canadian leaders a few weeks ago and it was warmly received there.”
“Indeed, throughout the world we are increasingly realizing that the weight of prosperity for all nations is the rejection of protectionist legislation and the promotion of fair and free competition,” was Reagan’s unequivocal statement.
The advertising campaign led by Ontario drew heavily on the above comments and emphasized the conventional economic wisdom in relation to the imposition of tariffs.
By the time Reagan became president, advanced economies had abandoned tariffs as an economic tool, finding that trade restrictions increased the dependence of domestic firms on government intervention, stifled competition, and triggered trade wars leading to more tariffs. Result? Job loss and reduced consumption for all parties involved. As they say in economics, no one wins a trade war.
The advertising campaign was suspended to allow talks between the US and Canada to resume
Despite the veracity of the ad in light of Reagan’s comments, the campaign has since been suspended to allow trade negotiations between the two North American neighbors to resume.
“Our intention has always been to start a conversation about the kind of economy the American people want to build and the impact of tariffs on workers and businesses,” Ford said Friday, announcing a campaign break after speaking with Prime Minister Mark Carney.
Although the ad campaign has been suspended, there has been no official response from the US to resume trade talks with Canada.
Trade tensions between Washington and Ottawa have risen since Trump took office for a second term in January, with the US president routinely threatening Canada’s economy with tariffs and often infringing on its sovereignty by suggesting the nation could become the US’s “51st state”.
